AITO: The thorny subject of consultation fees

Diane Denney, managing director of AITO agent, Somewhere2travel2 (www.s2t2.co.uk) tackles consultation fees – to charge or not to charge.

"At our North Devon-based travel agency – Somewhere2travel2 – we charge a consultation fee for our independent specialist advice.

Thorny subject this one – so what made us decide to charge? I say ‘us’ as it was a team decision.

Over the years, the ‘shop-around-and-then-barter’ mentality affected everyone, hitting profitability and staff well-being. Believing if we didn’t treat ourselves as professionals, how could we expect the customers to treat us as such?

So, after a number of particularly bad experiences with some customers, we decided something must be done – before I broke the golden rule and swore at a client!

We then spent time researching customer enquiries and found that 30% opted to book with a cheaper option (for example, online) and we had lost 10% of existing clients because we could not respond quickly enough or be thorough enough in our research due to time restrictions (wasted on clients that would then book a cheaper option elsewhere).

We asked ourselves, could we use the 30% of ‘wasted time’ to better effect? Could we focus on not losing existing clients who deserved our respect and attention? Could we convert more enquiries into bookings?

We decided on a seven-point customer care model, detailing the consultation fee process, i.e. what clients expect from us, including a 30-minute or so consultation period, then a £50 consultation fee for additional research. The latter is credited to the balance of the booking, so in reality there is no extra charge to a genuine (i.e. booking) customer.

We have been using the model for over two years now and believe it has kept us in business. Our business is being recognised and treated as a professional service by customers, operators and local and trade media.

We love it and would not go back to the good old days!

If your travel agency is considering a move to charging a consultation fee, these are the pros and cons to consider:

The pros of charging a consultation fee:

• Deters potential time wasters – brilliant!
• Identifies your real customers
• More time to spend on real clients
• More time for staff training
• Increases quality of customer care         
• Increases referrals from clients
• Great customer testimonials and feedback
• Time to spend marketing and planning the growth of your business
• Better staff morale and sense of being valued as a professional
• Increase in profitability
• Increase in average spend
• Minimal discounting and price matching
• Better conversion rate from enquiries to bookings
• Increase in revenue for tours operators
• Active support from tour operators, including the Association of Independent Tour Operators (AITO) which we work closely with as an AITO Specialist Travel Agent

And the cons:

• Staff participation, support and training before implementation – and implemented badly it can be a deterrent
• Some people will not enquire on principle"
• Word of mouth – a bad experience and the reputations can be damaged