Latest / Travel Agency in a Year / Day 198: Do you have real travel service packages, or just making up numbers on the spot?
Transcript
- Rachel: It's day 198 of the Travel Agency in a Year podcast. Welcome back. I'm your host Rachel K. with Elevate with Rachel K. If you got questions, go to elevatewithrachelk.com. Check out how I can help you as a travel advisor. And it's kind of a dreary days I'm doing this batch recording. So it's fine. It is what it is if you're watching this on YouTube. Here's a question I got for you. and I feel like I need to accessorize sound effects with a pen. and I want you to actually sit with it before you answer it. This is for travel advisors who charge fees. Please, if you don't charge fees, you can still listen to this episode. There's some insights here for you. ⁓ But this is specifically for fees. The lead asks you right now what your planning fee is. Would you quote them a consistent number? Or would you land on a rando number in the moment based on your gut feelings about how much work it seems like it would be for their trip? Or honestly how much you think they can afford if it's the latter, you're not alone, and today's episode's for you. So, ⁓ the problem with making up numbers every single time. There is a problem with that. You can have your fees starting at, depending on the complexity of the trip, right? I have a fee schedule on my travel agency website and it says fees starting at, but I've always had, ⁓ five or six years now, service packages. And that's what we're gonna be talking about the next few days. When your pricing is shifting from one client to the next with no real structure behind it, two things happen. First, you're mentally re-deciding your worth every single time you get a lead on a consultation call, which is exhausting and it's inconsistent. Secondly, and this is the part that can actually cost you closing those bookings. Your lead has no way to understand what they're paying for. A number with no structure behind it can feel just like a fee, like nothing, no value to it. A number attached to a clearly defined package feels like a decision they understand they can say yes to. So, I want you to think about the last time you bought software for your business. Gosh, I've talked about this so many different times. Almost every, I call it SaaS, company, software as a service, S-A-A-S, that you've ever paid for, like Slack or Doby, maybe your CRM or just your email CRM, whatever, they present their pricing in tiers. There's like the basic, the standard, and the premium. Or there's like the growth. I mean, sorry, starter, which can be as low as free, the growth and the pro, right? Like you've seen these things on websites and you're like, ⁓ I really am interested in the software. And then you can toggle the yearly or monthly, but we're not doing that here. You didn't get a phone call, you didn't call into a call center with them and someone quoted you a number based on the vibes of the call. You saw exactly what each tier included. You got to compare them, they were right next to each other, and you got to pick the one that matched what you needed. That clarity is not an accident. It's a deliberate structure, and you can borrow this for your own travel agency. So, let's talk about citing some sources. Okay, to back this up, I don't want you to just take my word for it, okay? I did this, it works so well. I did this for Destination Weddings and Group Travel Management. I have Classic, Premium and Elite, sorry, Classic, Premier and Elite packages. And they all have, they build upon each other. And I put this together at like 2020 or 2021. I think it's 2020 on my own. I don't remember. But I knew before I like fully launched my planning stuff that I wanted these packages. And then I was like mentoring people about it for years. And then last year, the sweet spot to success, I teach this in here. It's like one of like, it's anyway, there is a behavioral economist. I don't know how to say his last name. Dan Arioli, ⁓ like Ariel Y. If you want to Google him, I don't know how pronounce that. That's fine. I don't know him personally. And he did this while he was like working for MIT or something. In an experiment involving subscriptions to The Economist, he tested three pricing options, three is a magic number people, a lower priced digital only plan, the higher priced print only plan, and then the combined print and digital plan. set at that same higher price. When all three options were shown together, the vast majority of the people chose the combined plan because next to the other two options, it was like an obvious and easy decision. When the middle option was removed and people were only shown two choices, far more of them chose the digital only plan instead because they're like, BFD, I don't want digital and print. You know what I mean? I would have done that. But nothing about the actual value changed. It was how they were choosing what they were being offered. There was structure to what was being offered. ⁓ This is often called like the decoy effect or like the compromise effect in behavioral economics. What are we learning today? The idea that people are much better at making relative comparisons between clearly defined options than they are at judging a single price in isolation. A single number with nothing to compare it to forces your lead to guess whether it's a fair number or not. three tiers, clearly defined, lets them compare and decide with confidence. Now, before we move on, I'm gonna tell you I do not put my pricing on my website that lists my service packages because I change my prices as the market demands and I will forget to update the website. In fact, this did happen to me. I used to have them listed. This is me. doesn't matter. It doesn't matter. I just won't even think about that page. I'll just be like, do do do. And then I got to update all the contracts and all that fun stuff. Anyway. ⁓ I remember I increased my prices because the demand was so high. And then I had a consultation and I forgot to update the page where all the packages were. And I was like, oh yeah, you should be the premier package. How do you feel about that? And they're like, great. I was like, OK, that'll be two grand. And