ESCAPE THE RACE TO THE BOTTOM
A Business-Development Audio Program By Mike Marchev
This has been a concern in the travel agency business for years. How to become fairly compensated for the work and effort invested in a client’s travel plans. At one point, early in the system, suppliers paid a commission commensurate with the associated effort. At the time, it was enough to sustain a profitable entity. This is not the case anymore.
Commissions have been cut and agents must rely on a fee schedule if they are to stay in business. But historical practices are difficult to break, or amend to some degree. Competition and apparent Internet savvy has forced agents to play the discount game, or worse yet, provide their services for free.
Make no mistake about it. You are not going to alter your pricing policy because I tell you do do so. I would never assume that my advice would be so blindly adhered to. But I am betting on the fact that if you listen to this program your thinking on the subject will be significantly altered and you will finally see the folly in your ways if you insist on following your current path to riches.
What you are about to hear is my opinion based on my experience in business for the past 30 years. If you have a better way, by all means take it. All I am asking is that you listen to tis program with an open mind and take into consideration the salient points I will soon be bringing to your attention.
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Your presenter today is Mike Marchev who has over 30 years of practical experience in the travel industry. Where he has been and what he has accomplished over the years is of very little interest to you. Today’s program is all about you and your future. It is all about avoiding the trap of playing “me-too” only cheaper.
If you must know, Mike is a popular speaker at major industry events and his articles are currently published in Travel Research Online, ASTA Briefs, The Travel Institute and other industry periodicals. His is asked to speak to sales teams outside the travel industry which provides him with an opportunity to share his research with proactive travel professionals thereby learning from other’s experiences.
Mike has earned the CTC designation and has a Masters Degree In Marketing.
Escape The Race To The Bottom
by Mike Marchev
Try listening to the audio without interruption. Then, read the line items below to help cement your new knowledge.
1. Competing today on price alone is a poor business plan for the small or home-based entrepreneur.
2. To many listening to this program reducing your fee or working for “free” may sound like today’s “cost of doing business. ” There is another way … and it is a better way.
3. You are not running a charity. Run your business like it is a business.
4. Yesterday’s travel model was commission-based. Today there are no rules.
5. The thought of being compensated for one’s work remains foreign to many travel professionals.
6. “Worth Every Penny” is a must read for those of you wanting to remain in the travel business. By Erin Verbeck and Sarah Petty. It focuses on the “boutique” establishment, or one on one selling relationships. If interested, you can order your copy on Amazon right here. CLICK HERE. I suggest you do.
7. My background originated in a highly competitive electronics field. I know about price-sensitive negotiations. Don’t get caught up in the landslide.
8. A salesperson who has “skin” in the game makes the difference. “YOU” are the value added contributor.
9. Rebating was once considered to be taboo. The fee-based income model is now the way to go.
10. Travel agents are just like professional speakers when it comes to lowering their fees. They are too quick to do so to land the “gig.”
11. You can do the job a lot better than an amateur. That is if you are better than the amateur. I hope you are better than the amateur. (Practice? Study? Read? Research? Network? Create? Deliver?)
12. Clients know their options. You are just one of them. You must “prove” that you are the best choice. Are you the best choice?
“When the student is ready the teacher appears.”
13. Your wrong choice can cost you dearly. Tune in! Make the right choice.
14. The primary reason why agents don’t hold fast to their fees, or choose not to charge any fee at all, is because they are not sure of the value they are providing. They are lacking in self-confidence. If not doing so already, start believing in yourself and your contributions.
15. You must start “romancing” your prospects and clients. You must place them up on a pedestal and act accordingly. Just like your first high school crush, there is no limit to what you will do to capture and maintain the attention of your target. (Short of breaking the law and prostituting yourself.)
16. It begins with your personal branding. All of your materials must look and sound like YOU.
17. First impressions are important. Last impressions are lasting. Think about it. Don’t get too comfortable and let your guard down.
18. Your “Special Sauce” is your unique selling proposition. (USP)
19. You would be wise to consider the services of a professional graphic artist.(Check out mine: Roselani Aluli-James. 815-520-4558 Tell her I sent you.
20. Think twice before using clip art in your professional marketing materials. (Make that three times.)
21. Think about becoming a curator — you decide who needs to know what when it comes to travel information. You become the person in the know.
22. Find time to list your strengths. Ask your good clients.
23. Create a 5-Reason One Sheet. Check out mine and let your imagination take over.
24. Another important document is a sheet with four or five client testimonials. What others say about you holds more water than what you personally have to report. (Trip Advisor clearly exhibits this phenomenon.)
