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Why 80% of your clients will never return

As a business owner, you need to ask yourself a simple question. Why are you in business? Leave off the the lovey dovey marketing fluff like “creating dreams for my clients” and “designing memories to last a lifetime.” Give it to me straight, why are you in business? I believe it’s  a simple answer. There really is only one answer (as far as I am concerned) and it can be summed up in three words. It is not even unique to the travel industry—not by a long shot. Come close, let me whisper the answer in your ear….

TO MAKE MONEY!

Are we all in agreement? Yes, of course we want to deliver the best product and the best experience to our clients so they refer us and keep coming back for more. But why do we want that? To make money! We also want to advertise and get our message out in whatever way we can. Why do we do it? To make money! Sometimes we will try a unique marketing idea that is unconventional—back  when newspaper advertising was still relevant I used to run a small black box in the lower corner of every Friday’s Page 3B in my local paper.  All it had was my web address. Why did I do that? To make money! 

So why is it that when someone else tries to make a buck, we are so fast to jump down their throats? Recently, I saw a tweet:

Who needs a travel agent. Save 15% with our Twitter rate + free wifi.

OK, I am the first to admit that I am not a fan of the wording. But this hotel is in business to make money–just like you and me! While we might like to think that travel suppliers are beholden to travel agents, it has been proven time and time again that they are beholden to their own bottom line—as they should be! Anyone remember the Carnival kiosks in the malls? Can anyone name a supplier that does not accept a direct booking? There are a few, but not many. Have you ever wondered the reason? To make money!

This message was sent to their Twitter followers, not to travel agents specifically. And likely not to a travel agent’s clients–at least in any great number. It was a message promoting their hotel, a discount, and free WiFi to people that voluntarily signed up to receive their information. They have embraced Twitter (and I am sure other social networking tools) to increase their brand awareness, extend their reach to their customer base, and hopefully to make money for their bottom line! It is no different than you or me.

While the agency channel may be supplying guests to the vendors, apparently they must feel we are not doing enough. If we were doing the job to satisfy their bottom line, there would be no need for them to do any other marketing. A scary statistic still holds true in the travel industry. 80% of first time clients do not book subsequent travel with the same agency. This was supported by Carnival and ASTA in studies done several years ago. While I don’t think it is agent ineptness in all cases; I do think that our failure to create a favorable experience is to blame.

The message to me is very clear. We are not doing a good enough job as an industry. What other conclusions can you draw?

We have to focus our efforts on delivering the best experience possible. The travel experience will be handled by the supplier–we need to focus on the transaction and agency experience. We constantly need to be on  our toes looking for the next big thing. As Michael Batt (CEO of Travel Leaders) has said for years, “If you’re not growing, you’re dying.” Now is not the time for the travel agency to stick their heads in the sand and hope for the best.

Complacency is a dangerous thing. As an industry, we were complacent when the airline commission cuts began. As a nation we were complacent on September 10, 2001. If we are not aware of all the activity surrounding us, we are bound to get caught with our pants down. We cannot control what an airline, hotel, tour operator or cruise line does. If Carnival wanted to terminate all agency agreements tomorrow, it could. Then what?

We need to manage our own destiny in this business. We need to be beholden to ourselves and to remain loyal to our clients. Remember, out of your next ten new clients you see, eight will never be back. Vendors are beholden to themselves and  to their shareholders because they need to be successful and they need to make money! Why is it different for an agency? 

Agree? Disagree? Leave a comment and let’s talk!

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