Success With Service Fees, Part 2: Getting Started

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Now that you've decided to charge your customers service fees, you need a plan to help roll them out.

A representative sample of front-line agents, managers and owners, asked what they feel is important in making a fee program successful, agreed on a few principles. One is making sure everyone in the travel agency knows why the agency is charging fees. Another common tip was to put a positive spin on the new fee program when breaking the news to a client.

There also were some areas of disagreement among agents regarding how to make a fee program successful. Some agents said they believe fees should be waived for various reasons. Others think fees should not be waived. Some don't mention the inclusion of fees when quoting final prices, and some do.

Among the survey results were the following tips:

Notify your clients in writing. "We wrote everyone a letter, so they were aware we were going to do it," said Greg Yielding, secretary at Robert Henri Travel in San Francisco. "We're going to raise our fees soon, and we'll let our clients know ahead of time."

Make face-to-face appointments with important clients. "For corporate clients, a letter should personally be delivered followed with a personal meeting," said Lloyd West, vice president of Plan-It Cruise & Travel in Seattle. "Obviously you don't do it with everyone."

Don't apologize to clients about the fees. "You just have to be positive about it," said Karilyn van Soest, vice president of sales and marketing for Lake Union Travel in Seattle. "If you start apologizing for it, you're not sending a clear message. It's 'thank you for your business. We know you won't mind paying for this.' "

Tell your clients the truth. "I discuss it with each client, very matter-of-factly," said Steve Danishek, owner of TMA in Seattle. "They've already read about commission cuts, and I tell them that I'm forced to pass those additional costs to them. Failure to disclose a fee is the biggest pitfall."

Avoid the negative. "Do not use the word 'impose.' " said Sande Davidson, owner of Davidson Travel in Phoenix. "Instead, simply say, 'We now charge a ticket transmission fee.' "

Keep fees simple and flat. "It's so much easier to have one fee for every transaction, whether it's $90 or $9,000," said Randy Brown, executive vice president of Corniche Travel in Los Angeles. "A flat fee needs to be charged for everything."

Educate your colleagues. "We held a lot of office training," said Kathy Falkensammer, president of Prestige American Express Travel in Las Vegas. "The biggest obstacle was in getting our employees to charge fees, because they are all paid on commissions."

Give agents flexibility in charging fees. "The staff who do foreign independent travel arrangements are empowered to charge up to $50 an hour for services over and above the trip cost for research," said Randi Sarti, owner Travel Advisors of Marin, in Mill Valley, Calif.

Don't mention fees separately in price quotes. "We say, 'This is the price of your ticket, including all taxes and fees,' " said Sue Veteto, an agent with Giselle's Travel in Sacramento, Calif. "It's easier that way when you quote the prices. We don't make an issue of the fact that we're charging a fee."

Do mention fees separately in price quotes. "Be straightforward," said Sande Davidson. "We say the air fare is $142 plus a $10 ticket transmission fee."

Allow exceptions. "If they buy a Seabourn cruise, we don't mention fees," said Nancy Strong, owner of Strong Travel Services in Dallas.

Avoid exceptions. "If your fees are logical and well-communicated, you should not need to waive them for anyone," said Sande Davidson. "Even my mother pays me a ticket transmission fee."

Don't hesitate during fee presentation "If you don't hesitate, you'll find little or no resistance," Robert Joselyn, president Joselyn, Tepper & Associates.

Give clients a bonus coupon. "We give them a coupon to use on a cruise or tour booking, then they feel like they are getting something out of it," said Kris Ohlandt, office manger of Vintage Travel in Napa, Calif.

Start out low and slowly raise fees to desired level. "That way you can feel out customer resistance at the optimum level," said Robert Joselyn.

If you waive a fee, make a big deal about it. "Print up an invoice showing the fee and draw a line through it and write 'fee waived.' " said Robert Joselyn.

Add cancellation fees to those of your supplier. "Tell your clients if you cancel, $100 goes to the cruise line and $100 to the agency," said Robert Joselyn.

Give agents part of the fee. "The agents should get a portion of the fee for a period of time to incentivize them to charge the fees," said Lloyd West. "A bonus plan giving them 20% to 25% of the fee is a good idea for the first three months."

Put a limit on fees for families or those purchasing travel together. "We have a maximum charge for families, with a maximum of two people for each family," said Kris Erickson, president of Olympus Travel in Tacoma, Wash.

Keep an eye on what the competition charges. "We're in a very small town, and we don't want to get in a bidding war with other agencies," said Judy Coppage, owner of The Travel Bug in Boerne, Texas.

Be reasonable in setting prices. "They're not going to pay $20 a ticket, but we're not going to charge zero either," said Randi Sarti.

This report was adapted from TravelAge magazine.

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