Lead generation, once limited to static media like the Yellow Pages and Sunday travel sections, is transforming retail travel, with agencies using old partnerships and platforms in new ways.
Savvy agencies are fishing in a much broader sea, the Internet, using special offers from preferred suppliers as hooks to attract consumers and using co-op marketing dollars from those same preferreds to fund these campaigns.
It’s a self-perpetuating cycle. Retailers sell more of their preferreds, which in turn reward retailers with higher commissions, special amenities or offers and more co-op dollars.
It’s such an effective model that it was the driving force behind a new company formed by a high-touch brick-and-mortar and a high-end online retailer whose lead-generation campaigns brought in so many new customers that it couldn’t keep up with the demand.
The top executives of the two companies, TravelWizard.com and Azumano Travel Services, will tell you that each outfit’s skill set complements the other’s.
TravelWizard.com was “smothered” with more leads than its agents could handle, said company founder Robert McMillen.
“We’re high-tech and high-touch,” he said. “We use the Internet to get customers, like a big fishing net. We bring them in and deliver them to the agents in our back office. From then on, it’s person-to-person, white-glove service.”
Azumano President Sho Dozono, in turn, said his agents are experts at converting leads into sales. It’s a good combination of skills, he said, because while travelers are searching the Internet for information, in the end, they often want to book with a knowledgeable travel agent.
TravelWizard.com illustrates the effectiveness of lead generation today and the reason agency groups and some agencies are investing millions of dollars — their own money as well as co-op marketing dollars from preferred suppliers — in constantly evolving campaigns, employing banner ads, search engine optimization, paid search, social media marketing and other platforms.
Yet, with all the new investment and all the new technology, the goal remains the same as ever: Entice a consumer to call a toll-free number, click on a website offer or send an email to initiate a discussion with a qualified travel agent about turning the consumer’s vacation dreams into reality.
Hosts, consortia, franchisers and agencies are putting scores of employees to work on these efforts or subcontracting the work to digital marketing agencies.
There is no single recipe.
“We’re always experimenting,” said Scott Koepf, vice president of sales for Avoya Travel, which has made its Live Leads program one of the core precepts of its business strategy.
Companies that long eschewed lead generation have recently begun embracing it. For example, in January 2011, Travel Leaders dove into the lead generation business, formally unveiling its Score program, which connects agencies with qualified leads from travelers already interested in a specific destination. Agents are vetted so that they only get leads from consumers who want to buy the type of travel the agent is qualified to sell.
Among the reasons Travel Leaders got into the lead-generation business, said Jose Ferreira, vice president of marketing and travel technology for Travel Leaders Associates, is that its agents were asking for it. And the reason agents were asking for it, he said, is that the way consumers shop for travel has changed.
“Dreaming and planning start online,” said Eric Maryanov, president of All-Travel, a 28-year-old brick-and-mortar agency that uses online lead generation to attract the bulk of its new customers.
Luis Zuniga, vice president of marketing and communications for Cruise One and Cruises Inc., said that lead generation used to be about putting ads in Sunday travel sections and Yellow Pages. No more.
“There is just no traffic there,” he said.
Online is where the action is today.
Ferreira said, “We have to go where consumers are, and they have clearly indicated to us that their vacation planning starts online with initial research.”
That means banner ads, contextual advertising, and travel deal lists such as Shermans, Dunhill and Travelzoo.
At the same time, retailers are seeing a demand for their expertise and service.
“The OTAs’ business has plateaued,” Ferreira said. “Consumers are saying they want a more personalized, service-based approach to curate vacation experiences.”
Meanwhile, pressure is on agents to work more efficiently than ever before. Despite the fact that franchises, consortia, co-ops and host agencies have provided their members with sophisticated and effective marketing programs, implementation takes time.
“The time suck is huge,” said Avoya’s Koepf. And for many agents, marketing is not their core proficiency; selling travel is. And by opting to use a lead-generation program, they’re essentially subcontracting out that process to their host or consortium and freeing themselves to do what they do best.
