Latest / Travel Agency in a Year / Day 278: How Big Businesses Practice Client Appreciation and the Numbers Behind It
Transcript
- Rachel: Welcome to the Travel Agency in a Year podcast. I'm your host, Rachel Gay, travel agency owner helping you all get well past the six figures in annual commissions. Let's do multiple six figures, maybe seven, maybe eight. Anyway, if you have any questions on how I can help you, head over to elevate with rachelk.com. Otherwise, stick around for this free podcast for Travel Advisors Building a Business. Today is day 278. And we are expanding upon the three. Let me look at my notes. It's either three or four-part series of client appreciation. This is the end of the series, My Lonely Friend, the End. So how big how do big businesses practice client appreciation and the numbers that are behind it? Yesterday we covered the theory of client appreciation. The day prior, day 276, we talked about just general ideas outside of like branded magnets or calendars or things things like that. Today we're gonna look at real well-documented examples of large businesses practicing the same client appreciation. And if there are very large companies doing client appreciation, there's no reason you don't like you shouldn't. You know what I mean? You don't have to, but it's not not gonna work. Anyway, and we're gonna do that, like client appreciation at scale, along with the actual numbers behind these businesses programs. Starbucks. Starbucks rewards is one of the most studied loyalty and appreciation programs in retail. This is why I'm a fan of like, if you can as a travel advisor, develop a reward/slash loyalty program. So recent figures put active membership at around 35 million people in the US alone, which is roughly 10%. One in ten of us is a Starbucks rewards member. Loyalty members reportedly account for roughly 60% of their operating revenue. In the United States, which is a striking figure given that these members represent just a small fraction of Starbucks' total customer base. So rewards members are also reported to spend two and a half to three times more. Like I went on my crazy rant about Cole's credit cards. If you didn't listen to, I think it was yesterday's episode, maybe it was two days, it was yesterday's episode. And I was like, I couldn't believe it. Like, that's why the credit cards, the loyalty programs, the rewards programs all exist. anyway, rewards members are spending two and a half to three times more, and they visit more frequently than any non-members, which is why they make up 60% of the operating revenue for the entire company in the United States. And this underlying mechanism is worth noting for y'all, and I want you to consider how you can implement this in your travel agency. Starbucks Rewards isn't purely just a discount program. It combines tangible rewards with recognition, free items on birthdays, early access to seasonal products like the pumpkin spice latte, and a point system that builds a real sense of ongoing relationship rather than a single isolated transaction. Yeah. The combination of the tangible value and the genuine recognition mirrors exactly the personal touch conversation we had a few episodes back. I think it was day two seventy-six. and I'll talk about my old cleaning business rewards program that I had for that as well. an another service-based business by the way. So I hope all of this gives you some inspiration if you want to build like a rewards or loyalty program based on booking with you as a travel agent rather than sending personalized gifts. Okay. Sephora. Sephora's Beauty Insider program. That was launched nearly 20 years ago. It's grown to tens of millions of members. Again, about one in every 10 to 15 people you know. I'm a beauty insider. I don't even buy makeup. But I was like, okay. But that's widely reported to drive roughly eighty percent of Sephora's total sales. Beauty Insider members are reported to spend approximately three times more, boom, there's a recurring theme here, than non-members on average. And the program's tiered structure, the insider, the VIB, and the top rouge tier create like an aspirational sense of status and recognition that goes well beyond simple points for discounts exchange. And I've seen travel advisors, very successful travel advisors, implement a very similar loyalty program where they have tiered structures based on how much travel you book with them, you get more perks, insider discounts, insider info. this is typically great a great strategy for travel advisors that want to hold group space, like on a cruise ship. And you could send out the second you hold group space your top tier people and you can offer depending on the cruise line maybe an additional onboard credit for them or you could offer some kind of amenity that you purchase for them because they are repeat loyal clients. But imagine the three times more. Okay? So in Know Your Numbers and the 2X rule episode, Know Your Numbers is a free resource I have. If you're on your the if you are on YouTube, you can just click the link for know your numbers if you're listening to this on Spotify or any other podcasting platform. you just head to elevate with rachelk.com click on free resources