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Tue 11 Dec 2007 11:05 AM

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Making 0% work for you

In the first DTTAG educational seminar, TRS Consulting discusses how agencies can make a service fee environment a success.

Helping travel agencies tackle the move towards a zero commission environment is high on the agenda of the recently reformed Dubai Travel and Tour Agents Group (DTTAG).

Eager to provide some solutions for its some 60-plus members the group recently teamed up with Dubai-based TRS Consulting and DTTAG sponsors EmQuest and AIG insurance to host its first educational seminar entitled ‘Making zero work for you'.

No one will pay a service fee for something of little or no value

The sponsors subsidised the event to ensure it was affordable for agencies taking part.

Leading the training workshop, principal consultant at TRS, Sundar Vasudaven, explained to 25 agents from a handful of Dubai-based agencies some of the key factors to bear in mind when considering how best to introduce service charges to clients.

According to Vasudaven, the main obstacles to successfully implementing a service fee environment are customer opposition and a lack of confidence on the part of the agent.

If you are not convinced that you are justified in charging a fee then the client won't be either," he explained.

You have to be prepared for the client to ask questions and have various objections to paying the fee. The best way to prepare for this is to work out what they might object to and prepare practice answers to explain and show them what added benefits they get by paying a service fee, and the reasons it is a good thing."

But in order to do so successfully, the agency must first make sure that it is offering a value added service that a client is going to want to come back for again and again.

According to Vasudaven, services above and beyond the usual call of duty are required to justify charging a service or travel management fee : "No one will pay a service fee for something of little or no value," he explained.

WHAT THE AGENTS SAID:Nasheen Ali, business travel consultant, Al Naboodah Travel and Tourism:

The seminar was very good - nowadays all passengers can buy from the internet, but every agency must make a profit, so we have to be able to justify charging a fee.

We don't normally charge for the services that we have always given for free. We used to get the 7% but now since we are providing more services and spending more time on each transaction and finding specialist packages, we must charge.

Rizwan AbooBacker, business travel consultant, Al Naboodah Travel and Tourism:

If you provide a good service, customers are happy, but still there are certain things we can't do for them. If there are certain restriction on flights - changing or cancelling them - that is beyond our power, but as a travel consultant we do whatever we can to help 24/7. If a customer is running late and it is likely he will miss the flight we will book him on the next available flight - with the internet you can't do this, so we offer greater value.

If you give a good service to the client they will come back, even if there is an extra charge.

When the airlines said they were going to zero, sometimes you thought what is the use of sitting here? But some of the ideas we discussed here were really good - like having agency fee cards. If all the agencies start together then the customer won't have any option. Zero percent commission is currently a negative for us but we have to make it a positive.

Fazly Askin, travel consultant, Al Naboodah Travel and Tourism:

The most useful part of the seminar was getting to know how to answer the customers when they ask why we are charging a service fee. Certain customers don't trust the fee unless they understand why we are adding it.

I am based in Ajman - most of the customers there don't want to pay more, so it's tough to deal with certain customers. Everyone is getting used to using the internet for bookings very well, so we have to offer better service to compete.

Riyazuddin Mubarak, branch manager, Alta Al Ghaith & Al Moosa Travel Agency:

Based on what we discussed at the seminar, agencies should train their front line staff to higher levels - that is the most important thing. The most important thing I took from today was to make sure that all staff understand what it is we are offering to customers that adds value, and that this value should not be delivered for free.

We should charge something for our services and it should be genuine. We are not going to charge for something that has no relevance.

So we should evaluate our service and charge accordingly. We should also convince the customer that they are paying for something that adds value to their demands or needs.

You have to live up to the promises you make, like refunding in good time. Help to expedite the refund process; don't make a customer come to your office 10 times during office hours or you could lose him.

He continued: "Think about what other kinds of services you can offer in order to warrant a professional consultancy fee. Follow the ‘NBDB' theory - never been done before. There has to be a transition from ticket dispensing to travel management.

But the successful transition has to be driven from the top; travel consultants have to be trained to a high enough degree to make sure that they are offering the levels of service required and that they are able to explain to customers why they are charging a fee "without making a fuss about it", he added.

"My advice to general managers would be to organise an internal session with all your staff to prepare for any questions that might come up," Vasudaven said.

Tell staff to be objective, not apologetic. Big customers will try to use their commercial importance to get you to drop the fee. Your staff have to explain why they are paying and remind them that the reason they use your services in the first place is that the quality of your delivery is so good.

Vasudaven also suggested that if a travel agency was obliged to sell a certain product that did not suit the customer's needs, but the agency next door did, they should think about sending the client to their competitor, thereby providing the customer with what they needed and establishing a ‘you scratch my back and I'll scratch yours' relationship with the rival agency.

The group also discussed some of the additional services that agencies could provide to their customers to add value to their service and they talked about the benefits of introducing a service fee card that would make the whole transaction more transparent, detailing what additional fees they would be charged and for what.

"One of the biggest challenges that customers have in understanding the fee system is the consistency of the fee application, therefore it is a good idea to have a fee card that they can present to customers," said Vasudaven.

"Since fees are here to stay, the question is how soon can you adapt to this change? Will customers pay a service fee? That is up to you.

Vasudaven’s top tips• If a client claims the agency across the road is not charging a fee, point out that there is probably a good reason for that - you pay peanuts you get monkeys.

• Think outside of the box - sell them what they want, not just something off the shelf.

• Spend time with customers: without spending time with them, how on earth can you know their needs?

• For good service you need good staff and they don't come for free. Invest in people and the company will make a profit.

• Look at services beyond travel that are really innovative.

• Get used to not having to depend on the supplier relationship for commission.

• Think about establishing different grades for customers, similar to credit card or loyalty programmes.

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