Insurance agents call it their “Renewal Rate.” Banks use
the term “Repeat Customer.” Pretty much every business has
a name for it – except historically Travel Agencies and Travel
Agents. The idea is what percent of your clients that booked
a trip with you last year, have or will book a trip with you
this year?
Surprisingly, many agencies do not know their “Repeat Business Rate.” To me that is a very, very important number. Fact is your Repeat Business Rate has a direct correlation on the success of your business.
Lisa Bauer, Executive Vice President of Royal Caribbean International,
quotes that only 20% of consumers booking through agents use
that same agent for their next trip. Yes, a Repeat Business
rate of only 20% and meaning 80% of last year’s agency business
does not come back this year – this is a very challenging
and difficult way to build a business.
We have done analysis and while the rate we see is not as
low as 20%, we do see an average of closer to 32%, which,
frankly, leaves a lot of room for improvement!
The interesting part is that when questioned the reason for
consumers NOT coming back to travel agencies is not service-based
– test after test shows service satisfaction is very high
with only a few exceptions. Neither is the cause price – and
reality is that the price is not higher by booking through
a travel agent.
So if the low Repeat Business Rate is neither service nor price-based, then the question becomes what is the cause for such a low average industry rate? Especially when it is such a large determiner of agency success.
The answer is really basic. Most agencies have not aligned
themselves to insure that good marketing programs are driving
those past clients back to the agency – to then book the next
trip. Fact is, we cannot wait around for last year’s clients
to come back to us to ask us about this year’s trip. There
are just too many influences, too many options, and too many
good marketing companies that will take our business if we
do not actively and aggressively pursue it.
The good news is today there are great opportunities for marketing
programs leveraging supplier relationships, and providing
you with professional marketing programs. Imagine for $20
a month having a better, more professional, more organized,
and better reporting marketing program than any major online
player (Orbitz, Expedia, etc.) and all with your personal
touch.
It works. We see agencies regularly with “Repeat Business Rates” or 80% and more – those that are doing the professional marketing and follow through.
Is this a push towards agencies doing a better job of marketing? Absolutely. In fact I believe the single biggest evolution that we are in the middle of is agencies having successful marketing programs.
At TRAMS we offer TMA – TRAMS Marketing Alliance – as your marketing solution. If we can be of help, let us know and we are happy to discuss your marketing program and what can drive your “Repeat Business Rate” dramatically higher.
Thanks for reading.
Lee |
