I heard from an agent last week that she told her client she now had to start charging fees because supplier commissions were down or non-existent. She told her client her fee was $65. Her client’s response? “I’d pay you $100.”
This anecdote is one of many that supports a larger logic looming over the post-COVID travel agent world. If one good thing is to come out of all of this, it’s that when travel returns, the travelling public will see the value of booking with a knowledgeable agent. We have once again become the professionals, despite all of the DIY booking tools the Internet has brought about.
There are anecdotes to support the opposite as well of course, and Internet comment forums from people who adamantly believe they can do better that can be depressing to read if you’re an agent. But even those help give some direction to agents looking to pick up their businesses again.
WHO TO CHARGE?
It’s all about knowing your value and realizing that, just maybe, you don’t need to book absolutely everyone who enquires with you.
This may require a different mindset in a post-COVID world than some have had previously.
I’ve seen many agents discount their commissions or not charge fees just to win the booking, and there are times when that may make sense, perhaps as a one-off favour to ensure you get the larger booking down the road or as a thank you for years of doing business.
But as a general rule, discounting yourself and not charging fees trains your client that price is all you have to offer. You are not encouraging loyalty based on the professional service you are delivering.
A client who books with you for $1 less will leave you for $1 less.
Charge your fees to all of your clients. Build a business based on consistency.
WHEN TO CHARGE?
How often have you done all of the work for a client only to have them go book themselves online? I know, it’s an uncountable number.
There are agents who swear by charging a service fee upfront for any all-inclusive package enquiry or complicated booking, letting the clients know that the cost of the fee would put towards the final cost of their trip.
Charging a fee like this upfront may turn some clients away, and potential sales too, but it also helps weed out those clients who may not have booked with you anyway because they always intended to book the trip themselves.
Even if you don’t charge the fee until the time of booking, discussing your fees upfront to set expectations will give you the opportunity to measure your client’s response and assess how serious they are to work with you.
WHAT TO CHARGE?
I know some agents who break down their fees by enquiry type, charging a different fee for domestic airfare vs. a cruise, for example.
The price point of around $50 has been consistent in the industry for years and represents a threshold that customer have been willing to pay, though there is probably room for that to grow.
When I was last an agent, back in the days when the Internet was new and my clients could find things on their home computers just a hair faster than I could in Leisurelink, I had a client ask me the question “How do you make money?”
The “C” word, i.e. commission, was little used back then by my colleagues but I didn’t shy away from it.
“Some of our supplier partners pay us commission on the products we sell, and some don’t,” I explained. “Instead of charging people $100 when they are booking something with no commission and nothing when I am getting paid commission, I charge everyone $50.”
The answer sufficed and the client appreciated my honesty and booked with me many times over the years. It helped that I also knew exactly what room requests to make for him and how many a la cartes he needed to have during the week without him needing to tell me every time.
Which leads to our most important point…
The biggest obstacle to charging fees is an agent’s willingness to face the fear of rejection head on.
The worst thing a client can do is say no and book elsewhere.
You are not asking for anything unreasonable. You are charging a fair price that you are going to back up with inside knowledge of the industry, hard work and excellent service.
You deserve the fee you are asking for. Just like a hairdresser or barber deserves their tip and just like you’ll pay more at a restaurant for a meal you could have made at home. You are providing a valuable service and you are giving your client, not only incredible travel advice and a great experience, but you are giving them their time back.
By taking on their enquiry and navigating all of the variables yourself, you are saving them the hours they would spend doing it themselves. Those are hours they can spend with their families, hours they can use to recharge after work, hours they can put towards dreaming of travel instead of doing it.
Lastly, when you charge a client a fee, you are innately invested in ensuring everything goes smoothly because you want to make sure your fee is justified. The more care you put into knowing your client’s needs, the easier you make it for them to just come back to you because you’ve shown you know them so well and have been able to meet their needs every time, which leads to more repeat clientele and referral business.
And those are the bookings you want. Those are the bookings that will help you build a successful business and make it easier to forget the clients you lost in the beginning who never saw the value in what you do anyway.
Lee Zanello has been helping agents build safety nets into their business for over 15 years, with the last five focused on Independent agents who partner with Independent by Flight Centre in Canada. He knows how difficult it can be for an Independent Agent to manage all of the aspects of their business that they need to and how important it is to provide and automate as many processes as possible from the host agency side of the business. This is the second piece in a series of Independent Insights based off of experience and learnings from agents within the Independent community. Read the first column in the Independent Insights series here.