at the very bottom of the homepage and know your numbers is one of the free resources you can grab. So Minimum goal is 2x two trips two times for your clients because you want to build that lifetime loyalty because as it demonstrates loyal clients and customers regardless of industry typically spend two and a half to three times more. If you can get your clients, let's say their booking value on one trip is five thousand dollars, not your commission. But it's just five thousand dollars. So it's gonna be I don't know how to do math. Let's see, maybe like a six hundred and fifty dollar commission, something like that. Or no, seven fifty, seven hundred and fifty dollar commission if you're around fifteen percent. That's your gross, by the way. but they booked two trips. Now that one person without even referring you has doubled their value to ten thousand dollars in bookings at a minimum because you can nurture them to make higher investment trips down the road. And now it's a fifteen hundred dollar commission. And if you can get three X, that one client now becomes one thousand two hundred and fifty dollars in commission. over time. And that would be the minimum if they just spent the exact same amount of money on every single trip. They tend to spend more and more as they grow with you because they grow in trust with you. And I don't know where I went on that with that tangent, but I just started like going off on that tangent. But imagine instead of having ten new clients that book once with you and you make seventy five hundred dollars, you have ten new clients that book three times with you, now you've made twelve thousand five hundred dollars. And imagine further if they referred you and so you got another fifty percent increase. So now you have fifteen clients. From their referrals, and those five people book two trips with you. Just we're just gonna keep it simple. Or no, we'll do three trips, three trips with you. So that equates to five six thousand two hundred and fifty dollars. So now you've got eighteen thousand dollars in revenue coming in versus just never showing loyal like that you appreciate your clients, and you get that one seven hundred and fifty dollar commission. That's a huge difference. $750 versus $18,500, I think, $18,250. I'm doing the math in my head, folks. Correct me in the comments. Anyway One especially relevant detail from the Sephora program is that their birthday gift benefit is frequently cited as one of the most highly rated perks by members, despite costing the company relatively little to provide. Like a clear example of just like a low-cost, high perceived value gesture, that same principle that we discussed back on day two seventy-six of the podcast. So I do this in my own travel agency. I send, you know, the Templated birthday email, happy birthday, a gift from you to us. And my deal is, and you can steal it, I don't care. If they deposit on a trip within 60 days of their birthday, we throw in an additional amenity value up to $200. The trips that I'm getting booked from this incentive alone, sometimes it's just like couples trips. But it's still a five thousand dollar trip ish for that. And sometimes I've gotten people that are like, okay, well, we want to do a small group girls trip. And so that's like three rooms. and that could be like a seven to ten thousand dollar booking, right? So just sending that little friendly reminder can help you get more bookings. And yes, it I offer a more expensive incentive to book. But I also since I've implemented that, not only are these people coming back and booking trips with me at a higher rate, they're also referring me. Just something to consider. Alright, neither of these programs are built primarily around simple discounting. Both combine genuine recognition. For birthdays, for milestones, exclusive early access with tangible value, they create a tiered structure that makes the long-term loyal clients feel meaningfully different than a first-time customer. Not just accumulated points in a generic system. So this is translatable to your tiered service packages. And appreciation and status can be built directly into the structure of your business, not just handled as like a separate occasional gesture. Now, I know you've been dying to hear about my referral program in my cleaning business. This actually was okay, so I started my cleaning business in the early 2010s. And I was only marketing on like thumbtack. That was back when thumbtack was like still reasonable to find leads. Otherwise I was doing strictly r word of mouth. And this was one of the tactics that I employed and I remember telling my mom, like, hey, I have this idea, I think I'm gonna offer this. And she was like, Well, you're just gonna lose money, you already priced it, the bit-b-b. And I was like, First of all, you don't know my profit margins. Secondly, you've never even attempted to go out on your own and run a business. So I'm not gonna listen to you. And I did it anyway. So what I would do was year-round, I would offer ten percent off for referrals of their next cleaning. And they could save their referral discounts, and I allowed them to save all ten of them up, and then they Could redeem them for one free