Does MLM have it right? | Travel Research Online


Does MLM have it right?

No, I have not been drinking the Kool-Aid but this week I was reading some comments on the website of a “competitor” in response to an article about YTB and began to think.  In some aspects of their business, YTB (and most MLMs) really do excel. Now with MLM, they tend to take a good thing and amplify it—a lot; but looking at some basic concepts might teach legitimate travel professionals a thing or two.

Referrals. It is indisputable that YTB is fantastic at asking for referrals. Just pick up any one of their SEC filings and it is plain to see that the bulk of their income does not come from travel (or even girdles) but from referring other people into the scheme—recruiting. Now, if we look at that from a legitimate travel perspective, as an industry, we are not so good. YTB instructs their people to pitch the YTB “opportunity” to anyone within a three foot radius. A bit extreme for sure, but why aren’t travel professionals half as aggressive in asking for a business referral when someone else has initiated the conversation? With Single Parent Travel, one of the key questions I ask is, “Are you friends with any other single parents who might like to come along?” It really is that simple. Plus there is no need to tick off the lady behind you in the supermarket.

Follow up. Once you are in the clutches of a MLMer, there are two ways out—you either terminate the relationship and vow to never speak again, or you end up paying $50 a month to boost the earnings to the few at the top of the food chain. Once they have some information on you, they are relentless. Why aren’t travel professionals half as relentless in following up with prospects?  Life happens and just because someone does not return your one follow up email or your one follow up phone call, does not necessarily mean they are not interested. It might. But you won’t know until you re-connect. And remember, these prospects made the initial inquiry. Do you have a sales process for follow up? When someone calls our office, they are tagged as a “lead” and then we make 9 attempts to contact the person before dropping them. We have 4 emails, 4 phone calls (over a month period) followed by a letter with a business card and an agency flier.

Income. While most of them don’t make anywhere near what most people would consider an income, they do profess that one secret to success in life is “multiple streams of income”. This is true and this plays very well into their pitch (in the case of YTB) for paying to be a Travel Site Owner and an Associate or Affiliate selling travel sites. Over the years, legitimate travel professionals have looked to additional income streams as well. Remember luggage in the agency? Huge checks from the GDS suppliers? Airline overrides? It does make sense, so why aren’t travel professionals pursuing those additional streams as aggressively?  Are you pre-selling commissionable shore excursions? Are you charging concierge fees? Do you have a pet walking option for your traveling families? Or are you relying on commissions? Think a bit out of the box. In 2002, I designed a cartoon character named Fred E Flyer. We sold copies at $100 a piece and that revenue made the difference between profit and loss for 2002—granted only by $74.

Sure MLM has been, and continues to be a scourge on the industry; but as I reflect, they do have some legitimate strengths which we all could emulate.  Perhaps they exist as a temporary necessary evil. There has not been one in the travel industry that has survived, and very few in ANY industry survive. They live a relatively short life by over amplifying and eventually collapse amongst themselves. Time will tell, but for now, I need to go get another glass of Kool-Aid.

EDITOR’S PLEA: Our local police department has asked me to help spread the word in hopes of winning a $5000 grant for a childrens’ bicycling program called Revolution Kids. The winner is decided by the number of online votes received by December 15th. The Foundation requires a registration to vote (to verify email addresses) and you can vote up to three times and it can be in a single session. If you enjoy TRO and the insights we bring, please consider helping out my local community with your vote.  To vote, you can go here. If you are interested in reading the press release and backstory (which also has the links) you can read it here.

Many thanks,

  3 thoughts on “Does MLM have it right?

  1. Laura says:

    John those are some interesting points. While I hate the way that the mlms have cheapened the industry, they do know how to work referrals!

  2. These MLM people have been around for several decades that I know of— and, yes, they are sometimes obnoxious— but you are right in that there are many travel agents who could emulate some of their efforts. T-As could take actions you describe instead of whining and laying back waiting for manna from heaven.

  3. Kathleen says:

    I disagree that YTB cheapened the industry, there have been many “travel agents” who have scammed customers, & even school groups and have taken the money & ran, that cheapened the industry. YTB did not take away business from the traditional brick & mortar travel agencies the internet did, YTB just made a better breadbox and capitolized on the internet shift. This is a trillion dollar business there is plenty to go around. Tearing each other down is what cheapens the industry.
    If the travel industry is that big I would be happy with a little pepperoni!
    Stop the cheap shots that is what is unprofessional.

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