As we come off the holidays and kick off the New Year, I want to ask you something, “How were your first quarter sales?” You are probably thinking – “What the heck is he smoking? We are just now starting our first quarter.” Yup, you heard me correctly.
Most businesses operate using one of two calendars. The first is obviously a calendar year, January-December. The second, used primarily for accounting purposes is a fiscal year, which will vary depending on the company. Most of us are familiar with these two, but if you have followed me for any length of time, you know there is a third year. The one I use which is instrumental to your success selling travel – “Selling Year,”
Have you ever thought about why most cruise & tour companies focus so much of their efforts in the fall on Alaska and Europe products? Trying to book you BDM for an event is virtually impossible unless you did so in June or July. Here’s why…
The selling calendar is September – August. There is a simple explanation why this is so important. Your suppliers typically track your production based on a calendar year. Any deposits or sales you have made, regardless of when, are recorded at time of travel. In other words, you are not technically eligible to the full commission until the customer departs on their trip. Those of you who have experienced “commission recalls” understand the significance of this fact.
The average booking window from deposit to departure is typically 4-6 months, as such virtually everything you sell after September 1 will travel in the following calendar year. Depending on your business model, you should have 40%-60% of your 2018 sales on the books by January 1. If you tend to book less expensive or shorter trips (<7 days), you will have less on the books than if your focus on longer or more expensive cruise and tour products which typically have a longer booking window. Regardless, your booking year ends around August 31.
The most important aspect of having booked business is you can more accurately predict cash flow throughout the year. Some months are better than others, for example, April and May should be strong months as this is when you will collect most of the final payments for Alaska and European booking which traditionally travel in the summer months. July and August tend to have lower cashflow simply because less people tend to travel in the fall.
Use your crm to run these commission reports each month: Booked sales, Final Payment Due, and Travel Date. This information can help to predict your cashflow cycles and determine where you need to implement a tactical plan.
A tactical plan does not necessarily mean discounting or selling low-priced, high volume product. It can be as simple as hosting a sales event for a specific product or destination to generate bookings. You don’t need a BDM to personally participate, this is an event you host yourself. If you focus on a product, you may be able to get some co-op marketing funds to help defray costs, otherwise use it educate your prospects on a destination and offer multiple booking options. The important thing to remember is you are promoting your services as a travel professional.
If you find you are behind the “8 Ball”, don’t fret. Recognizing where you are is the first step. Don’t fall into the trap of selling all things to all people to fill the gaps. In today’s competitive marketplace, you need to specialize. There is a reason why department stores such as Sears, Macys, and K-Mart are closing hundreds of stores–the general store concept simply does not work anymore. Niche players rule. Create a focused plan to generate sales for your preferred products when you need them throughout the year.
Starting in May or June, begin working on your plan for the 2019 sales year. Your business will be much more successful because of it.
Dan Chappelle is a professional business advisor, sales coach, author, and speaker. His training and consulting firm helps develop sales oriented business leaders, individual salespeople, and entrepreneurs, His best-selling book, Get Your S.H.I.P. Together: The Wealthy Travel Agent Guide to Sales, is available on Amazon.com.
For information on Dan’s Sales Acceleration programs, visit: www.DanChappelle.com
©2017 Dan Chappelle, CCI Inc.