Anatomy of a Host: 7 Tips for Working With ICs

What does it take for a travel agency to host independent contractors successfully?

Michelle Duncan, president and CEO of Centreville, Va.-based Odyssey Travel, has some answers. Duncan established her primarily leisure agency in 1997. Today she works with 21 independent contractors (ICs) located throughout the country.

She believes the host model is a win-win for the host and its ICs, but that doesn’t mean it’s easy to set up and operate a successful host agency.

For one thing, “you cannot tell ICs what to do,” Duncan said. “But you can empower and incent them.”

Duncan, a member of NEST and The Affluent Traveler Collection, shared her tips for running a host agency with Travel Market Report.

#1. Motivate
Duncan has designed her agency’s commission structure as a motivator for independent contractors.

She used to offer ICs a 60/40 commission split, with 60% going to ICs and 40% to Odyssey. But after 9/11, Duncan instituted a sliding scale in part to acknowledge the commitment of the ICs who stayed with her.

She also wanted to see if the new commission structure would be “a tool for motivation.”

Odyssey Travel now starts ICs at an 80/20 commission split with the potential for a larger share based on volume.

ICs who bring in $50,000 to $75,000 a year in gross sales earn 85% commission and those with more than $150,000 a year in sales retain 90% of commissions. The higher commission levels take effect when an agent reaches a sales goal and stay in effect for a year.

In her former career in broadcast sales, Duncan always worked on commission so she’s comfortable with that model. “I couldn’t be complacent because I was in control of what I made.

“I wouldn’t have it any other way,” she said of her commission-based earnings model for ICs.

#2. Offer additional incentives
Duncan also offers bonus pay as an incentive.

She pays an extra 5% bonus when an IC does a certain amount of gross sales per month. “That could be doing a minimum of six or seven bookings equating to $10,000 to $15,000,” she said.

As additional incentives she often awards trips she has won to her ICs, whom Duncan encourages to go on fams and inaugural cruise sailings.

She recently won a two-week Silversea cruise and turned that into an incentive: The IC who makes the most new bookings between now and August will accompany her on the cruise.

#3. Take care of business
Duncan calls the multiple facets of operating a travel business the “administrivia.” But there’s nothing trivial about recording commissions properly, issuing commission checks to ICs in a timely manner, seeing to document mailings, and taking care of other daily workings of an office.

Such details are often at the heart of why an IC chooses to affiliate with a particular host agency, Duncan said. Accomplishing them successfully is a key to the host-IC relationship, she added.

Many Odyssey Travel ICs who have gone off on their own only to return to the host agency came back “because they didn’t want to deal with the administrivia,” Duncan said.

#4. Have their back
“Knowing that someone has your back and, if you need help, they’re there,” goes a long way to cementing good agency-IC relationships, said Duncan.

“If an IC has an issue with a supplier, I can intercede on their behalf to help them to a positive resolution,” she said.

Duncan also helps ICs set up client groups, including by sending out initial promotional flyers to their groups, mailing documents directly to ICs’ clients, and being “at the ready” to assist with guidance or online training.

#5. Encourage training
“I tell them [ICs] if they are serious about the travel business and if they want to be taken seriously, they need to invest in themselves,” Duncan said.

Training also helps ICs boost their confidence, she added.
 
Duncan recommends that ICs earn certifications from various industry accreditation programs. They should also meet with suppliers one-on-one to build those relationships.

Attending industry conferences too, is key, said Duncan, who brought seven of her ICs to the recent Travel Marketplace 2014 in Boca Raton, Fla. (Duncan spoke on a panel at the conference about how to be a successful host agency.)

“I want them to go, experience, network, meet suppliers one-on-one,” Duncan said. “I want them to feel confident in their own abilities.”

#6. Communicate
Duncan has “sit-downs” with her ICs every few months, although the “sit-down” might be a phone call, a Skype call or an email, given that many ICs are out of state. When possible Duncan will hold these meetings at industry conferences she attends with her ICs.

“Where do you see yourself [in your business]?” she asks them. “Do you want me to talk with you more – or less? How much training do you need?

“If they want me to help them, they have to engage with me as the host.”

For her part, Duncan said, “I have to be involved; I can’t sit back and let it fly. These ICs are working for your company. They’re an extension of your company.”

#7. Make it personal
“The whole business model of Odyssey is strictly built on the idea of family,” said Duncan. “We’re a professional family, a community, and we’re here to help each other.

“I am their [ICs] backbone if they need me,” she said, adding that it takes patience to succeed as an IC. “It takes time to build a client list and get yourself established.”

Duncan also believes in old school values and ways of doing business. “Never forget to send that thank you note [to clients] and always follow up with them.”

And with her ICs? “First and foremost, treat people like they wanted to be treated – with respect,” she said. “You can’t go wrong if you do that.”