I disagree so intently with the content of Richard Turen's June 27 column, headlined "I politely decline," that I felt compelled to offer my opinion, hoping to present a different perspective.
Mr. Turen says that suppliers' top-producer awards do not recognize agents who create business; they honor agents solely on their aggregate business (as if to say that agents who produce the most business don't really create business). He goes on to suggest that the owners of many top-producing travel agencies know little or nothing about the cruise business and only got to where they are by discounting or rebating a portion of their commission.
He then encourages "ethical" top-producing agencies (which, in his opinion, include only those that do not discount or rebate) to boycott supplier events if top-producing agencies that do rebate (he calls them "outlaws who choose to be parasites") are invited to attend.
For the record, Direct Line Cruises does not rebate or discount cruise fares. We do, however, offer value-added incentives, which effectively reduce our commission. Some cruise lines offer huge onboard credits as an incentive to sail with them. Is this rebating? Call it anything you want. I call it running a business competitively.
Mr. Turen says an agency that discounts is essentially telling the supplier they do not need their full commission. I say an agency that spends money advertising, providing booking incentives and taking financial risks to sell more product makes a strong case for higher commission and overrides.
When Macy's runs a one-day sale offering discounts and incentives, they are not doing this because they want to reduce their profit margin. No one wants to do that. They would much rather sell at full manufacturer's price. But they know that in a competitive business world, they must offer incentives.
Macy's sells more than the local boutique because the boutique chooses to hold out for full price and doesn't offer incentives. The boutique is probably not spending the money Macy's spends to advertise, nor do they have the same overhead, nor do they want to sacrifice their bottom line by discounting. This is how they choose to run their business. There are pros and cons to either choice.
Suppose the Ralph Lauren Co. sponsored an event for its vendors, and the local boutiques boycotted because Macy's was attending. Do you think Ralph Lauren would cave in and say, "Well, yes, we will stop taking Macy's business and no longer invite them to our functions, because the boutiques" --who are probably not advertising or selling as much -- "are upset"?
The boutiques make more on each individual sale than Macy's does because they are not willing to promote incentives like Macy's, and yet they complain that this is unfair competition. People buy from Macy's because it is a legitimate, reputable and professional business with competitive prices, not because it is enticing clients away from the boutique (as Mr. Turen puts it). It gives the customer what he/she wants and is making its supplier happy because it is moving the product. The product is not sitting on some display counter for months at a time.
If the owner of the boutique complained that Macy's moves more product than they do, should Ralph Lauren then tell Macy's that, in order to be fair, it needs to run its business just like the boutiques?
Should Macy's complain to Ralph Lauren if Marshall's or T.J. Maxx sells the product for less?
When I started this business 16 years ago in the basement of my home, some agencies complained to the supplier's reps that it was unfair that the "800-number agencies" were getting all the business. I never figured out why it was unfair to choose to pay for every incoming long-distance call in order to make the phone ring and grow my business.
I can only hope that the cruise lines never cave in and take these complaints seriously, but instead continue to recognize any agency that produces for them within their permissible guidelines. They should not play mommy to agencies that want to make this business stagnant. I did not bellyache or complain about the "big guys" in this industry when I was just a "speck." Instead, I was inspired to become more than a speck.
The "professional rebaters" (with whom Mr. Turen sat at a supplier event) are also my competition. But if these people are filling the ships, there's a part of me that is happy about that, and they, too, have a business.
I agree that we need legitimate agencies that employ competent and knowledgeable professionals. But if the "rebaters" are out there selling like merchants at the Grand Bazaar, so be it. I'll even go so far as to say that if the only agencies that were putting passengers on cruise ships were the "professional rebaters," and I was a supplier who had to make a choice as to whether I should reduce the rebaters' commission to satisfy the complainers or fill the ships, I know what I would be doing. I know what the stockholders would be telling me to do: "Fill the ships!"
As a legitimate travel agency owner who worked hard and made a lot of sacrifices over the past 16 years, I personally don't care who is in the room with me at a supplier event. I will always focus on what I need to do, not on what anyone else is doing.
So, instead of focusing on boycotting, focus on making your agency valuable to the cruise lines. We are their army of "outside agents." Even if the cruise lines do more direct business in the future, do you think they would want to cut loose any agency that is producing for them? No, they will keep an inside sales force and an outside sales force, because their goal is to fill the ships, as it should be.
I really do believe that a supplier owes it to its productive sales force (that's us) to reward, recognize and compensate commensurately for filling the ships (regardless of whether you rebate or not). It's a business, for crying out loud!
When I first got into this business, my husband and I were given an inside cabin on an inaugural event. Across the hall were the top producers in a lavish suite. As the proud occupants unpacked, they observed me gawking in the doorway and were nice enough to invite us in to see their beautifully decorated prize with a view to die for. Was it unfair that I had an inside cabin and they had a suite? Absolutely not, because they earned it and I didn't.
Over the years, Direct Line Cruises has been privileged to win several cruise line honors. Most recently, we were the proud recipients of Royal Caribbean's 2010 Partner of the Year award for the Northeast region. Now, when my husband and I get invited to inaugural events, we get either a balcony cabin or a suite, because we've earned it. It's our pat on the back, which is never expected, but always appreciated.
Mr. Turen argues that all too often top-producing agencies "sell out" to the cruise lines in exchange for commission overrides and special treatment. I had to read this several times, and still it makes no sense to me. If I am getting special treatment at these events ("like royalty," in Mr. Turen's words) because I am sending more business to the supplier than I did 16 years ago, that is exactly what should be happening. What business doesn't work that way?
I love attending cruise line events. It's exciting to hear about future hardware and deployments and also hearing what the upper-management executives have to say. I welcome an opportunity to give feedback and offer an opinion. I think they value that. In addition to extending their appreciation for our business, I think the message they want to send when they generously host these events is that they need us as much as we need them.
Why would anyone want to boycott that?
Helen Coiro is the co-founder and owner of Direct Line Cruises in Hauppauge, N.Y.