This week TRO’s 365 Guide will be examining the concept of Lean Thinking and how it can be applied to your travel practice. Lean Thinking is “lean” because it seeks methods of achieving more with less waste of resources. One of the key undertakings in a Lean Thinking analysis is to understand your current way of doing business and the value your clients derive from all of your activities. Then, the company seeks to improve the entire process, increasing the value to the client and decreasing the waste of time, energy and resources. The desire to constantly improve all of your business processes is often referred to as Kaizen – Japanese for “continual improvement” – improvement taken on not as a technique but rather as a culture within your organization.
Most travel consultants readily understand and believe in the value of travel insurance, so let’s use that as an example. The red line in the chart below represents a hypothetical process you may be using. You meet with your clients to gather information about their trip. In the red process line, you make no mention of travel insurance. The client patiently waits for your presentation. You make the presentation, present the costs of the trip. The client is happy. Then, you ask if the client would like to add travel insurance to the trip. You discover that only 30% of your clients are purchasing travel insurance from you using this process. That represents a wasted effort, and less value for your clients, for 70% of your presentations. What can you do to improve the process? The blue line in the chart is an alternative way to present the insurance. You introduce the idea of travel insurance at your first meeting, rather than at the end, explaining its value and importance. When you then present the cost of the entire vacation as the last step, you have built-in the travel insurance. It is expected by the client, it is a part of the overall value. In the first instance, the red line, you present the cost and THEN try to add on what the client perceives as an additional cost. This moves the client into the Pain range of emotions as they contemplate insurance. By moving the presentation of travel insurance to the beginning of the process rather than as an additional step at the end, you are using the higher emotional state of your client to your advantage. Your clients perceive insurance as a component of value and will more likely purchase insurance to protect their vacation as part of the total package rather than as an “add-on”. Note that in the blue line flow, you have eliminated a step by collapsing your insurance presentation into your first meeting, good evidence that you have eliminated waste. Our travel insurance process is just one small example of how a dedication to continual improvement can result in greater value for clients and greater profits for your travel practice. It would be easy to continue to do business as you always have and assume that 70% of clients won’t buy insurance. However, a tiny shift in emphasis results in more value to your client, more profit for you! Kaizen becomes a daily activity for a company dedicated to Lean Thinking. Seeking out waste in a process and discovering new ways to organize flow should involve everyone in the organization, participating in an effort to enhance the ultimate value for clients. The catalyst for change is often the simple recognition that you would like for something in the organization to be different. You want more clients to purchase shore excursions through you instead of on-board your cruise. You want to develop more repeat business. You want to sell more travel insurance. There is a very good chance that by understanding the issue from the value perspective of your client and then mapping out the value stream, you can effect a positive change in your way of doing business. Tomorrow we will look at the importance of standardizing your procedures for Lean Thinking to be effective in your travel practice.