Last week I met with a travel agency that has been struggling to bring its fledgling business into profitability. In the period of time Ive worked with this agency, it has made a great deal of progress. They analyzed their cash flow and determined which sales were most profitable . . . and restructured staffing to focus on those. They implemented a web site to inform and entice new and occasional customers and established a follow-up program to cross-sell and resell their best customers.
But when we talked last week we discovered they werent doing the one thing that would probably make the biggest difference they were making a mistake that, in one way or another, most businesses are guilty of.
I wont give you a dissertation on the travel business, but you should know that in todays market you cant make any money booking conventional airfares. The 5% commission you get doesnt cover the time and effort it takes to do the bookings, make all the changes, do all the handholding, etc. And even if you do a lot of volume and get your commissions up to 8%, youre running a break-even business. The profit today is in packaged tours, cruises, and specialized travel.
This agency was developing the profitable components of its business, but its top two salesmen spent 90% of their time handling about a million dollars a year in conventional airfares. In other words, the companys two best moneymakers were devoting themselves to the least productive work.
Worse, the hundreds and hundreds of bookings they were making, comprising thousands of customer contacts, were handled as customer-service activities not as sales opportunities.
Think about that. Thousands of inbound phone calls from prime customers and not a single attempt to make a sale!
What is going on here? How is this possible?
A Giant But Invisible Mistake Most Businesses Make
Actually, this is much more common than you might imagine. Most businesses divide their work in half. On the one side, you have sales and marketing. On the other side, fulfillment and customer service. Often these activities are separated physically, with separate management, separate work philosophies, and separate personnel.
In the case of our little travel agency, the same people did both types of work but they handled the work in two completely different ways.. When booking airfare, our top two performers acted like customer-service reps, providing courteous, efficient service. When it came time to get on the phone and sell, they did only that. And never the twain did meet.
All those lost sales opportunities! Why? Because the agency didnt want to sell people when they wanted service.
If I had an extra hour today . . . and you did too . . . we could talk about this fallacy at length. But given the limitations of our busy schedules, Ill boil it down to this: If the product or service you offer is worthwhile, selling it IS a service.
Some people understand this instinctively. Most of us have been trained to think otherwise. That selling is fundamentally wrong. It is pushy. It is inconsiderate. It is not helpful.
A Secret Of Success: Understanding The Virtue Of Selling
Id like to replace that idea which is partly right but mostly wrong with another one.
As businesspeople, it is our job to provide more and better products and services to our customers, to help them solve their problems and achieve their ambitions. And we should do so enthusiastically, assertively and without reservation. (Remind me to tell you the story of D, the lady who sells me jewelry.)
When someone calls you to book a flight somewhere, I told my client, you have two opportunities to make his life better. The first is to give him the right flight at the right price. The second is to send him on a trip he will appreciate for the rest of his life.
If you take good advantage of one opportunity, I told him, but neglect the other, you are not providing the best possible service. I assure you that every person who calls to book a business or personal trip is planning to, or is dreaming about, taking an exotic vacation. And here you are, with a basket full of exotic vacations (which youve put together and which afford you the profit margin you need to run a profitable business) and you are not doing anything.
Im serious about this. Taking an order and fulfilling it . . . without finding out how else you can help your client . . . is a major customer-service failure. Think about the business you are in and ask yourself if you are taking full advantage of every opportunity to sell your customer.
When You Dont Sell, Your Customer Suffers
A business relationship is based on the expectation of mutual benefit. If you limit the benefit you provide to that which — and only that which — your customer specifically requests, you are much, much less valuable to him in the long run.
Heres what we are doing now in this travel agency. We are creating a personalized customer-service database. Every time we book a flight for a customer, we are going to find out a little more about him. When and how much he travels. When and how often he goes on vacations. Which destinations he likes and which he abhors. Whether he travels alone or with family, or friends, etc.
Then, based on that information, we are going to make sure that every time we speak to him we make him aware of the other services we can provide. If we ask the right questions and give him the treatment he deserves, he will be happy to do more business with us. (Remember what I said in Message #132 when I talked about the ETR Golden Rule of Customer Service.)
When we ran the numbers, we realized that if only one in a hundred future phone calls results in the sale of a packaged tour or cruise, we will double our profits. One in a hundred! My personal guess is that the number will be much closer to one in 10. And eventually even better than that.
Grow Your Business By Treating Each Service Call As A Sales Opportunity
The additional business will create a much larger base from which to expand the business. This means that our two top salespeople will be able to gradually free themselves to focus on our higher-volume customers, while our new employees handle the others.
This process, combined with ever-increasing commissions (due to larger volumes), will turn a million-dollar business netting 5% into a 5-million-dollar business netting 10% in about three years ( if my numbers are right). And all this is based on making a single change: a commitment to make every customer contact part of our selling process.
Think about how you can do this with your current business or the business you are planning to start. You must develop your business in such a way that you can provide more and better products/services on an ongoing basis. And you must train yourself and your people to think about the selling process as good, not bad . . . helpful, not selfish.