The Secret Formula to Not Losing Clients | TravelResearchOnline

The Secret Formula to Not Losing Clients

If you have been following me for any length of time, you have probably noticed I only use a few quotes to reinforce my messages. One of my favorites is from a management guru, the late Peter Drucker, “The purpose of a business is to create and keep customers.”

The cost of getting a new customer is astronomically high in terms of both money and time. In fact, it is not unusual to lose money or barely break even on their first transaction. That’s right, run the numbers and I think you may be in for a shock once you factor in real costs, time and overhead – not just the marketing expenditures.

We usually spend a disproportionate amount of time and money on new customer acquisition, then tend to fail at giving customer retention the respect it deserves.
I always ask my audiences, “What percentage of your business is from repeat customers?” The response is typically 60, 70, or even 80%. Sometimes I get 40- 50%, but not often. It might surprise you that based on analysis from multiple travel organizations and consortia, the number is less than 30%. The main reason for such high estimates is the tendency to include referrals when reporting repeat business.

Mr. Drucker was a very wise man. He knew that the cost of sale diminishes with each subsequent transaction. It is for this reason we should focus on the later part of his simple, yet profound statement: “keep customers”.

It is frustrating to see the number of travel “professionals” who approach each sales opportunity with a “one and done” mentality. They tend to believe their service is so good that the customer would not dream of booking with another agency. Remember, if less than 30% book with the same agent or agency two or more times, statistically you will need to replace over 70% of your customers.

As already mentioned, customer acquisition is extremely expensive. So, why don’t we make more of an effort to retain the ones we already have. According to Microsoft, an increase in customer retention by as little as 5% can lead to a subsequent increase in profits by 25-95%. Not sales – PROFITS!

The customer doesn’t stop taking vacations, they just stop booking with you. According to the same study (and backed up by others) the number one reason customers leave (68%) is they don’t believe you care about them. The second, they (14%) are dissatisfied with your service. Third, they (9%) are persuaded to leave for a competitor – usually because of price.

Based on these results, the key to customer retention is to show them the love whether they currently have a trip on the books or not. As in most situations, the 80/20 rule applies. 20% of your customers provide 80% of the revenue, so it is vitally important to make them feel loved and not like a meal ticket.
The key is to have a retention marketing strategy that focuses on the five “C’s” – Communication, Content, Consistency, Community, and Care.

1. Communication: Not matter how busy you think you are, you must develop a clear plan to maintain an open dialogue with your customers. Calendarize your communications. Email, customer events, newsletter, call blocks, consortia marketing, etc. A good balance of personalized content vs. promotions is key to engagement. Try to maintain a 4:1 ratio of content to promotions.

2. Content: Most agencies use Clientbase or a similar product for CRM purposes. It is important to record as much information about your clients as possible as well as update when needed. One key to retention is to give the customer information relevant to their wants and needs. For example, you don’t want to send a Carnival promotion to a river cruise client. You want to send them relevant information about the regions and products for which they have expressed interest. Your personal recommendations are often the main thing the reader looks for. A few consortia and host agencies have marketing programs designed to get relevant content in front of your clients. These programs are only as good as the data you collect and your participation.

3. Consistency: It is vitally important to communicate on a regular basis, to the point your messages are expected. This is where the marketing law of recency and frequency comes into play. Typically, the customer will buy from the seller who has communicated most recently and on a regular basis, because trust and awareness has been built. This is key, since retail powerhouses such as VTG know the value of consistency and communicate on the same day every week to tens of millions of subscribers.

4. Community: Keeping your customers involved with your company and other clients is the key to making them feel wanted, and needed, as part of your family. They love the personalization and sharing of photos and experiences with others. Creating community is easier than ever, especially when we may have clients all over the world. If you don’t have a Facebook group for your business, drop everything and set it up now – then invite your clients to participate. If your clientele is primarily local, appreciation events, cruise nights, and contests work great to keep them involved. Remember:  Community inspires Loyalty.

5. Care: This should go without saying, but let them know you care about them as a person, not just a client.  Take the time to call with no other agenda than to just say ‘Hi.’ If you hear of an illness or death in the family, send a card or visit. A good indication that they know you care is they will become your friends, take you to dinner, or invite you to travel with them. It’s the little things that count.

Increase retention and you will find that your profits will skyrocket, your customer base will expand through a proactive referral system, and your marketing costs will decrease dramatically. It is usually more efficient to have a solid core of profitable customers that you can service over the lifetime of their travel experiences, than to continuously replace up to 75% of your clients annually.

I have always been of the belief that if you take care of your customers, they will take care of you. This philosophy has served me well my entire career. If customer retention is not a top priority, it may be time to rethink your overall business strategy because the law of diminishing returns will eventually catch up with you.


Dan Chappelle helps travel sales professionals achieve full potential by transforming their mindset and focusing on fundamentals to produce real results. He speaks internationally on strategic business development in the travel & tourism vertical. His signature keynote & workshop “Secrets of Selling to the Affluent Traveler” helps organizations, entrepreneurs, sales professionals, employees, and business owners gain meaningful competitive advantage.

His new book “Get Your S.H.I.P Together – The Wealthy Travel Agent Guide to Sales” is now available on Amazon.com in both paperback and Kindle versions. For information on Dan’s education and sales programs, visit www.WealthyTravelAgent.com

Share your thoughts on “The Secret Formula to Not Losing Clients”

You must be logged in to post a comment.