Travel Agent Musings

Like an artist inspired to paint by his surroundings, my inspiration for this entry came from being in a Travel Agency this past week. My move to the supplier/technology side of the industry doesn’t present me with many opportunities to observe the front line dealings of agencies. Usually when I do get to visit an agency, I spend most of my time in a meeting room.

 But this past week I had the pleasure of being in a retail agency and watching an incredible group of travel professionals work, and I want to share some of my observations.

 Right off the bat, it was great to see junior agents who truly love their chosen profession. These up-and-comers willingly embraced change and were so quick to adapt to whatever came their way. They treated every customer with respect and appreciation for their business. If they are the future of travel, we have a lot to look forward to.

 As for the senior agents, it’s easy to tell the good ones by how busy they are. The best even work on days off, just to try and keep up.  As the saying goes ‘you have to make hay when the sun shines’.

 What I loved about this group is their continued personal investment in training and education to become ‘destination and product specialists’. They don’t rest on their laurels, even though many of them have been doing this for 10 or 20 years. Not unlike a surgeons, lawyers, even hairdressers, agents have to stay current and up-to-date on what’s new and trendy. These agents understand that they alone are responsible for their personal development, and they take it very seriously.

 Much has been written and debated about the future of travel agents, and it’s true that the travel agents of yesteryear are a dying breed. Anybody can go online and search airfares; why would they need a travel agent to do that?   To succeed and grow in this business, we have to provide value to the consumer. Especially if we administer fees for our services, clients will (and do) expect more.

 I encountered a perfect example of the value of a good travel agent this week.  A couple wanted to attend a wedding in Atlantic City, New Jersey. There isn’t an airport in Atlantic City, so the agent researched the closest airport, and then arranged ground transportation to and from. What would seem like a simple booking was, in the end, rather complex, and required a lot of time to piece together.

 Situations like the Icelandic Volcanic Ash Crisis where more than 95,000 flights were cancelled throughout Europe, or the recent Tsunami in Japan remind us why  having a reliable travel agent is still important.

 Are these isolated incidents? Maybe. But imagine if you were booked to travel on one of those 95,000 cancelled flights in Europe, and you just wanted to get home. A good travel agent would prove invaluable to you. They know whom to contact and how in emergency situations such as this, and in the end you would no doubt be happy with the return you got on that 35 or 50 dollar service fee you paid.

 No matter how the industry may change, agents who care about their clients, and are willing to go the extra mile for them will never go out of style.

 This week, when I saw travel agents actually walk up to a customer to greet them – not just sitting behind a desk or motioning them to come sit down – it reconfirmed my belief that these agents get it.

 I read a book in the 90’s by Kenneth Blanchard called Raving Fans and as James F. Nordstrom, Co Chairman of Nordstroms said, “Making your customers Raving Fans is the competitive edge today.” It is the simple things that mean the most.

 So, how does your agency work to create Raving Fans?

Rhonda

Who remembers these numbers: 8.25% and 9%? Ring any bells?

 If, like me, you’ve worked in the travel industry more than 10 years, they probably do. These were the old commission rates that airlines used to pay travel agents for each domestic and international ticket sold, respectively. Those were the good old days.

 Then in 2002, Delta Airlines, along with many other U.S. carriers, stopped paying commissions, citing the need to reduce expenses. This resulted in a major loss of revenue for travel agencies; it meant they had to find new ways to make money if they were going to survive.

 This was how “service fees” were born. They came onto the scene out of necessity, and they’re still a necessary source of revenue for most agencies today. But the transition from commissions to fees has been a difficult one, and many agencies still struggle with the application of a fee model. That’s bad news bears!

 So, since service fees are so important, how can agencies apply them more effectively?

 The real challenge in the application of fees is the manual process involved.  Most agencies have a fee structure based on the type of travel being sold, and how the client is served (ie. online, in person, over the phone).  This can lead to inaccuracies and inconsistencies that can cost a lot of money in the long term.

 The solution is to do away with the manual application of fees.

 In 2007, Amadeus commissioned a study comparing agencies that calculate service fees manually to those who use automated solutions. The study, conducted by Dr. Fried and Partners, found that agencies that automated their service fees saw a remarkable increase in revenue.

 This increase can be as high as 28%. Not only that, but automation also improves productivity by 67% in the area of fee application, and 12% in the overall booking process. The study also found that the ‘automated’ agencies could make use of a more varied and extensive list of fees than ‘manual agencies’.

 It concludes that “maximizing service fee revenue is crucial as the travel agency business model relies ever more on service fees as airline commissions disappear.”

 It’s true: we’ll probably never get our 8% commissions back from the airlines. But if we can automate our service fees, and increase our revenue by 28%, maybe that’s not such a bad trade-off.

But you tell me: how does your agency apply service fees? Is it effective? Comment, and let me know!

Rhonda

So far, my blog entries have been customer-focused, stressing the importance of knowing your clients and giving them what they need. But this is just one practice of a successful travel agency. Another is valuing and caring for your employees. All too often, managers and owners forget to recognize the front line agent. After all, your agents are the ones responsible for managing your relationships with customers. If your employees ain’t happy, ain’t nobody happy!

 When was the last time a manager at your company sat down with an employee to set goals, review successes, or just say ‘thank you’ for a job well done? We have all heard the saying “it’s the little things that mean the most”. Well, encouragement is one of those little things. As children we all got encouragement for finishing our broccoli or going potty. Now as adults, we need encouragement every now and then to remind us that we are a valued part of the team. (Of course, if you’re still encouraging your employees when they go potty, you might be micromanaging a bit!)

 But encouragement by itself isn’t enough. Effective managers need to communicate with their employees specifically what they have done well, and exactly what their next steps should be. After 30+ years in the travel industry, I am always amazed how few agents know their personal productivity numbers (ie. gross sales, annual gross revenue, % of revenue to sales etc). These kind of numbers should be part of the dialogue between managers and employees.

 Simply being told you’re doing  a good job is nice, but it gives you very little information. Does it mean you’re a good team player? That you keep the office neat? That you have the best sales numbers? That you sell only preferred suppliers? A ‘good job’ can be a very subjective thing.

 One way to make the criteria of success clearer is to set SMART goals for your employees (Specific, Measurable, Attainable, Realistic and Timely). If you have never set formal goals before, start with the basics:

-          Annual Sales Goal (break it into 12 months, some months may be higher than others depending on your business).

-          Annual Revenue Goal.

-          % of Insurance Revenue to Total or # of policies to sell each month.

Make a point to sit with each agent on a monthly or bi-monthly basis to review their goals and achievements. It’s important to make this a two-way communication, and remember: goals can be adjusted as needed.

 During my time as a Regional Sales Manager, when I visited each of my branches, I always reviewed branch performance with the manager. Then, I always took the time to sit with the agents for a short review for 15-30 minutes, and talked with them about their performance. In advance, I reviewed their productivity so the communication was personal.

This kind of open communication makes employees happy because it lets them know where they stand. It also allows managers to reward them when they do a ‘good job’, in a way that is personal and specific to their actual achievements.

 You know what they say: happy employees = happy customers.

Rhonda