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In the third and final ExecConnect general session, Insight Vacations’ president Marc Kazlauskas segued away from the previous topics, “Prospecting for New Clients” and “Qualifying Clients” and spoke with travel agents about the importance of building a repeat client base.
“If you want to make sure your customers don’t go anywhere else, you have to service them,” said Kazlauskas.
Once a travel agent has put in the time (and money) to attract a client, it is imperative that he put in the subsequent effort to keep the client. While a happy repeat client can offer many benefits, including serving as a great source for referrals, the main reason an agent should pay attention to their existing clients is cost. Simply put, it costs a lot less to sell to an existing customer than it does to sell to a new one.
Insight Vacations, for example, recently set out to determine their Cost of Acquisition (how much it costs to get a new customer). The formula, which consists of dividing the cost of all marketing activities by the total number of customers, revealed that while it cost Insight Vacations an average of $500 to acquire each new customer, it only cost them about $100 to market to each existing customer.
With travel companies spending 500 percent more to attract new clients, it is particularly staggering to learn that the travel industry as a whole does not have a great customer loyalty rate. On average, the travel industry retention rate tends to hover around 30 percent, with many travel agencies having retention rates as low as 15 percent.
It goes without saying that increasing the number of returning clients will provide a direct benefit to any company’s bottom line and all members of the travel industry should constantly evaluate their retention rates and how they can do more to increase repeat business.
At its core, the matter of retaining customers is all about communicating with them. So many people spend time being reactive — answering calls and emails, responding to phone requests, researching trip data — that they forget to take the time to be proactive.
In a five-day workweek, travel agents should spend at least one day being proactive. Use the time to call clients and make appointments.
“If you aren’t communicating with your customers, someone else is,” said Kazlauskas.
Five Ways to Create Raving Fans
Say thank you: Thank your customers when they return from a trip. Every customer likes knowing that their business is appreciated and thanking them gives travel agents an easy way to stay in touch.
Call them: The travel agent who uses their clients’ past travel history to call them with future travel suggestions will have a leg up on the competition. Use vendor specials to let customers know about upcoming deals that may interest them.
Write to them: In the stacks of mail people get each day, everyone will open a handwritten card. Unless you have tens of thousands of customers, most travel agents can handwrite a card to each of their clients. Insight Vacations always gives out self-addressed postcards on fam trips and encourages travel agents to send the postcards to their clients.
Surprise your clients: Send them a box of chocolates or a little gift. The more you do above what your clients expect, the more they’ll come back to you.
Do something special: Take your top clients out to lunch, or host a wine-and-cheese night at your agency or a local restaurant.
Agents can take a cue from brands with fan bases to understand how loyalty works and how to gain repeat clients. Apple, one of the best companies when it comes to building loyalty, has built an incredible fan base for the Mac, the iPhone and the iPad. The company continues to grow its existing customer base with consumers clamoring for each new product, even though they generally tend to be priced higher than what the rest of the market is asking.
The airline industry, which created the loyalty program, boasts clients who will fly through out-of-the-way destinations and make extra stops, just so they can fly on their preferred airline and maintain their premiere status levels.
Plenty of other successful companies, including Marriott, Best Buy and Starbucks (to name a select few), also do a great job of building loyalty programs. Loyalty is such a key goal in successful business that the average U.S. household participates in 14 loyalty programs.
The good news for travel agents is that loyalty programs do not have to be as robust as those of the airlines, nor do agents have to recreate the wheel. As long as customers think they are getting something, travel agents will find increased benefits from their loyalty program.
Questions to Build a Loyalty Program
What are your objectives? Determine up front what you want to accomplish with your loyalty program. Perhaps you want to increase repeat business by 30 percent.
What are the targets?Who are you going to target to participate in your program? Perhaps try every customer who’s already booked three trips with your agency.
Will the needs of this group satisfy the needs of the customer?
What am I going to spend?Loyalty programs do not have to be expensive. An agent writing a handwritten note to every client can spend less than $500.
What will I use to reward the customer?Give the customer an incentive to book. Perhaps waive your travel agency fees, or provide free transfers for high-end clients.
What data do I need to capture?Data is the most important element in all client retention. The more you know about your client, the more opportunities you have to stay in touch with them. Furthermore, this knowledge gives travel agents insight into what rewards will work best for their clients.
