Agent’s Fee Strategy Lets Him Focus on High Spenders
by Andrew SheivachmanThis is the latest in an occasional series about customer service fees. In this issue we feature:
Chuck Flagg
Co-owner
The Flagg Agency, Canton, Ga.
Business Profile: Home-based, one fulltime agent. Business mix: 100% leisure. Years in business: four.
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Chuck Flagg bought his agency in mid-2008, just before the economy tanked. “I was starting my marketing the moment Lehman Brothers failed,” recalled the home-based Flagg, co-owner of a Cruise Holidays franchise.
This year, sales are up and Flagg is having his best year yet, including selling more high-end cruises. His service fee strategy is part of the reason, Flagg told Travel Market Report.
Why did you first start charging fees?
Flagg: I was doing a lot of work for people who would shop and never call back. I’d find out on Facebook about their wonderful cruise vacation a few months later.
I mostly do cruises. I have consistently noticed, looking at particular cruises year after year, that the commission has gone down. Part of the reason I do the fees is that I don’t let any supplier determine how much I should be compensated for the work I do for my client.
How much are your fees and for what services?
Flagg: I raised my fee after I got my MCC certification early this year. I went from charging a $150 consultation fee to charging a $250 consultation fee.
I also offer unlimited travel consultations, limited to 25 clients a year. I charge $995 for couples or $1,495 for families. I limit the number of clients, because I can’t charge that much and offer it for everyone.
How do you discuss fees with new clients?
Flagg: I first educate them on the value of what I will provide them by engaging my services. During an initial consultation, I give them a questionnaire that gets into what they are looking for as far as wants or needs. I also explain upfront that after the initial meeting I charge a retainer/professional fee before beginning my research.
Do you ever get resistance when explaining your fee?
Flagg: I often get resistance, since I explain my fee before I do the work. If they don’t like the fee, I haven’t given any time to the work. You’re giving them knowledge, which is a lot different from information. Knowledge is Google-proof.
Do you ever waive your fees?
Flagg: No. People are not paying that fee for me to buy a cruise. I charge a fee before I do the research and give them a quote, then they book and I don’t charge them again. They’re paying the fee for the support they’re getting before, during and after the cruise.
They’re also paying for support and the network I’ve got through Cruise Holidays, so if something goes wrong they’ve got a guy on their side with an organization that sells millions of dollars of travel to a supplier.
Has assessing a fee changed your business?
Flagg: Charging a fee is yielding higher-spending clients. I’m not selling a lot of $399 three-day cruises to the Bahamas. I’m selling 10- to 14-day cruises, river cruises and higher-end to luxury cruises. I’d be selling more travel if the price of airfare fell.
Most of my business comes from repeats and referrals. I tell them early on that I charge a fee for what I do, and that I’m a one-person shop so I can’t service everybody.
Fees, for me, get rid of the tire kickers and let me deal with serious clients. I had an engineer who handles 500 cell towers across the country eagerly pay the fee. She couldn’t deal with the intricacies of planning travel and was willing to pay a professional for the peace of mind.
What kinds of agents do you see embracing a fee-based model?
Flagg: I see it happening more and more on the storefront side. There are some who take a fee and apply it to the booking, but to me that represents a booking fee.
My knowledge is worth something above and beyond. I’m not selling travel, I’m selling myself. I liken myself to a fee-based financial consultant – on some products we sell, we also make a commission. I’m selling value, and I stand behind what I sell.
