Boutique business travel agency Mason Horvath has been racking up 80% annual growth for the past three years. They did it by actively discouraging nine out of 10 potential clients.
The company website does not display a single product or mention a single price. That’s a strategic decision, said co-founder Dean Horvath. Most business travel agencies sell product and price. But Mason Horvath sells service and image.
“We are not transaction-based,” Horvath told Travel Market Report. “We are about people, we are about service, we are about fun. We are for people who want to get to know their travel provider. We let go of 90% of the potential clients out there to concentrate on the 10%.”
The company, based in Vancouver, British Columbia, worked with Vancouver-based consultant Nolan Burris to hone its image-based strategy. (See related story, “For Biz Travel Success, Sell Image, Not Tickets” Jan., 12, 2012.) But the service-not-product approach is the agency’s own idea.
Horvath and co-founder Claudia Mason, who has since moved on, previously were top sellers for an online travel agency that focused on air sales. “The lowest airfare, guaranteed” was the company tagline, Horvath said.
But he wanted something different, or he wanted out of the travel business altogether.
What’s wrong with the lowest price travel model?
Horvath: There’s nothing wrong with the model per se. I was their top global salesperson the two years before I left and I didn’t want to be in that model any more. The Internet wasn’t where I saw travel going. If I was going to stay in travel, I wanted a different kind of client.
We went into this knowing that we wanted the higher-end corporate client, rather than transaction-based travel. We realized up front that if we were just going after transactions without any good reason for our clients to fall in love with us as an agency, we wouldn’t be going after our target market. We had to go after these people in a different way.
Why focus on image? Direct advertising on product and price are what gets the phone ringing for most business travel agencies.
Horvath: There is too much competition on price and transactions. You have to realize that you can’t be everything to everybody. That’s a decision you have to make, to let go of 90% of the business that is out there and concentrate on the 10% you want. It is a fundamental decision to give away business. That was the decision we made first.
How is image marketing and advertising different?
Horvath: Our whole effort is focus on what appeals to the 10% we want as customers and help them to like us. When we were first building the company, we weren’t looking at other travel companies. We were looking at other, non-travel products that our clients like and use. We were looking at high-end boutiques, high-end clothing companies, high-end car companies. For us, that was Phase 1.
Phase 2 was getting to know ourselves better and presenting ourselves. We realized that we want customers who are like us as people, customers who are going to be attracted to us as people.
So we built a new website around who we are, people who appreciate the kind of service that we deliver. And conversely, who our customers are not. On the website, we have a lot of things that say, very clearly, if you’re the type of person who likes to shop on the Internet, you’re not for us.
How does discouraging potential clients build business?
Horvath: This isn’t going to bring us business tomorrow. It isn’t going to get the phone ringing this afternoon. But over time, it does. We are selling ourselves, not a product.
If you look at our website, you will not find a single third-party product – no hotel chains, no airlines. We’re selling us, not some product. Only we can sell ourselves. That’s makes us unique.
You have to be in it for the long term to sell image. You can’t be concerned about how much we are going to make this month or this year or the year after. Long term is when this type of marketing pays its dividends.
That’s not to say that we don’t do any direct marketing – we do. We just don’t do price-based direct marketing. We do direct marketing based on service.
In a time when procurement departments are taking control of travel, is it difficult to find service-oriented clients?
Horvath: It was harder before we changed our website. In its prior version, our website didn’t say a lot about us. So when our sales guy went into meetings, he was dealing with people who didn’t really know who we are. He was good – he got meetings – but he ended up dealing with a lot of people who would never be our clients.
When people agree to a meeting today, they already know we are the kind of company they want to do business with. Our sales team is already half-way home when they walk in the door.
Does being selective allow you to charge higher fees?
Horvath: It allows us to charge, yes, but our fees are not extraordinarily higher than other companies. What being selective allows us to do is get the type of client who loves the personal attention and stays with us and talks about us.
We’re based in Vancouver, but we have clients across the continent. We are based on personal relationship, but 95% of our transactions are done by phone and email, just in a more personable way.
What is the downside to focusing on image?
Horvath: It does make it harder if you’re having a bad month. You can’t just throw up a sale and get people in the door.
There has to be a self-imposed discipline when you are looking at a potential client. Even though we could make some money from them, they’re not really our type of client and they are going to take our focus away. It’s not so much a downside as it is a discipline that you have to be cognizant of.
How big can you grow and still be a boutique agency?
Horvath: I don’t know what the answer is yet. I just have to make sure that we are always the boutique company.
Even if we had 500 employees, we have to find a way to still be the boutique agency. If we can’t do that, then we cap it, even at 50, and just don’t grow any bigger. If we become an agency that is not a boutique, then we are no longer who we want to be. We have to watch for that line and recognize it and not pass it.
And that could happen. When your growth rate is, on average, 80% per year for three years, it is hard to keep employees coming in at the same rate we are growing.