cleaning, but it was like at the same value what they were currently paying. The holidays, I implemented a 20% referral discount. And it would start October 1st and it would run through December 15th, I believe. I think it was just December 15th. And if their referrals booked their first cleaning and paid for their first cleaning by December 15th. Then they would get twenty percent for that one referral. And so with the holidays, with Christmas spending budgets and things like that, there wasn't really like any other genuine recognition involved. But we also left handwritten thank you notes after every cleaning. but You know, Christmas is around the corner. You gotta buy gifts. You gotta buy the Thanksgiving dinner, the Christmas dinner, whatever. However, you celebrate your holidays, you're spending a little bit more money around that time of year. And so that was my way to give back to my clients. Like you can save your referrals up for the holidays. And it got to the point where A, I would the first year I like tripled or quadrupled. It was a ridiculous amount of like blowing up growth. And by the first year, I mean I opened my doors in August of 20 I can't remember. 2010. I don't know. It wasn't 2010. But I opened my doors for my business in August and I implemented this referral program right away, the 10%. October 1st I did 20%. And I already had to start hiring people for the holiday season that year. Because it was just crazy the amount of referrals we got. Plus, I was doing Other like I was doing the thumbtack leads and it was insane. So I started onboarding employees. that holiday season and it would just like 2x or 3x my client base because everyone loved the idea of saving that much money for the holidays and they could apply that 20% discount they could they would save them all up for a free cleaning or the value of a free cleaning and then right before they were hosting a holiday they'd be like can I add this service? Like I need my oven cleaned and my fridge cleaned out we're about to have a bunch of people here for the holidays. I'll pay You for the regular cleaning, but can you do a little extra deep cleaning because of these five referrals? So I allowed them to customize it based on their needs. Anyway, you don't need like a formal point system, you don't need to have a special travel agency points card or an app or millions of members to apply the underlying lesson here. The principle is what matters like. The most is combining like genuine and personal recognition with real tangible value and create some sense that loyal long-term clients experience something meaningfully different than the first-time inquiry. And it's totally achievable at any scale. It can be a fantastic way to grow your business. not just in terms like if you do a referral program, that's a great way to build your client base up. If you do a loyalty program, that's an amazing way to nurture your clients to invest in more customized and curated experiences and grow with you. just make sure that you are using like specific relationship-based ideas. You can pull them from episode 276, and they're applied consistently rather than occasionally. Make it even Stevens. Okay. Recap. Starbucks and Sephora. I could go on sidebar also. Costco was originally for business owners, but they expanded it to go out to anybody. And just having that card and then they give you like the black card or something for like higher tiered memberships. I mean, think about the different tiered memberships that are available to you with any business, service-based, retail-based, whatever. Like I'm sure you could even go like you could think about a mechanic or like a tire shop, and you can join their membership and get discounts on like oil. changes or furnace filter changes. Is it a furnace air filter changes or like discount on your next car wash. Those drive-thru car washes you pay for that membership. After so many car washes you get the eleven like 10 car wishes, you get the 11th one free. This is not some crazy foreign concept and you can totally apply it to your travel agency. These old drive A striking share of the total revenue through their member programs, okay? And the members spend significantly more than non-members because people like to be part of a membership of a club, and it's built on a combination of genuine recognition and tangible value, not just simple discounting. So if you apply the underlying principle at your own scale. Recognition plus real value consistently delivered rather than trying to copy the very specific mechanics of a large loyalty program. It's definitely an option for you to consider. And you can save this and come back to it when you're doing your quarterly review and then As you spend the last quarter of the year, if you're like, okay, I really want to implement this for my next year's launch. At your annual review is when you could finalize the kinks, working the kinks out of program, and checking your landing pages, whatever it is you need to do. So tomorrow we're gonna shift outward. And how can a travel advisor get genuinely involved with their local community? Ugh, giving back. This was day 278. of the Travel Agency in a Year podcast. Have a wonderful day.