How can travel agents create more value for their customers? At the
Institute of Certified Travel Agents (ICTA) forum held in Colorado
Springs, Colo., right after United announced the latest commission
cap, speakers addressed this question as one key strategy to help
cushion the blow of lost income.
As consultant
Mark Goldstein put it in his presentation at the forum, "The
airlines will not get away with [capping commission] if you have
the consumer in your hip pockets. And guess what: The consumer
doesn't like the airlines, anyway."
Goldstein also told agents that every time they add what
consumers perceive as real value to a travel transaction, the agent
can charge for it.
That was the general message that came out of a seminar on
charging fees to raise profits while making clients happier, led by
Nancy Johnson, owner of Johnson Travel in Research Triangle Park,
N.C.
"Fees are inevitable now," Johnson began. Then she read a
statement from the book "Win the Value Revolution," by Robert B.
Tucker: "As complexity increases, customers will rely on people --
and crave the value they add to the transaction -- more than ever.
Value-added services that make the customer feel special, that meet
and anticipate the customer's needs, become increasingly
important."
Johnson was quick to note the difference between value and
price. "Many customers don't understand it, but if value were
totally dependent on price, everybody would drive a Hyundai."
As agents move from "getting paid a percentage of price of
product to getting paid for their expertise," they have to find new
models of how they charge, she said. "We looked at models of those
who were paid for expertise -- such as lawyers and accountants, who
charge by the hour. That may not be the right model, though."
At the session, one agent who's still debating what to charge
for Internet research said she was hesitant to "nickel-and-dime her
clients," especially when it takes her agents almost no time to get
the information. But Johnson had a different take. "The value that
the customer places on [a service] is more important to our pricing
strategy than how long it takes us to perform a service," she said.
Using value as a measure can be more lucrative as well, she
said.
Service survey
OK: You're looking to charge fees for services that clients
really value -- but how do you discover exactly what those services
are? There are several ways to survey clients on this issue,
according to Nancy Johnson, owner of Johnson Travel in Research
Triangle Park, N.C.
At her agency, she asked every staff member to spend a week
ending each client interaction with the question: What service that
we perform for you gives you the biggest value? Staffers were
requested to send the answers along to Johnson, who passed them on
to everyone in the office so they would all "feel wonderful about
all the value they provide. The immediate feedback directly from
customers' mouths to agents' ears gave them additional confidence
and said they were worthy of charging fees."
Top-ranked services included shopping for the best fares;
alerting clients to lower fares even after they've been ticketed;
answering the phone promptly with a live voice; providing ticket
delivery; using the latest software technology to wait-list clients
on flights shown to be sold out, and contacting clients if the
flight becomes available.
Another North Carolina agency asked clients to fill in an
extensive customer survey, ranking value-added services. To provide
incentive for answering the survey, the agency also used it as the
entry in a contest to win air tickets.
What to charge for
From managing frequent flyer miles to providing detailed driving
directions -- these are all value-added services that agents can
provide and charge for, according to a recent ICTA seminar.
Agency owner and "executive coach" for agency owners (a service
she'll be rolling out come the new year) Nancy Johnson led the
session. From the book "Win the Value Revolution," by Robert
Tucker, she provided the following "strategies for creating
customer-pleasing worth that will give buyers additional reasons to
do business with you and give your firm a recognizable degree of
difference":
Make the customer's life easier. For example, are you open
evenings and weekends?Provide greater responsiveness to the client. "If your agency
makes a mistake, you take responsibility for it right away," said
Johnson.Take on the customer's problem -- which can mean becoming the
customer's advocate in conflicts involving travel suppliers. For a
fee, you are the one to talk to the airline if your client's
frequent flyer miles don't show up on his monthly statement.
Johnson was able to waive the advance-purchase requirement and save
$1,500 for clients traveling with their son on four days' notice to
visit a doctor in New York. The client was delighted to pay a $150
service fee -- even after he was given a gift of tickets from a
friend, which meant canceling the flights scheduled by Johnson's
agency.Empower customers through knowledge -- for example, by holding
classes on how to research travel through the Internet.Involve customers in creating value. For example, guarantee
that you'll contact them every time a package comes in to a
destination they're interested in.Provide greater customization and choice. For example, put
information about credit for a voided ticket in a client profile so
that every time it's called up, the agent can tell the client
whether or not he can use the credit on the new trip.Don't forget these
Providing value
to customers was also a topic in Scott Ahlsmith's speech at the
ICTA forum. According to Ahlsmith, vice president of back-office
company Trams, customers "don't need somebody to make reservations.
Everyone can do that himself. They need someone to make sense of
all the piles of information out there. There were 350,000 sites on
Australia on the Internet last time I looked. Agents need to be
data curators and information managers."
According to Ahlsmith, customers also want:
Price assurance -- that they've got the best value, not
necessarily the lowest price.Quality control. Travel agents can take on the role of
intermediary, making sure that every product they sell is high
quality -- one reason to stick with preferred suppliers.Information on social customs -- answers to questions like, do
you need to wear a necktie when dining in restaurants in New York
City?Information on unique experiences, so they can provide clients
with directions to, for example, "this little out-of-the-way
restaurant that closes early."Customized and personalized data presented in attractively
packaged chunks. Ahlsmith suggested that agents "present their
knowledge the way jewelers present a ring in a store. They don't
just bring it out; they bring out a black velvet pad on which they
place the ring; there's a little bit of ceremony and ritual to
presentation." For example, try customizing information on a
specific destination from the Internet -- with a headline like "The
vacation of a lifetime for John and Mary Smith."Short takes
Following are some short takes and memorable quotes from the
Institute of Certified Travel Agents (ICTA) forum held in Colorado
Springs, Colo., during the second week of November:
"Some agents may dismiss or even decide not to sell a certain
supplier because they don't like the company's district sales
manager. Don't do this -- your business isn't a personality
contest.""Fam trips should be relevant to the particular products and
destinations you're selling in your agency. The fam trip you want
to take -- visiting a destination that you never sell -- is really
a vacation at a good price.""Your industry has so much beautiful content that no other
industry has. You should be presenting this content in a multimedia
context. When you present a destination to clients through a video
or a CD-ROM, you'll find that those clients are more involved and
more ready to buy than when they just look at a brochure."Important public relations tip: When you're talking to the
press, "never say anything you wouldn't want your fellow agents to
hear you say."Sending back the champagne
"Travel agents do
not get a bottle of champagne when they buy a new car, so how can
they afford to send one to each cruise passenger?" asked former
ASTA president Mike Spinelli.
For Spinelli, also head of the consortium Action 6, the
champagne trick doesn't add up: "An agent sells a cruise for
$2,000, earns $20 net after all the expenses," and with the cost of
the champagne, the profit is 0.
He said he found another item that agents can provide to their
cruising clients for less money: "a clothes steamer, which I expect
to be able to sell to my agents [in Action 6] for under $10
apiece."
Spinelli suggests telling clients, "Our normal policy is to send
a bottle of wine or champagne to your ship. You will drink this and
it is gone, or, worst-case scenario, you are a nondrinker,
anyway."
Instead, "I can give you a choice of taking this little steamer,
which will last many years and will be, hands down, a more
practical choice than a bottle of champagne."