Latest / Travel Agency in a Year / Day 169 - The Tyranny of the 'Good' Travel Client
Transcript
- Rachel K: Welcome back to the Travel Agent City New Year podcast. I'm your host, Rachel K, and we are on day 169. Also, fun fact: the 169th day of the year happens to be my birthday, if it's not a leap year. Google that to see if you aren't listening the first year this all airs. Thanks so much for joining me today. And as always, thanks for coming back. If you are new to the podcast, hit the subscribe button and you have access to this and another podcast I will be rolling out with once I get through 365 episodes of this one. All right. Today's episode, per my notes here. The tyranny of the good client versus the great client. Ooh, it's a growth trap. It's a growth trap, baby. If your travel agency is making steady money and your clients love you and your calendar is completely full, why do you feel so trapped? Why are you like, I can't do more? ⁓ ha ha ha. This happens often early in business. And this means you're ready to start scaling. The ultimate enemy of a great business is a good business. The enemy when you're first starting is failing. So the tyranny of the good client. Is preventing you from stepping into getting great clients. And you have a good business, but it's not a great business. And trust me, been there actually in the middle of doing that with my travel agency because things are good. But I was like, wait a dern minute, I can make so much more money. Why am I still doing this? Okay. Good clients treat you well. Good clients pay your fees if you have fees. ⁓ they refer their friends. And because they're nice people in general, it's feels like it's like greedy or ungrateful to move away from them. And they also consume 100% of your time. They act as a very, very hard ceiling in growing your business. And it prevents you from stepping into like premium markets or scaling more. Like the premium market, like luxury, higher end stuff. Like even if it's not premium like luxury, say you're doing like mostly budget trips. It's preventing you from just even getting more of that mid-range trip. And I have been there and it's okay. It's okay. So let's talk about an opportunity cost assessment. Okay. The good client trap. If you have 20 clients booking $3,000 trips, you're managing 20 separate files, 20 sets of possible flight changes, or room category changes, or cabinslash state room changes, 20 invoicing timelines. To make 60 grand essentially in booking volume. Like what? That's the good client trap. And I always just say 15% is the average commission in my brain. So I always use 15% if you aren't familiar with me. So not 10%, but $60,000 in booking volume. Say this is every single month you're dealing with this. That's forty five hundred dollars a month in commission. That is not a bad wage, but you're also like you will never be able to afford an assistant. You will never be able to afford to like Pay yourself a wage on a payroll and like maybe restructure your LLC to have escorp status with the IRS so that you can't have like health insurance. You know? If you just had three like groups or like luxury higher end clients where they were doing twenty thousand dollar bookings or like three groups over the course of a year, let's say, that's three hundred thousand total. That covers five months of your current twenty little clients every single month that you're managing. That's half your year, three groups, if that's like a hundred thousand dollar booking. ⁓ you would make if you just had three like luxury clients, like and not even luxury, just like a twenty K spend on their booking. ⁓ y every single month, you'd make the exact same amount of money. an 85% reduction in your administrative drag. And not only that, You scale that to nine, $20,000 bookings a month versus $20, $3,000 bookings, then you start generating the revenue to be able to hire people to help you safely and like pay yourself a reasonable wage and cover all of your expenses. So the reason that agents don't make this shift a lot isn't because they don't know the math. It's because you're probably addicted to the safety. Of the 20 clients coming back. ⁓ and the safety of the volume of business because having volume makes you feel busy and busyness mimics progress. It is not progress, it is just running on the hamster wheel, which ⁓ isn't that why you left your job to do this in the first place? To not be running on a hamster wheel getting nowhere? True Scale requires the courage to maybe have an empty calendar for a month or two or more so that you can find those high quality, high alignment, whale premium clients. And you don't have to I'm not telling you to go from like budget travel to ultra luxe overnight. This is your business. I'm saying like maybe whatever brands you primarily work with, maybe just step it up one little level. Okay, for your new clients. If you're getting new referrals, be like, ⁓ I've got this great place, it's a little bit higher budget. Are you willing to spend an extra thousand dollars? And they'll be like, Well, let's see if it's worth it. And then you offer it and then you get that little bit extra commission, right? Or you could just go primarily into groups. That's kind of what I was doing. I was doing a lot of honeymoons and some weddings. And then I went all in on weddings, I think in twenty twenty. And I was still doing like the occasional one off, like literally one to two FITs a year, maybe five. But I went all in on my marketing for weddings. And it took I think I started Once I figured out my content strategy and my marketing strategy, I think it started in July of twenty