Clients Are Back: It’s Time to Charge Fees

There may never be a better time than now to train consumers to pay for travel agents’ expertise, according to Peter Sheahan, chief executive officer of ChangeLabs.

“People are flocking back to agents like the prodigal son,” said Sheahan. “You trained them [before] to shop on price, so train them now to pay for your expertise.”

Sheahan, who spoke during Ensemble Travel Group’s recent International Conference in Colorado Springs, presented insights from an 18-month ChangeLabs and Ensemble research project. The project was aimed at drawing lessons on business success from the consortium’s top-performing agencies.

ChangeLab’s research included interviews with agency owners, managers and leading agents at 12 U.S. and 12 Canadian top-performing Ensemble agencies as well as on-site visits to three U.S. and three Canadian agencies. Supplier partners and third-party travel industry figures also were interviewed.

Beyond the travel industry
ChangeLabs designs large scale behavior change programs for a range of companies. It combined its research on Ensemble with its study of best practices from more than 35 successful companies, including Home Depot, SAP and Adobe.

“The travel industry is not the only one dealing with change,” Sheahan told Ensemble members. “In businesses that are doing well, we found they got their timing right.”

With travel in the midst of transformation, this is the time for agents to change.

Timing was a challenge for agents when airline commissions were being chipped away over time, rather than all at once, Sheahan suggested. “It hurt, but it didn’t hurt enough,” he said, adding, “Change is really slow, until it’s not.”

Selling ‘generic’ product
In its Ensemble research, the firm found that the lowest-performing agencies were those selling “generic product to anyone who walked in the door,” said Sheahan.

“It’s not that working on volume is bad, but the margins get smaller,” he said. “It’s super important that you get clear on where you want to play.

“Compete on expertise, not on product. If you go from one agency to another you can generally get the same product,” he said.

“The product is not your point of differentiation. Make the insight you offer, the value; not the product. And now is the time to do it.”

Intimacy rules
Also key to agents’ success are the relationships they forge with clients, Sheahan said.

“Intimacy wins,” he said. “Whoever owns the relationship with the customer wins.”

That is especially important in times of transformation for any industry. “What’s the one advantage you have [as agents]?” he asked. “It’s that direct relationship with the client.

“It’s about a lifetime relationship versus a transaction,” Sheahan said. “It shouldn’t be about creating the experience of a lifetime [for a client], but about creating a lifetime of experiences.”

Recipe for success
Sheahan noted commonalities among highest-performing Ensemble agencies.

He said these businesses aligned several factors, including business model, product mix (concentrating on “the preferred of the preferred”), marketing and customer selection.

Customer selection is important, he emphasized. “You can’t allow people who don’t meet your [customer] profile to waste your time.”