After the latest round of commission cuts, a travel agency owner
called me and took exception to the suggestion that agencies can
reduce their dependence on airline tickets.
His customers wanted airline tickets, he said, so he had to sell
them. Moreover, he wouldn't charge service fees because his
customers wouldn't pay them.
His point of view is not atypical. While many agencies boldly
are redefining their businesses, many others are determined to do
business as usual right down to the last day.
These agencies allow their customers to define their businesses.
If their customers just want airline tickets, so be it. If they all
decide to fly short-haul domestic trips, so be it. Nothing you can
do about it, they say, but sweat it out.
Getting past the idea of selling whatever the customer wants
isn't easy. But a lot of agencies are making the transition that
results in a redefinition of what they'll sell and how much they'll
charge for it.
The notion of limiting the supply of products and services you
offer isn't a novelty in most other retail businesses. How many
times have you walked into a shop and asked for something only to
be told that the store doesn't carry it? Does that mean you'll
never go back again because you've been rebuffed, or do you accept
the fact that the proprietors have the right to sell what they
choose?
It is fundamental to retailing that proprietors choose what they
wish to sell and charge prices that reflect their own cost of
operation and allow for a reasonable profit.
If a retailer gets a great buy on merchandise, the public
benefits. If items cost the retailer more to handle, the public
pays more.
The agent who called me clings to the theory that he can ill
afford to turn customers away or charge them fees for airline
tickets because today's short-haul domestic air client could be
tomorrow's world-cruise client. That may be hypothetically true,
but my sense is it doesn't happen very often.
Choosing what you wish to sell does carry the implication that a
first-time prospect or, perhaps, a longtime client will be
disappointed on occasion and may even take his or her trade
elsewhere.
But if travel agents are to weather the heavy storm of airline
commission cuts, they will have to get used to the idea that losing
a customer isn't the end of the world.
Part of the problem some have with this notion is that they
don't really think of themselves as retailers. In the minds of some
agents, theirs is a higher calling demeaned by the term "retailer."
To these agents, the notion of turning anyone away is
unacceptable.
That's a noble thought, but in these times, it could be a
prescription for failure.