Halloween is just days away, and perhaps never in the history of travel have I felt our industry bearing a higher level of fear. Coronavirus new cases are on the rise. The federal government has failed to agree on a new stimulus package at the time of this writing. And the earliest we are likely to see widespread distribution of vaccines is the latter part of 2021.
Some of the fear about our businesses is legitimate. Take the stimulus package. The economy needs a boost, especially the travel industry. The slow growth we are experiencing is not enough to sustain hundreds of thousands of jobs that are barely hanging on, let along bring back the tens of millions of jobs lost due to the precipitous drop off in travel.
We need to hold our politicians accountable for providing the assistance businesses need to get that virtuous cycle of economic growth going again.
But at the same time, some of our fear is misplaced, rising more from a lack of information about our businesses and our customers, versus something material outside of our control.
I hate to sound like a broken record, but here I go. Too many travel advisors don’t know their numbers, have only a loose sense of who their ideal client is, and doubt their true worth. When you mix these three issues together in a witch’s cauldron, you can concoct a paralyzing brew that prevents you from taking action. (I’ve been there too.)
Instead of waiting for fate to come to our assistance, let’s break these three concepts down and see if we can defeat the demons inside us.
Not Knowing Your Numbers
I cannot emphasize this enough. If you don’t know how your income and expenses flow through your business, the future will feel more like a haunted house than a 5-star beachside resort. I know. I’ve had to deal with significant demand drops in businesses I have owned, and businesses I’ve worked in.
I’m here to tell you that you can overcome that fear through some simple steps.
Let’s say you can live off the cash in your business’ bank account through December, but in a typical year, the bulk of your income doesn’t show up until the summer. Well then, you have a legitimate reason to be fearful. You need to dramatically cut your expenses, find a new short-term revenue stream, and/or dip into personal savings till a sustainable income returns.
If none of those options work for you, then your business isn’t going to make it.
However, if your business can survive on say $400 a month, and you can cut your monthly expenses by $200, and find $200 a month in cash through March, then you just bought yourself more time to figure this thing out.
Maybe that’s enough time to develop additional revenue streams, or find a part-time job that can extend your business’ life. In an interview I conducted in September with Travefy’s David Chait he talked about how when his business wasn’t producing enough income he found his skills were of value to a college professor who needed David to help him publish business case studies. Meanwhile, Travefy’s IT team performed contract work writing code for other companies.
At a minimum, knowing your numbers gives you back control, versus having the fate of your business decided for you.
Not Knowing Your Ideal Client
Once you know your numbers, you need to spend time dialing in on your ideal client, forecasting what your business would look like if you had more of them. I assist our clients in Travel Business Mastermind with this all the time.
Everyone’s business is made up of a variety of client types. In most businesses, anywhere from one to three of those client types make up the majority of our income.
The key is narrowing down the makeup of that traveler to a description that allows you to find more of them. For example, if you know that your ideal client is a suburban mom in a dual income family that loves the concept of all-in pricing for family beach vacations, you can target them through a paid ad campaign. If you have zip codes, DMAs, or other demographics that help you narrow down your target market even more, you increase the likelihood of finding more of them.
I know. “Paid ads?!?” That sounds scary. It means spending money. Successful businesses don’t look at marketing expenses as dollars out. They consider it an investment in multiplying those dollars, WHEN they HAVE A PLAN to find new customers.
Let’s say you have a history of converting into closed sales, one out of four moms who contact you. When you know numbers like close rates, you can reverse engineer that ratio into a paid campaign for all-inclusive family vacations.
So, if a Caribbean all-inclusive family vacation for four typically brings you a commission of say $450, and $100 in Facebook ads could secure 12 sales leads, you could turn that $100 into $1,250 [$100 for 12 sales leads = 3 closed sales (25% close rate) = $1,350, minus your $100 ad investment].
And the more you test and learn, the greater likelihood there is that you will attract prospects that close at a higher rate.
Not Knowing Your True Worth
The last piece of the puzzle is feeling confident that you deserve to be paid for what you do. SO many entrepreneurs – including me at times – suffer from the “impostor syndrome.” We think that even though we are exceptional at doing what we do, somehow, we aren’t worthy of being paid well for it.
I find this is the number one reason that travel advisors don’t charge service fees – even after they’ve been in business for years. They feel that because travelers can use online travel agencies, or companies like Costco, charging fees will cause clients to run away like a teenager who thinks Freddie Krueger’s down the hall.
Yes. You will lose those clients who don’t value what you do. But is that the kind of client you really want anyway? Especially in a time of COVID, when your value has never been more important?
Once you know your worth, you’re Buffy the Vampire Slayer, charging fees that nail a stake through the heart of your worst nightmares.
Don’t Let Fear Paralyze You
I know these are scary times. I know the power of fear. But if you’re hanging on to your dreams of entrepreneurship in travel, then you have to start facing down these nightmares. Whistle boldly past the cemetery of fear for cash flow statements. Stop thinking of zombie clients who want you only for your brains.
Courage comes from standing up to your fear, and realizing, there’s no such thing as ghosts after all.
Richard D’Ambrosio is a master storyteller who, for more than 30 years, has helped leading brands like American Express, Virgin Atlantic Airways, the Family Travel Association (FTA), and Thomas Cook Travel tell their stories to their customers, the media, and employees. A professional business coach and content marketing consultant with his own firm, Travel Business Mastermind, Richard most recently has worked with The Travel Institute, Flight Centre USA and a variety of host agencies and tour companies, helping entrepreneurs refine their brands and sharpen their sales and marketing skills. Richard writes regularly about retail travel agencies, social media & marketing, and business management.