That’s the core precept of Avoya’s Live Leads program. The company has invested millions of dollars of both its own and co-op marketing funds and has committed 100 staffers to the task of generating leads and funneling those leads to its independent affiliates, who then close the sale.
Some Avoya agents rely completely on Live Leads for all of their business, Koepf said. Others are relatively new to the game.
The Score program is designed to be an extension of Travel Leaders associates’ own marketing efforts, Ferreira said. But driving ancillary business to its agencies is part of Travel Leaders’ long-term strategy.
Lead generation can involve some long-established industry practices. All-Travel, for example, uses preferred-supplier special offers that it gets from its membership in the Signature Travel Group in some of its lead-generation efforts. And it focuses on selling a small band of preferred suppliers. Among the many benefits of that approach is that the bulk of what it spends on lead generation is funded by co-op marketing dollars.
Many consortia and hosts charge agencies for leads that become sales. Most charge a small fee or a percentage of the commission earned. Avoya keeps 70% of the commission on sales generated by Live Leads; it keeps just 20% of the commission on sales resulting from an agent’s own marketing.
Specialization is key
Once an agent gets a lead, he or she has to be able to close it, which means that matching the right lead to the right agent is crucial. In fact, specialization was a key reason Cruise Planners/American Express beefed up its lead-generation program last year. It dedicated a staff of 10 and spent $2 million in the last two years building its marketing tools for generating leads.
Not every agency group has a lead-generation program. Travel Leaders associates have the Score program, but other agency groups under the Travel Leaders Group umbrella do not. For example, the Vacation.com consortium and the host agency Nexion do not offer lead-generation programs.
Nor is lead generation for everyone. For one thing, it works better for groups that have a consumer-facing brand.
The Ensemble Travel Group does some lead generating for some of its specialities, including weddings and its South Pacific Specialists, said Libbie Rice, co-president of Ensemble Travel. While it sends some of these leads to member agencies, Ensemble is not a consumer-facing brand.
“We don’t want to engage a consumer as Ensemble and then have a member agency call who has a totally different name,” she said, out of concern that it might confuse consumers. Rice added that much of Ensemble’s lead-generation efforts are used to develop best practices to share with agencies that they can use on their own.
Moreover, deciding which agent gets which leads presents logistical challenges, said Mike Estill, COO for the Western Association of Travel Agencies. And on the client side, he asked how a lead-generation service can avoid confusing consumers who might call the same toll-free number two weeks in a row and get an agency in Virginia on one call and an agency in California on another.
Beyond that, agencies have to look at their existing workload. Most don’t have agents just sitting around waiting for the phone to ring. They’re already busy, Estill said. So any group that initiates a lead-generation program has to have a workforce that can handle it.
Lead generation takes a lot of time and energy, as the MAST Travel Network learned when it experimented with a such a program last year. MAST President and COO John Werner said the program did generate some business for agencies, but not enough, given the effort put into it. Lead generation remains on MAST’s radar, however, and Werner said the consortium is looking at possibly introducing it in 2014.
Even companies that have built their businesses using lead generation rarely consider it their single source of business.
Tom Carr, president and founder of All-Inclusive Outlet, said he recognized in the late 1990s that to survive, his agency had to be online. But though he built his business using pay-per-click and search engine optimization, his company remains a traditional travel retailer whose agents are employees and who provide the kind of personalized service that keeps customers coming back.
Even today, not all lead generation is generated online; Avoya is actually experimenting with print.
And while agencies and agency groups can use co-op dollars in their lead-generation efforts, suppliers continue to monitor the use of those dollars and the returns they reap as carefully as ever before releasing funding.
Royal Caribbean International, for example, does support travel agency key work and pay-per-click marketing efforts, but it carefully monitors that campaign, right down to requiring that the links connect consumers to a Royal Caribbean-dedicated landing page on the agency’s website.
Follow Kate Rice on Twitter @krtravelweekly.