twenty, maybe. Anyway, in July and by October, so about three months of like terrible, terrible content out there. But three months of promoting myself all over the place. I started getting weddings. And I started getting weddings saying, ⁓ a fifteen hundred dollar fee, I'm gonna pay this right now, you don't charge enough. And I started getting groups of my like a small wedding group for me was like sixty to seventy guests. That's a small wedding for me. Most of my wedding groups before I changed niches, they were closer to like a hundred to a hundred and twenty guests. You know. But I did have that time frame where it's like, ⁓ I'm paying all my bills on my credit card. Ugh, I can only pay fifteen dollars on my credit card and it's at its limit. It is full capacity of borrowed money. You know, I had to go through all of that. And you might have to too, if you want to change how you're working, and if you want to change the opportunity cost that you are in. And it's really hard again. Because I had to say no to a lot of referrals for FITs. Because it was just me for time. And then I started hiring staff. But I had to say no and be like, I'm sorry, I am just in it with weddings. I don't have the capacity to do this honeymoon. with my repeat clients and it's sad. It was really sad because they were like my OGs. Alright. So how can we get you all aligned? Let's do a grading system and let's audit your current book of business. ⁓ let's do your energy audit. Let's take out a notebook and write this down or dry erase board, whatever. And we're gonna do your energy. Your ceiling, and then we're gonna talk about like off-ramping on this nightmare. If you are like, ⁓ yeah, I am absolutely drained, I feel like I'm getting nowhere, I'm not growing my business, I don't even have time to market to add to my book of business because these repeaters keep coming back and they're like, I need this $1,200 cruise. And you're like, that's $80 in my pocket. This is my nightmare. Okay, so the energy audit. Grade your clients not by revenue alone, but your by your cognitive load. Do you have clients, even if they come back to you over and over again, they just don't read anything, and then they're constantly texting you, and they're constantly emailing you, and they want the hand holding, and you're like, this is literally the same trip you've booked with me three times. You should know how to do this by now. Like, do you have clients like that? If yes, they are charging you an emotional tax that is bankrupting your scaling capacity. Because you're just like, ugh. Read. Re I do a lot of like screen records and it'll be like read the emails, watch the videos, you've done everything you can, and then they're still like well how do I find my transfer? Well it's all over the freaking crap I sent you three weeks ago and a video. ⁓ why are you what's app me right now? You're supposed to be having a good time and you're supposed to have red. Okay. So those kinds of people are a huge cognitive load and they should be getting an F. Now you're gonna have the other ones that like I like my repeat clients that are like, this is what I want, this is where I wanna go, these are the dates, you know, I've already got my flights booked, just book it for me. Like that's always like they're not they're not an issue. But there are those other repeat clients. Or they refer people and then ⁓ gosh, I remember I got a referral. I had a smaller birthday group earlier this year actually. And then the guy was so happy, the like the lead of the group, he referred me to like a daughter, like an adult daughter in law, something like that. And it was right before a holiday break. And I was like, I have one day to book this, ma'am. I will be out of office for the next two weeks. And she wasn't reading any emails. She was texting me and she was sending me screenshots of Expedia pricing for the same itinerary. And I was like, Yeah, I can get you a price match, but you gotta pay this. You gotta pay this deposit. And then I could submit the price match. I will be out of office for two weeks starting tomorrow. ⁓ guess what? She didn't book with me and I was like, Ugh, I should've I didn't even charge her a fee. I was like, ⁓ this'll be easy. No, it was a nightmare. And you may have repeat clients where you're just like, I can't work with them anymore. All right, the ceiling filter. Next we're gonna identify clients who have hit their maximum budget threshold. If their absolute maximum budget is five thousand per trip, period, full stop, nothing else will change. No amount of your marketing or special relationship you build with you build you build with them is gonna turn them into a client that books twenty five thousand dollar trips. You might want to convert that one or those types of clients into small groups. That's about the only way you can do it. Like, hey, I can definitely get you this and then throw in some possible concession or something. But I need you to find me eight more people to come with you at a minimum. Can you do that? Okay. Because Most of the time if they can save an extra two hundred and fifty dollars when they're under a five thousand dollar trip. ⁓ they're gonna find eight other people to go with them. And now you've got a small group and now you've made the return on your invest like you're making the money on that one client. But if they're just like, No, well okay, well, unfortunately at this budget I can't serve you unless it's a group because I don't have the capacity for this business. And it sucks, it sucks so bad. For basically saying in the nicest way possible, you're too cheap for me anymore. But it will happen. Sorry. ⁓ And it's here's something I want you to know. You run a business, not a charity. If it doesn't make sense for you to serve those lower budget clients anymore, unless they are willing to do a group, like you could gather them all together and be like, hey, I have this group space. Maybe they'll maybe they'll bite, you know? But ⁓ like I said, you're running a business, not a charity. Why are you doing the same level of work for less money? Right? Okay, so how do you do this transition without completely burning the bridge and sounding like a complete asshole? Great question. You need to transition them out. Here's a sample script I wrote down. And this is kind of what I used. As my agency focuses strictly, or now focuses strictly on whatever new niche for the remainder of the year, since this is being recorded and first time publishing in June, or moving into 2020, whatever, 27, 28, 29, 2030, whatever. Moving into the next year. As my agency is my agency is going to be pivoting to focusing strictly on whatever niche, I do want to ensure you that your trips get the dedicated time that they deserve. And I'm officially partnering with refer them to another agent who needs the business who specializes exactly in this. Okay. That way they're still getting served. And then you can add to it, like if you want to move into this kind of trip moving forward, I would love to work with you with it. For your trips now, I'm going to fully serve you. Moving forward with future trips, this is who I recommend you work with. They specialize in these like family vacations or whatever the heck. And I have to pivot. You know? Then you don't sound like such a jerk. They're far more understanding. ⁓ sometimes I've had to tell people like my like my mid-range FITs that are like, I want XYZ, period, the end. Here's the dates. I already know how much it costs. I want you to have the business. Those are the easiest one repeats in the world. ⁓ But ⁓ Sometimes those people have referred to me, like referred me to their friends, and they almost always reach out first and be like, hey, like at first they didn't. And I'd have to email these people and I would say, I'm really sorry, I'm at full capacity right now. Here's someone I recommend you work with. Like I'll talk to you via email for a few emails. And then I would be like, Here's an agent. Reach out to them. They can help you with this. I won't be able to serve you properly. Okay. So when that happened. My repeaters were like, Hey, I have a referral. Are you capable of taking it on? Like they learned to do that for me. And then I would be like, yes or no. Or be like, oof, I can't take anything on for two or three more months. Happy to help them. When are they looking to go? And if they're like, ⁓ next week or something crazy, then be like, well, no, here they can go work with this agent. Okay. So you can still help them. without feeling guilty, because it is your business. It would be like if you owned a restaurant and they were regulars and you were you let's say it was a restaurant and bar. This is the easiest way to frame it. And you had Budwi Budweiser on tap. And then the contract expired for Budweiser, nobody except that one regular or maybe two regulars at your bar. actually drank the Budweiser on tap. So it was always gross. I don't whatever. And so you're like, I'm gonna pivot and offer well, Yingling's comparable. ⁓ I'm trying to think of something nicer. I don't why did I choose beers? I'm gonna chart I'm gonna bring in a more premium beer on tap because that's the demand of everyone in the town and I want more people in town coming to my bar so that I can get more food sales. From having this premium beer on tap, right? And you switch out the taps, and then your regulars come in and they're like, Where's my Budweiser? Well, it's no longer available. We can get it in a bottle. Well, I like it on tap. Well, we have it in a bottle now. They're not gonna leave your bar. They're not gonna go leave a one star review and be like, this bar and restaurant's the worst. Because they're clearly gonna look like an idiot online. So like anyone I don't think I've ever seen a review like that, but if I ever saw a restaurant review where someone's like, they changed out the beer on tap, be like, wow, grow up. So if I were reading that review, I'd be like, that review is not reliable. Okay. You cannot build a skyscraper. I want you to have this takeaway. You cannot build a skyscraper on a foundation designed for a house. If you have to drop a good polite client, it isn't mean. It's a mandatory act of operational maturity for your business. And yes, it sucks. And yes, you can do it in a nice way. So you can check out your client list today and maybe identify the top 20% who consume all of your time and like emotional and cognitive load. And are they even aligned with what you want this business to look like in three or five years? Because if they aren't even close to it, like I said, if they're always like under five thousand, under five thousand, I want this trip under five thousand. And you want your average trip spend to be fifteen, twenty, thirty thousand, or even just ten thousand or seventy five hundred, they're never gonna be aligned with that. And at some point you do have to cut that them loose. Maybe you should do that before the end of the year. Okay. Maybe this weekend you should draft how you're gonna phrase this to them. Maybe this weekend you should make sure you have an agent in your roster, whatever, contacts that you can refer to them that wants that business. Okay. All right. Well, thank you for joining again today. Day 169. Yep. And I will see you tomorrow.