This graph shows where an agency made its income just 10 years ago. Income was predominately air commission-based, plus much of other income was “French fries with that hamburger,” and really an extension of the air booking.

As an industry we had these income sources for good reason. Up to 1996, every year air commissions paid to agencies through ARC had risen until they peaked in 1996 at $640 million dollars! As an industry, we identified an opportunity and pursued that opportunity adopting the systems needed to be successful.

Of course, those systems were GDS tools. These GDS tools were (and are) great airline commission processing tools. Agents become very proficient with these systems and the ability to generate and process airline related transactions. In fact, back in 1996 we had a single input world – whatever an agent did went through the GDS and from there to the agency’s processing systems.

Data was also treated differently in 1996. Basically we “processed” things. We got very good at processing ARC reports, transactions, agent payables, etc., as back then the focus was on processing to get the data in, process it, and be done with it. Having invoices pointing to sales reps (rather than the client) and passive segments with very limited information were fine -- they supported our processing culture.

But as you know, our world has changed since 1996.

This graph shows where the average leisure agency makes its income from today. 71% is cruise/tour, and air has shifted from the vast majority, to well under 10% of total income (and for many agencies is 0% of income.)

The change - in my opinion – is the result of not just one, but two influences. The first is with the drop of airline commission through ARC to zero, in just 5 years we had to change. But the other is the fact that today there is $48.3 BILLION off-line leisure spend in North America. These are the folks that with all the options and information out there, need the service of a professional travel agent more so then ever – and are more than willing to pay for it!

Of course the systems changed from the airline commission dependent days where our systems were processing-based. Today travel consumers want us to know their likes and dislikes, to know them and earn their trust, to know where they want to go, when they want to go, and what they want to do. Even basic things like what to call them, where to call them, and when to call them are important in this CRM world where our relationships with clients and the ability to influence their travel purchase are the keys to our success.

Today, data comes from a myriad of sources: web sites, business cards, prior travel, extranets, multiple web-based shopping and reservation sites – in fact from an unlimited number of sources.

Change, But Relatively Minor

The funny thing in this new world is that there really is no change in what agents do, only a simple change in the system that they do it in.

In the past when an agent talked with a client about a specific trip they would grab a note pad and take notes, “interested in Hawaii, traveling with kids Haley, Nikki and Tyler; anniversary is March 3, want resort, two adjoining rooms…. Sent to site www……

Then folks typically would use the “yellow sticky pad” reminder system and note to call them back Friday to follow through.

In today’s new world, it is basically the same job and information flowing, just a change in the system. Nowadays that same agent, rather than grabbing a pad of paper, would click in ClientBase and identify the client. Next with two clicks they would start an electronic reservation card where they would type the same notes.

At conclusion, this “new world” agent would create a reminder in their contact manager to follow through Friday and if they were really good, may even take a second to update the client profile with kids names and ages, destination preference of Hawaii, anniversary date, and other information gleaned during the conversation.

By using today’s CRM system, the agent is doing no additional work, just doing it better in a new system. And with this new system, the agency now can track things like inquiries, inquiries by date, agent, promotion, etc. They can run reports on close ratios by agent, promotion, destination, supplier, etc. And marketing information is created for future marketing and sales – giving the agency the ability to develop a long term relationship as the travel arranger for this client.

Expectations

We teach agents to not necessarily track close ratios by promotions, but rather by campaign and client. We regularly see agencies’ close ratios defined as a client buying one or more trips of over $1,000 over a 12 month time period – of well over 60%. This creates a value for which the suppliers are more than willing to pay for. 60% close ratios come only after establishing relationships with our clients and having the systems in place to leverage those relationships.

It is fun being on the cutting edge with technology as agents migrate to new CRM based systems. If we at TRAMS can be of help in any way, please let us know.

Thanks for reading.
-Lee