Chimera Travel, LLC, Cherry Hill, N.J.
Business Profile: One-woman, home-based agency; business mix: 75% leisure; years in business: five; unaffiliated.
When did you first start charging fees and why?
Northen: I started charging fees about two years ago. Partly it was the decreasing commissions; I wasn’t making as much money and also, quite simply, I realized I was so many times working for nothing. Clients would have me do extensive research and then say, ‘I found it online for cheaper,’ and I had worked weeks for basically nothing. And who wants to work for nothing?
For what services do you charge set fees?
Northen: I charge an hourly fee. I do a consultation first, because I think that’s only fair. I wouldn’t want to pay for something before I’d seen it. So I make sure it’s a good fit and that they want to proceed and then I set an hourly fee. I take their information upfront, but I don’t charge them until the research and the booking is complete. I take a credit card upfront and have them sign something that basically says the work is not refundable so if they choose not to book I will be charging this fee.
What percentage of revenue comes from fees now?
Northen: I would say probably about one-third. I have a lot of clients that want very boutique stuff that’s not going to pay any type of commission, so it’s getting to be more. Ideally, I’d like to be able to raise my fee to the point where, regardless of any commission, I making a decent amount on the fees. But that depends on where the commission structure of hotels and cruises goes. The more they decrease, the more I need my fees.
Do you ever waive your fees?
Northen: I do. I have several lifelong clients. They were my first clients and they book multiple trips a year; they’re consistent. They don’t have me do something unless they’re going to book, and they’re usually very easy clients. As a thank you, I waive my fee for some of them. They refer me to other people, so it’s worth it.
Do you ever encounter objections to fees from new or existing clients?
Northen: I think those people just don’t book. That’s their way of objecting; they don’t say anything outright. I tell people fees are how I get paid, otherwise I’m working for free, and the fee is to compensate me for my work. People seem to be pretty understanding of it. I think it’s partly the demographic; I don’t do a lot budget travel, I do more FITs. They’re spending more money, and they’re professionals who charge for their time and get paid for their time, so they tend to understand.
What is the most difficult thing for you in charging fees?
Northen: Having the guts to tell people that I’m charging fees. People still think we get commission for everything. And it’s hard, especially for people that I have been referred to by a person who never paid a fee. It’s having the guts to tell them that I charge a fee, and why. I get that out of the way upfront so I’m not wasting their time if they’re not going to pay it, and they’re not wasting my time. It’s become a little more standard ; as I’ve grown my business my clientele has gotten more upscale and they seem to understand. Also, I’ve been able to convince myself why I’m worth charging that fee, and once you see your own value it’s easier to show it to others.
When did you last raise your fees?
Northen: I have not raised the fee. I am looking to possibly raise it, but I just have really gotten comfortable with telling everybody about it within the last year.
How has assessing service fees impacted your business?
Northen: I think it’s really made me feel – and to others made me appear – more professional. Because when you’re giving stuff away I think people assume it’s not that good or you’re new to it. But once you charge a fee and say, ‘I’m professional and here’s my hourly fee,’ people take you a little more seriously.
Does an agent's geographic location or market niche determine whether s/he will be able to assess fees?
Northen: There are certain markets and certain demographics where it’s easier. A lot of my clients are professionals – doctors, lawyers, judges – they are used to charging hourly rates. So for me to say I charge – and it’s not a high hourly rate, certainly not what they charge – it’s easier. When you have people looking for a quick getaway and they’re on a budget, it’s real hard to charge a fee because they can find it online without a fee. In cities where people are used to paying, it’s certainly easier. But I think if you provide a good value and you provide something that can’t be replaced by online, you can charge fees anywhere. It’s just a matter of getting people in the mindset and getting them to understand your value.
What advice do you have for agents about introducing fees?
Northen: I would tell agents to assess their value and what they do, assess how much time they spend and how much they think that is worth. Don’t be afraid to do it. It’s okay to start slower, to grandfather people in, and as you get more confident, then adjust it. Also, be upfront about it. I never try to sneak it in and put it in a total cost. I tell people right out, Here’s what I do, here’s my value, and this is why you’re paying. You’re paying for my time and expertise.