This is part-one in a series about home-based agents and supplier relationships.
Many home-based travel agents are still at a disadvantage when it comes to supplier relationships – despite the fast growth of the home-based sector.
While some suppliers are finding new ways to forge relationships with the burgeoning number of home-based agents, the territorial sales model developed to serve brick and mortar agencies remains a barrier.
“Home-based agents are still challenged by the fact that they are not as visible as storefront agencies,” said Nicole Mazza, chief marketing officer of the Network of Entrepreneurs Selling Travel (NEST), a marketing group for home-based agents.
“Local BDM (business district manager) support for them is still limited.”
As much as suppliers want to identify the home-based agent, many find it an uphill task that requires ingenuity.
“Landing in the right home-based agent’s inbox is still a challenge for the industry,” said Jennifer Halboth, director of channel marketing for the Globus family of brands. “They may be tied to a host or booking under a phone number that is not unique to them. They are lone rangers.”
Host model issues
Suppliers are especially challenged to identify and cultivate relationships with home-based agents who work through host agencies, said Gary Fee, president of the Outside Sales Support Network (OSSN), a trade group for home-based and independent agents.
While the access to preferred suppliers and marketing support that host agencies provide is beneficial to agents, the down side is that often it is the host – not the individual agent – who is known to the supplier.
Who gets credit?
“Suppliers are challenged in being able to see where their business is coming from and who to give credit to,” Fee said, adding that independent home-based agents are much easier for suppliers to identify.
“The challenge is that the host agency is getting full credit for the sale, not the army of agents below,” he said. “This can cause difficulty because the national supplier may want to reach out to those individuals selling their products and services in order to give them education and support.”
Compounding the problem is that host agencies sometimes “have issues” with suppliers contacting their contracted agents directly, he added.
Not my territory
Another roadblock in the home-based agent-supplier relationship is that many suppliers rely on BDMs as their main contact point with agents, according to Fee.
If a home-based agent is based in a different region than the host agency, the BDM may have little incentive to work with the agent, he said.
“If the agent lives in Tucson and the host agency is in South Dakota, the agent’s local BDM doesn’t get anything out of the deal because the sales are funneled to the host agency,” he said. “BDMs are not motivated to work with an agent where they won’t get credit for the business.”
The BDM model stems from an earlier era when most agencies were brick and mortar and their location mattered, Fee noted. “Now location doesn’t matter.”
Fee cited Royal Caribbean and Celebrity as examples of suppliers who are “getting their arms” around the problem.
“They have done a great job of identifying those agents who work under the host,” he said. “Some are able to pro-rate support back to the BDM, so the problem is addressed.”
Stephanie Lee, a former director of host agency TravelQuest, said some cruise lines are making it possible for BDMs to identify by their phone numbers the individual agents in their territory who are under a host agency’s umbrella. “The host's phone number is still the main identification number, but a secondary phone field allows cruise lines to drill down into the next level of the hierarchy,” explained Lee, who now runs the website Host Agency Reviews.
At least one supplier has created a “territory” for a BDM that consists of larger host agencies, regardless of where the host is located, Lee said.
New structures needed
Suppliers need to look at their internal compensation structures and find ways to support agents who fall outside of certain territories, said Jackie Friedman, president of Nexion, a host agency in Irving, Texas.
“The home-based agent and supplier relationship is improving, but it takes an effort all around,” she said.
“The suppliers know they have to have specific programs in place for home-based agents. However, many suppliers struggle with providing the booking technology that allows an agent to run their own business while being affiliated with a host.”
Next time: What home-based agents can do to forge beneficial relationships with suppliers.