they're like, oh no, this says $1,500. And I was like, oh, OK, well, I'll honor it. That's my bad. have it. So then I was like, taking that out. So that's just a little story there. If you're anything like me, be warned. Okay, moving on. ⁓ Let's talk about some research from the Harvard Business School. A study on cost transparency... I can't pronounce these names. They found that when businesses were very clear and specific about what a customer's money was actually paying for... It measurably increased customer trust and purchase interest, especially for businesses where the customer had never worked with them before. That's exactly the position that you're in with a brand new lead. They don't know you yet. A vague number gives them nothing to build trust around, but a very clear package with a defined inclusions that gives you something. that your clients can concretely trust. Whew. Okay. So today, as you think about this, we're going to get deeper into creating the service packages and figuring out the pricing and all that fun stuff. But today I want some homework for you, per use. If you're in the car listening, just think about it. It's fine. Don't make it real homework. Just think. And I want you to be honest with yourself doing it. These are for advisors that charge fees. Pull up your last five client fees. Are they consistent? They might be. You might just be like a flat 250. But are they consistent in what you offer in that 250? Hmm. Are they tied to like a defined scope of service? Or is it just 250 and then I'll decide later what's included? Or... And I've heard of advisors doing this, like, based on the information, I think it'll be $932 for this fee. And I'm like, what? Where did you pull that number? Oh, I know, from your behind. Um. But did you just decide, like if you charge fees, look at your last five clients, was the fee consistent? Was the scope of service consistent? I know there are advisors, like there's plenty of you guys that charge fees like up in the live Q &As. And you're like, ⁓ yeah, I charge exactly this and this is exactly what they get, period. The end. But. those of you who do that, even if you're doing it consistently and it's just like one single fee, like maybe consider elevating those services and coming up with like one or two more service packages that are tied to the same niche, the same service, just a little more elevated. And then you have three offerings. And we'll talk about how you can kind of like help them. guide them to the service offering that A, you have the capacity for, and B, ⁓ would help you hit your revenue goals. Like you've got to have both of those factored in. But just think about that. If your answer is like somewhat fresh in terms of what your fee is, it's not really that consistent, either the amount you charge or the scope of services, That's not a failure, that's just information. Failure doesn't exist, it's only feedback. It tells you exactly where the opportunity is. Rewind this episode. I just pictured like a VHS rewinding. And listen to what I just said. Even if you're already charging a fee, like maybe consider having a couple more elevated services and just having slightly higher fees for that. And that also helps you with your boundaries because if they choose the lower service fee when you have multiple packages and they try to overstep, you can be like, well, you could pay for it. You didn't choose that package. I've to do that several times. And people were like, where's my day of timeline? Because I used to not have that in my, I don't remember if I had that in my lower package. It was something like that. And I was like, you didn't pay for it. Do you want to upgrade? You know what I mean? Because doing the weddings, I do the day of timeline with them and the photography team. Anyway, that's neither here nor there. So, back to what I'm saying, a defined set of service packages doesn't just make your pricing easier to explain. It will give you significantly more confidence with charging a fee and it makes your business easier to run because you stop reinventing your value proposition every single time somebody new reaches out. Tomorrow is gonna be all about, I wonder what the time is. Okay, yeah, it's all about building out these packages. And I'm gonna just walk you through the three tier structure. If you want to go get the sweet spot that helps you determine your possible niche, shiz, gets you to start on your ICA, and also helps you kind of like build the foundations of your service packages, it's $47. It's roughly like a five to six hour course, okay? Anywhoodle, we're gonna do the three tier structure tomorrow that I've been teaching like low key sometimes I'm just like, just do it to my advisors, not like in a mean way, but I'm like, just do it. You know, you should do this, you should do this, you should do this. It's the eldest daughter syndrome anyway, but I've been teaching this for years to people and how it works even if you serve more than one. type of travel. If you do cruises and resorts or you do custom FITs in Europe and cruises and resorts, you can also offer these same service packages across those different niches. All right, that was day 198 of the Travel Agency in a Year podcast. Thank you much. Thank you much. Thank you much, for coming by. I hope you enjoyed today's episode. If you haven't already, please hit the subscribe button. Only like, oh, what is the number? Okay, I'm gonna pull up my, stick with me people. Stick with me. Stick with me. Oh gosh, I had to like restart my computer. So now I need to go. Yeah, see, I'm looking at my YouTube stats. It's something like only. Why can't I'm such an idiot with this? You probably already left, it's fine. I'll just stay here anyway. Okay, your videos, where do I go to my analytics in YouTube? My YouTube account is a completely separate, ⁓ what is this tab? Dashboard, there we go. Analytics found it. It's a completely separate Google account. And I know I've got like the other stats. I'm just too lazy to pull up that other dashboard. Oh, okay. Audience. It's something like 60, 70 % of y'all are not subscribed. Please subscribe. It would be great. I would enjoy that thoroughly. And I'd be like, hooray. Anyway, have a great day. Bye.