Information such as previous travel history, previous travel expenditure and little nuances like birthdays, anniversaries and special dates are all must-have data points in your database. Going above and beyond and capturing clients’ likes, dislikes, hobbies, milestone celebrations and even passport expiration dates give agents a perfect opportunity to reach out to their clients. The more information you have about your customer, the easier it is to request and receive loyalty.
Rock the Boat
During the latter part of the general session, Michele Saegesser, vice president of North America/South America sales for Viking River Cruises, spoke to the panel about Viking’s challenges with client retention.
Essentially, Viking River Cruises has two sides of retention. It needs to retain customers — which is actually the easier of the two challenges — and, she added, it needs to retain travel agents and convince them to keep booking their clients with Viking.
In analyzing the best way to address these challenges, Viking River Cruises has come up with the campaign “Rock the Boat,” in order to give agents all the tools they need. Viking will even sponsor 100 percent of the cost of a travel agent-organized river cruise night for their clients, as long as the agent is willing to back up the event with a marketing plan on how to follow up with clients.In some markets they’ve been working with Hhgregg Inc. (Gregg Appliances Inc.) to bring in local chefs to host cooking classes for clients around a culinary theme that matches upcoming Viking itineraries.
Viking further offers agencies a variety of tools, including DVDs and notes, and it even prints the travel agent’s name on brochures it will send to consumers who’ve previously worked with that travel agent.
Travel agents can even take their client list to their Viking sales manager, who will update the client’s record with the most recent address and email contact, so clients can better stay in touch.
Conversion Is Key
Where Viking particularly thinks travel agents are leaving money on the table is with clients who look but don’t convert into a customer. Viking has found that the average travel agent loses 60 percent of the bookings they hold with the company.
Agents can get this conversion report from Viking, giving them the ability to go after clients who have held space, but who haven’t paid a deposit or booked.
In fact, recommends Saegesser, don’t just grab space, but close the sale. When people pay a deposit, there is a very slim chance they will cancel. Don’t be afraid to ask the clients for money.
Kazlauskas agrees and encourages agents to book on scarcity. Most flights, cruises, travel programs are booked to the max if not overbooked. It is very rare that space is going to be available when clients want it and if space is available, they’ll often pay a fortune to get it at the last minute.
Going the Extra Mile
Carol McConnell, of Around the Globe Travel in Huntington Beach, Calif., is an award-winning travel agent who’s been recognized by Travel + Leisure and Conde Nast as one of the nation’s top travel agents; she says she always goes the extra mile for her clients.
All of her clients get some kind of amenity or gift on their trip. High-end clients (those who book as little as $10,000 to $20,000 in travel services) will usually get a free limo ride to the airport. But even clients booking less than $10,000 will receive some recognition — perhaps an onboard credit, for example — as a thank you for their business.
McConnell recommends that you do something special for your clients and give them more than you expect. If you do that one thing they remember you for, they will keep coming back.
Furthermore, McConnell always sends a thank you note, in which she offers a discount on the next trip the client books with her.
Communicating With Clients
McConnell’s communication with her clients is the very root of her success says Kazlauskas, who says that the best marketers know that you must reach out to your clients more than once or twice a month. In fact, he says, you can never over-communicate with your customers.
Grand Circle Travel is a good example of a great communication program though agents are often frustrated by just how much information they receive from GCT. The company’s repeat customer base sits somewhere at 65 percent, indicating that there must be some truth to the fact that you cannot communicate too much with clients.
If you take away one thing from the entire session, Kazlauskas urges agents to remember to constantly communicate with their customers.
Download a PDF version of Building a Repeat Client Base now.
Read information from the first general session, Prospecting for New Business now.
Read information from the second general session, Qualifying Your Clients now.
“If we don’t take care of our customers, someone else will.”— Unknown
“Being on par in terms of price and quality only gets you into the game. Service wins the game.”— Tony Alessandra
Kazlauskas staged a brief poll of the room, and found that a vast majority of the travel agents present do charge a travel agent fee.
When he asked how agents explain a new fee to existing customers who never paid the fee before, agents say they let clients know they will do their best to plan a vacation that is 100 percent customized to their clients’ needs.
When explaining fees, Kazlauskas says there are two things to remember: Be dead honest about why you are charging the fee and don’t be impish or apologetic for charging the fee.
As with most things, there is a perceived value to something when you have to pay for it. A client’s perception is that if the agent is charging, he must be brilliant.