Seven Steps To Increasing Service Fees

 

When luxury travel advisor Trish Gastineau, MCC, CTC, decided to raise her service fees by 20% in 2017, she found herself facing the same fears as agents who are new to charging fees: “Is it too much money? Am I worthy of charging that fee? Am I going to lose business if I increase my fees? How do I present it?”

 

Gastineau is an independent agent in Naples, FL, who sells travel under the name Simply Customized Travel. A longtime proponent of fees, she conducts training sessions for agents about fees and offers individual coaching. But until this year she had allowed her own fees to stagnate at the same levels since 2009.

 

“I had to have that same conversation with myself that I’ve had with so many agents: ‘Yes, some people are not going to pay this, but that does not determine my value. I’m providing a service and my service is not for everybody.’ “It starts with our valuing what we do and what we have to offer,” she added.

 

It is usually subconscious beliefs and fear of rejection that hold agents back from increasing their fees or charging fees at all, Gastineau told Travel Market Report. Here’s her prescription for getting past that fear, whether you’re looking to increase your fees or to charge fees for the first time.

 

Once you decide on your fee schedule, write it down, along with your planned start date, on a 3X5 file card. Well in advance of implementing the new fees, post the card prominently so you’ll see it every day.

 

Gastineau did this for herself back in 2016 when she decided to raise her fees. “Every day I would look at this card, so my subconscious is getting the message that when 2017 comes that’s the amount I’m going to be charging people.”

 

“It’s a muscle memory thing,” Gastineau explained. “You’re reading it with your eyes, and you speak it out loud, so you’re hearing it. You’re letting your subconscious know this is our new normal. It’s exercising that self-confidence muscle.”

 

Tell your clients that “starting on a certain date we are going to charge this amount.” If you choose to grandfather in longtime clients on their next booking, be sure to include your new fee amount on the invoice with a note that you’re waiving the fee this time because they’ve been loyal customers. “You’re training the client that this is what the fee will be,” Gastineau explained.

 

Gastineau lays out her fees to new customers during a free 30-minute consultation that she also uses to assess whether potential clients will be a good fit.

 

During the consultation she finds out what kind of trip the client has in mind and offers a few suggestions. She also explains that her boutique agency provides a high level of service, so she’s not able to work with everyone. Then she introduces her fees and says, “If you would like to hire me, I’ll send you an invoice. Once you pay the invoice, we’ll get started.” The invoice indicates that once she’s sent out an initial itinerary her fee is nonrefundable.

 

Gastineau’s 2017 fees range from $297 per person for seven- to 14-day FIT itineraries to $497 per person for 22- to 30-day itineraries, plus a fee for booking air tickets. “If they’re doing a ticket in conjunction with a package, I discount it a little. I try to do what feels fair.”

 

Give yourself the freedom to occasionally adjust or waive a fee, but don’t overdo it. “We don’t want to get in the habit of constantly waiving fees because we’re not comfortable with the amount or with the process. That defeats the purpose.”

 

Similarly, don’t sabotage yourself by making your fee a plan-to-go deposit. Rather than say, “‘We have this fee of $100, but we only keep it if you don’t go,’ just leave that last crazy bit out,” she advised. “If you’re quoting a service fee and apologizing for it outright, or the way you’re presenting it comes across as an apology, then people are going to doubt that you’re worth it.”

 

The reality is that when you raise your fees, you likely will lose some sales. Gastineau said she’s lost a couple of potential new sales this year, but all her current clients have been fine with the change, and she has closed more sales with new customers than she’s lost.

 

In any case, she said, if an existing client does balk at your fees, they likely weren’t an ideal client.

 

In the last two years, Gastineau’s average sale and commission have gone up considerably, to the point where $20,000 bookings have become an almost daily occurrence. She believes her fees have helped drive the shift in business.

 

“By using my service fees as kind of a velvet rope, where not everybody gets in, it makes more room for people that are willing to pay my fee.” As it happens, those customers willing to pay a higher fee tend to be looking for longer, more expensive vacations. “By raising your fee, you’re actually pricing yourself into a higher-bracket market.”