Top 10 Tips for
Choosing Your Host Agency
The irony of it all. Last month, as our nation was celebrating its independence, I was on the verge of losing mine. I'm referring to my travel agency independence.
Twenty years ago and for only $10, my travel agency was born. I joined CLIA to book cruises and the rest is history. Because of an early online presence, I became a national account with three cruise lines. I was up to my elbows in accounting paperwork, unfulfilled marketing plans, handwritten or DIY Excel CRM creations and a client call-back list that kept growing.
Then I heard about host agencies.
About twelve years ago, in a quest for simplicity, I began investigating the host agency concept and its players. Giving up my agency independence was not easy. Calculating the out-of-pocket expense of starting my business in Michigan 1992 and moving it to regulation-overload Florida in 2000, fueled the fire.
Fast forward and several host agency experiences later, I've tried most of them, including the ones that offer a franchise opportunity. While all of them have been a good experience for me, they all vary in their offerings.
Last month, once again I decided to give up my agency independence for good and choose another host agency. But this time, the search was exhaustive, difficult and slow.
Here are my Ten Tips that I've compiled to help you select a host agency.
1. COST: Compare startup costs, monthly fees, ticket service charges, set-up fees for a template Web site with a consumer booking engine, mailing costs, fees for not making a quota and any other miscellaneous "hidden" fees. They can quickly add up and cut into your profit. Ask, ask and ask again. The sales person who wants you to join may "forget" to mention one or two.
2. TRAINING: What type of training is included with your membership - mandatory classes at their headquarters, elective classes, printed manuals, virtual self-taught or mandatory virtual classes? What expenses/fees are involved - hotel, meals, transportation to/from your home to the host's office? Consider the time factor as well as cost – how soon can you start booking your clients vs. how much time to learn a new system?
3. TECHNOLOGY: Will you have access to a CRM software/platform and what is the monthly fee? If you need a GDS, do they allow you access and at what cost? Will you need new or a different computer (Mac or PC) and equipment? What about a toll-free phone number? Think about the ease of learning their proprietary software and any redundancy when entering client information. Learning curve vs. efficiency translates to: Time is money.
4. SUPPORT: Now that you have all of the shiny new software and stacks of manuals and lesson plans, what happens when it just doesn't work as it should? Is it virtual or actual support? (Who ya gonna call…Host Busters? Sorry, couldn't resist.)
5. COMMISSION: How often does the host pay – and how long after they've received YOUR money from the supplier do they part with it? I had one local host who sat on my $4,000 commission check over seven weeks after they had received it. Will it be direct deposit or do they mail you a check?
What happens to your TCs and bonus commission? With most host agencies, if you don't use it (TCs, marketing funds etc.) then it's considered commissionable revenue and you have to split it with your host.
Most important, what commission percentage are you comfortable with receiving? The range goes from 60% - 100% commission split. You need to ask yourself if going with a low percentage is worth the amount of time that you might save because the host will do all of your back office accounting and client reminders for you. If all you will have to do is sell, sell, sell and enter the client info and booking one time, then that could be something to consider.
How much are you willing to pay a host in monthly fees to be at their top tier of commissions? It can range from $40 per month to $199 per month to be at 100%.
6. MARKETING: Some host agencies are so big that they are their OWN consortiums. Others belong to Vacation.com, Signature, Virtuoso, NEST and Ensemble. Find out the quantity, variety and quality of their blocked group space and client value-added amenities.
7. LEADS PROGRAMS: Several hosts have some kind of leads marketing systems offering a commission split from 30% to 50%, while others have leads programs that are a pay-per-lead concept. Some host agencies offer their leads program to only "x" amount of agents so that the agents in the program have a steady stream of prospects. If this is the case with your intended host, ask how you can get involved. If you want a host agency with a leads program, ask if there is an agency hierarchy which determines who receives the "best" leads. If so, learn what you need to do to move up the ladder to their luxury or big ticket leads.
8. SALES REPS: Be prepared to explain to your favorite sales rep that you will no longer be in their territory because you have a new host in a different part of the country. What you give up in convenience you make up for in being part of a larger entity and maybe a national accounts agency. It might be a bit more difficult to get your former sales rep to stage a cruise night for you as they won't directly be reaping the benefits from any sales. It's always worth asking.
9. SIZE: Will you be one of 4,000 or 400 agency members? Does it matter to you?
Remember that just because a host has thousands of members, it doesn't mean they are all active members. If you succeed and thrive, chances are when you call the home office for support, they will know who you are.
10. EXCLUSIVITY: Does the host require you to be exclusive or can you have two hosts? For example, one host agency for luxury clients and one that you use for your mass market clients? Something to consider if you have mostly luxury cruise and tour clients. Certain consortiums negotiate with their luxury suppliers to add extensive amenities that you can't match anywhere else.
If you have gotten this far with my article, chances are you are serious about finding the right host agency. Weigh all of my points carefully; use them as an interview tool when you speak with the business development manager at the host agencies. Be sure to ask about any signup specials or discounts.
Making the decision to check your independence at the door can be very empowering. As my friend Joan said to me, "You've already proved you can go it alone. Why not let someone else do some of the work that you don't like or have the time to do?"
No matter how you look at this, you are making an investment of your money, your time and your future. Never fear, nothing is written in stone. If six months or even three years down the road you aren't happy with your host, move on. Find the best host for yourself and your business.
Happy Host-Hunting!
Follow me on Twitter@CruiseMaven
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