Lucy Hirleman, owner of Berkshire Travel in Newfoundland, New Jersey, knows her agency's customers. In her database, Hirleman notes which clients have expressed an interest in last-minute trips, who likes to ski, who's a budget traveler, and other relevant bits of information. Every day, she boots up her database to retrieve the names of customers who may be interested in timely or targeted promotions. "If I get a fax about something special for kids, I call up the list of families in my database and let them know about it," she says.
It pays to pass on relevant information. This winter, Hirleman received a last-minute promotional offer for a Caribbean vacation and passed it on to eight clients she had tagged as last-minute travelers interested in the islands. She quickly sold two trips. "Anyone who values their time - whether they're a waitress or a Wall Street guy - still uses a travel agent," she says.
"Lucy is the kind of travel agent who tailors what she sends to me, and doesn't just pepper me with information," says client Quint Barker, a Wall Street executive."It's well worth it to me to pay her a fee for her services."
That's just what travel agents want to hear - and their databases are helping them hear it more often. "We recommend that our members embrace database marketing," says James Ashurst, spokesman for the American Society of Travel Agents (ASTA). "If you can effectively target consumers by appealing to their interests, it can go a long way toward increasing sales."
Adds Scott Alsmith, vice president of Los Angeles-based TRAMS (Travel Agency Management Systems), which owns Client Base, a database system designed specifically for travel agents: "We've all learned that one-to-one marketing is the best way to convert a prospective customer into a real one who spends money."
Travel agents have been forced to find ways to do just that, given what has occurred in their business during the past five years. In the late 1990s, agents saw their base commission on airline ticket sales drop from 10 percent per ticket (with no cap on pay) to 5 percent with a $50 cap per round-trip ticket. Industry analysts estimate that the airlines saved $5.2 billion by cutting base commission rates. Since agents book roughly 80 percent of all airline tickets, the drop in commission has translated into a dramatic decline in overall take-home pay. It's also served as a wake-up call for agents seeking to survive and thrive - now and into the future.
According to Ashurst, most travelers (63 percent according to a 1998 survey sponsored by ASTA) still use an agent at least some of the time. The reason? People are busier than ever and are willing to pay for services they value, says Ashurst. "Even though people are techno-savvy, they continue to use service industries," he adds. "I could go online and do my own taxes, but I don't because I don't know what I am doing. Not to mention that I'm too busy."
The same reasoning holds true for consumers who use travel agents. And agents who use a database to record demographics and psychographics about their clients say this information is key to knowing which trips to pitch to their busy customers. "If you are my travel agent and you send me a brochure about great golf trips to Scotland, I am going to throw it away because I am not a golfer," says Sue Shapiro, president of New York City-based GIANTS, a consortium of 1,250 U.S. travel agencies and 850 in Canada. "But if you send me something about a shopping trip to Hong Kong, you've not only made yourself a booking but you've earned a friend - and loyal customer - for life."
The best way to get to know your customers, Shapiro says, is to talk to them. GIANTS provides a customer questionnaire to all of its agents so they can get a better read of their clients. Among the questions on the survey: Where have you been on past trips? Where are you interested in traveling to in the future? How much do you usually spend per trip? Who do you like to travel with - family or friends? How many times a year do you travel? What is the average length of your trip? "The more you know about [your clients], the easier it is to sell to them," says Shapiro.
According to Alsmith, agents who work with a targeted list enjoy a double-digit return on their investment, while those who work from a general list see only a half-percent return. Consumers receive enough junk mail as it is, he says, that the last thing they want is information on a trip they will never take, can't afford, or have no interest in. Dick Knodt, president and COO of the Washington, D.C.-based consortia Vacation.com agrees. "Yuppies only want to receive mail focused on `me.' They want information on upscale deals, not $39 hotel nights in Las Vegas."
Many agents are finding creative ways to maximize usage of their databases, once they have them set up. Ruth McKann, owner of LaMasters Travel in Temecula, California, has used TRAM's Client Base tool since 1994. Prior to implementing the database, her six-person, $6 million agency kept all of its customers' records on slips of paper, scattered among agents' desks. Those days are gone. "We now use the database every time a client calls, walks in the door, and books trips with us," she says. Each agent has access to all of the listings, so if someone is out of the office, a colleague can retrieve a customer's information and assist him.
The database also allows McCann to track which incoming calls result in sales. "Monitoring closing ratios enables me to watch my staff and see if there might be someone who needs more training in closing deals," she says. Keeping notes in her database on destinations that interest clients helps her figure out who to invite to special presentations about various parts of the world, such as Belize or Alaska.
In addition to being an effective marketing tool, a good database can be a selling point if a business is sold. "It's not enough for an agency to tell a potential buyer they know `lots' about their clients," Shapiro says. "If you can show that buyer a valuable database, it will double the value of the agency." A well-maintained database can also be a bargaining chip when negotiating deals with suppliers, says Knodt at Vacation. com. "Suppliers want to know everything - demographics and psychographics - about your clients," he says. "A Seabourne customer is not a Carnival cruise customer but a Club Med customer might be. This [insight] can help agents if they go to a cruise supplier and tell them, `I have a database that might be of interest to you.'"