25. It is always a good idea to share your industry knowledge in a well-written article authored by you.
26. Distribute you marketing materials every chance you get.
27. “Selling is a contact sport.” Get prospects and clients to come to you. This places you in control, which is not a bad thing.
28. The “Secret Sauce” is spelled QUESTIONS. You arrive at all meetings prepared.
29. You must be confident enough in your future to walk away from deals that do not feel right.
“You will always meet somebody who is willing to go out of business faster than you.”
30. A few questions:
- What does your ideal vacation look like?
- On your last vacation, what would you have done differently?
- If money was no issue, where would you like to visit?
- How important is food to you as far as restaurant and local cuisine?
- What physical activities do you enjoy while on vacation?
- Are you a beach person or a pool person? Do you frequent museums?
- What do you expect me to contribute to your vacation experience?
31. Work hard at becoming “gush-worthy.” Your mission is to serve your clients to the degree that they can’t wait to share your incredible service with their friends.
32. Think about creating a coffee table photo album. Or some other momento which will remind your clients just how good and thorough you are.
33. When requested to lower your fee, look your client in the eye and say “I don’t blame you for asking but I can’t do that. And here are three reasons why.” You won’t need more than three. Two will suffice.
34. You are bound to hear this:
- My current agent does not charge a fee. Why do you?
- You never charged me before. Why all of a sudden now?
- I can book this myself on the Internet.
“Unlike most travel agents, I cannot afford to furnish all of the services I do for my clients for free.”
35. Once a year, ask yourself these questions:
- Are you under priced?
- Are you being fairly compensated?
- What are your qualifications, and do these qualifications warrant a higher fee?
Bottom line: Can I improve my client’s vacation? How? And at what fair compensation.
36. You must take care of yourself before you can help others. In business this means maintaining profitability.
37. 5-Step Selling Process
- Spend more time with your clients
- Making sure you deliver what is expected
- Ask regularly how you can improve each step?
- Respond as if they are your first date
- Be prepared to lose a few of your clients
38. Don’t get lost in the numbers. Bring the one-to-one relationship back into play.
39. Remember the Marketing Slug-Bug Game. Focus on what is going on around you and you will begin to spot business opportunities everywhere.
40. I invite your feedback. firstname.lastname@example.org
THANK YOU FOR LISTENING
(A Special Thanks To Stuart Cohen)
An article by Mark Hunter on the subject:
Why Discounting Your Price is a Bad Idea
By Mark Hunter
The customer is not refusing your price because it’s too high. They’re refusing it because the value is too low.
The real reason you had to cut your price is because you failed to match the value you offer to the outcome the customer was desiring.
I just bought a new suitcase and I paid 5 times more than a similar suitcase. Go ahead and say I paid too much, because I know that’s what you’re thinking. Truth be told, I would have paid even more. Now you’re thinking I’m stupid.
I paid more because of what I expect out of a suitcase and the demands I place on it due the number of flights I take.
You see, to me the price was not the issue, but the outcome I was looking for. Too many times we can be far too quick to assume the only reason the sale has not closed is due to our price being too high. We think it’s too high because either we fail to believe what we can deliver or we think it’s too high because the customer said so. Either way, it comes down to a lack of knowledge.
We cannot become fixated on what we sell, because what we sell is irrelevant. We need to focus our time on the outcome or the benefit the customer will receive. All of our conversations with the customer need to be focused on understanding the outcome.
Many times this is difficult because the customer has not even thought through the outcome they want. When the customer hasn’t thought through what they need, they will nearly 100% of the time focus on price.
Your job is not to communicate price, as the customer who buys on price will leave you on price. Low price is not a sustainable competitive advantage! When the customer is making their decision on price, you must accept that as a failure on your part to communicate properly with the customer to allow the expected outcomes to become clear.
Ask yourself, “How many questions do I ask that get the customer talking about their outcomes?” How do you position value? Make it your goal to never communicate price until you understand fully the needs of the customer and the outcomes they’re looking for.
If you can’t articulate your value package in a manner that addresses their outcomes, you’ll never be able to sell without a discount.
Discounting your price is nothing more than giving away your profit. See how long your business lasts once you get in the mode of discounting. You may generate volume short-term, but once the discounting has begun there is little way to stop the slide from becoming an avalanche.
Click below to download Mike’s audio to your desktop for future listening.