Agent’s Fee-Based Strategy Drives Bottom Line Results
by Robin Amster /A fees-based business model has proved to be a win-win for travel agent Steve Cousino of Monona, Wisc.-based Journeys by Steve.
The home-based leisure agent said fees have not only boosted his revenues, they’ve allowed him to provide the kind of stellar service that leads to strong repeat business and a steady stream of referrals.
Cousino charges a flat fee ranging from $250 to $400. Though he didn’t always charge fees, today they account for 75% of his revenue.
On his own
Cousino worked for a brick and mortar agency before it shut down. He launched his own home-based business in 2008 with a loyal clientele that followed him from his former agency.
Leisure sales are 100% of his business, and he specializes in premium and luxury cruises and FITs with an emphasis on the U.K.
He is not associated with a consortium, however, he has a host agency kind of relationship with a fellow agent in Nashville who is part of LTA Travel.
Figuring it out
The brick and mortar agency Cousino worked for didn’t charge clients fees, and back then he worked solely on commission.
“When I went home-based it took me about a year and a half to figure out what would work for me,” Cousino said. He decided to charge fees in mid-2009.
The decision was based in large part on Cousino’s view of how the commission model influenced his work with clients.
“It [the commission model] lends itself to your recommending higher-priced products, which will make you more money but not necessarily be the best for the client,” Cousino said.
“I feel I was being conditioned to do that and I didn’t like it,” he added. “It’s harder for me to be objective in what I recommend if I know I’m getting a commission on it and that’s my only revenue.”
“In the end, it [charging fees] is better for the client,” he said. “You’re telling them, ‘This is a way for me to make sure you are my client and not the supplier’s client.’”
A flat fee
Cousino’s minimum fee of $250 can go as high as $400, the most he has yet charged, for a complex trip.
He charges a flat fee per trip, regardless of destination, domestic or international, or the number of people on the trip.
He arrived at the $250 minimum fee by calculating the hours he typically works on an average booking and then determining how many bookings he wanted to make each year.
“At my former agency, I had so many clients I started dropping the ball,” Cousino explained.
“I determined how many bookings I am comfortable with doing at one time and went from there to determine my fee.
“I wanted to make my work load more manageable.”
Lost some, gained more
When he first introduced fees, he charged $50, “mostly because I was scared,” he quipped.
“The $50 was arbitrary, then as I got more comfortable and learned how to incorporate fees in my business, I realized I needed a higher fee.”
Cousino said that while he’s lost some clients due to his fee-based model, he’s gained more.
“Some people question the fee and I have to take time to explain what they get for it,” he said. “Then they are more than happy to pay it because they know they won’t get that quality of service and value elsewhere.” (See sidebar.)
Educating clients
The fee-based model can work in any market, according to Cousino, “as long as you provide the value and help the client understand what the fee is for.”
And that’s his advice to agents who want to start charging fees.
“The biggest part is educating the client,” Cousino said. “You have to have them understand your worth. If you do that, you’ll be fine.”