One of the most debated and controversial topics within the industry is whether or not to charge planning fees. So, what made us feel so bold as to tackle the subject? In case you haven’t heard, ASTA officially adopted the philosophy that all advisors should be charging fees for their services. With the shift in the industry, it’s time to talk through the benefits of implementing and charging fees. For those who are already charging planning fees, we are going to share a few options on how to safeguard your income and time with various forms of fees.
Team “No Fees”
If you’ve heard Jennifer speak before, you know that she was adamantly “team no fees.” It seems that a lot of people start their business like this- sharing the deals and making the barrier to work with them very low so that they can build their clientele. However, what ends up happening is that you can easily create a book of business that doesn’t value your time and fails to become brand loyal. Needless to say, fees are now a tenant of Jennifer’s booking philosophy. It turns out thne doesn’t have to choose between being approachable and clients having respect for your time. You can have both.
The Hard Way To Learn
In the beginning, we would have people come to us through Facebook, text…and every way possible. They’d message saying, “Hey, I want to go here can you send me a quote for XYZ.” Ultimately, we’d do it because we were hungry- but the conversion rate was incredibly low because those individuals were usually price-seeking and had no interest in working specifically with the brand.
Your Real Overhead
Many of us do have regular expenses, but your real overhead is your time.
By implementing fees, the client has “skin in the game,” so to speak. Since they are investing, there tends to be less of a chase to get feedback on proposals. We’ve all heard the term “getting ghosted,” and that’s exactly what we started avoiding once we implemented fees on the front end (prior to a proposal being sent). All of a sudden, our clients were more respectful of our time, they were getting back to us with more frequent communication, and the process was more professional as a whole. People don’t question the fees of a lawyer or accountant’s consultation- the same thing should apply to travel advisors.
One more thing is that by charging a fee, you get to define what that fee is actually for. By managing expectations and telling people what they’re getting when they pay for your services, you’re making it very clear what the inclusions are, and only the people that tend to disrespect your time are going to be the ones that challenge that fee.
Tip: Create a fee invoice and outline the number of calls, revisions, and touchpoints that a client will receive in order to create boundaries at the beginning of the relationship.
Your Knowledge Comes At A Price
All right so the next thing, is that your knowledge came at a price… or will come at a price. Even if you’re listening to this, you’re newer to the industry, and you’re thinking “I’m new. Do I offer value yet? Does my time justify charging a fee?” The answer is “absolutely, yes.” If you ask anyone who is tenured they are nodding their head right now. We can just feel it.
We want you to think again about lawyers or CPAs/accountants. No one questions being charged for their time because they invested in a certain amount of education. Yes, someone went to law school and they got a degree and now they charge $300/hour just to give their advice. We don’t say this to minimize that. What we’re saying is that it’s not always a tangible product that they are walking away with, just as you creating a proposal for a client isn’t something tangible that they will experience right away.
With that being said, there are multiple ways that travel advisors invest in their business. One is by investing in travel experiences, while another is investing your time in educating yourself by way of trainings, retreats, webinars, and even this podcast. Our whole philosophy at Tique is if you run your business like a business you should be investing in your knowledge and your client experience.
Protect Your Business
2020 proved the need to recession-proof our income. Many advisors work with seasonal destinations, meaning that clients are not traveling year-round. However, by charging fees, you are able to collect an income even during the months that commissions are not coming in. Our personal belief is that the safest way to operate a travel agency is to collect fees that fully cover your expenses.
Establish Yourself As A Professional
The next thing is very simple, and probably the hardest for people to actually quantify, which is to establish yourself as a professional service. Once someone establishes themself as a professional service, there’s no question as to whether they should be paid for their time. When there is a truly structured process, it exemplifies that you are running a real business, which also gives clients confidence in their choice to work with you.
Create A Safety Net
A total game-changer is that fees can create a cushion to remedy booking errors or service mistakes. You could be the most detail-oriented thing and there’s something that will slip through the cracks. But when this happens, it often comes out of the travel advisor’s commission. In knowing that you may need some funds to provide service recovery, it is important to quote client fees in a proportion to the complexity of the trip.
In addition to using funds to fix issues, planning fees can allow you to create a budget for client gifting. If you don’t send your clients gifts, then this is a non-issue. However, client gifting (big or small) can be fantastic for brand recognition (particularly if you send something that people want to show off on social media).
Choose Your Fee Types
We’re going to end this by giving you some options of what fee structures look like. First off, obviously is the service fee. This is something that would be charged right up front after an intake call. Some people actually charge that before the intake call, but by waiting until after the intake call, you are maintaining the choice to work with the client or release them before sending them an invoice.
The next potential fee type is a change fee, which is an option that more and more advisors have done since the mass reschedules of 2020. Changing a trip date can require a full requote, and may include many changes depending on air schedules, pricing, and availability. A change fee can compensate you for the time it takes to recreate a trip that you have already planned.
Then there is the option of a cancellation fee, which may be a bit controversial since no one looks forward to canceling their vacation and this could cause the relationship with the client to sour. However, you could put it in your terms and conditions so that you have the ability to charge it if you feel like the circumstance makes sense.
Lastly, you may want to consider a supplemental call fee for those clients that continue to abuse your time and wish for more calls than necessary. This can be collected directly through a scheduler system to avoid a lack of payment.
“Blessing & Releasing” A Client
The last thing we’ll leave you with is that IF you do need to “break up,” having a fee that you can return is a very cut-and-dry way of releasing that client. While we’re not promoting refunds, sometimes someone may sneak into your client workflow that isn’t a great fit for your business and a refund is a very finite way of shutting the relationship down. While they may not get the pleasure of working with you, or the trip that they wanted, offering their investment back closes the interaction is as pleasant as possible.