Comment: Putting price in its place
Putting price in its place, by Larry Pimentel, president and chief executive of Azamara Club Cruises
Has this ever happened to you? A client asks for the best travel deal to Spain. You spend an hour price-checking two dozen packages, not once talking about the experience of Spain. Your client chooses the cheapest option. A great price? Yes. A great holiday and loyal future client? Not likely.
The price of a holiday is important. Nobody wants to overpay, including your luxury travel clients who may question cost and amenities just as carefully as anyone else. But you work against your clients’ interests and your own best interests when you let price become the main focus of the sales discussion. Here’s why:
• When a sales discussion focuses on low-price and something later goes wrong on the holiday, the travel agent is often blamed for a low-quality product. The agent’s reputation is now at risk among a larger pool of clients and social media sites.
• You’ll find deal-shoppers at every income level, including the up-market and luxury tiers. These people tend to remain loyal to the lowest price, not to the seller. They will walk away in a nanosecond if they can get the same product for less. Why waste your time if the best deal is their only objective? You will lose these clients in any case.
For luxury clients (the top 5% of the market), the discussion has to be different. They want the best quality, not the lowest price. It goes without saying that your upmarket clients expect a premium price to reflect a premium experience. They want travel experiences that are exclusive, authentic, localised and distinctly memorable. Most of all, they want to feel genuine connection with local cultures and people. Today approximately 45% of luxury spending worldwide is experiential, including travel and hotels, technology, alcohol and food.
This is why the agent’s most important role is to interpret value, not price. Price is simply a transaction. Value is what your clients get later, when promised benefits are delivered. Remember, your up-market clients have come to you (usually after internet research at home) because you add value to travel decisions through your knowledge, experience and know-how. They need your help to select the right holiday with the premium value they expect.
In fact, value is so important that it often far outweighs price considerations in many purchasing decisions. If you had a medical ailment, would you look for a doctor who charged you the least? Would you choose the lowest-price item on a menu? The cheapest lawyer? Many women remain loyal to a particular salon or hair stylist for years, regardless of price. Value-based choices are driven by quality, brand and relationship loyalty.
For the travel agent, connecting price to value requires a keen, concise knowledge of your products and their fit with each individual client. It is up to you to explain the experience and set appropriate expectations. You should be able to say, “I know that you love (flowers/wine collecting/rare books/modern art). If you are considering Spain, I would recommend XYZ. I think you’d love it.” The importance of price fades as the experience comes into focus.
• Address price head-on.
If you have clients who are motivated by low-price, don’t be shy about explaining why the product may be a bad fit. Make sure your clients understand the trade-offs between price and quality, because nothing compensates for an inexpensive holiday gone awry. Offer feedback from recent client experiences, colleagues, social media mentions and word-of-mouth. Common sense works, too: “Given the spectacular scenery on this voyage, you won’t be happy with an inside cabin.” That may change their minds. If not, they will remember your advice and trust you the next time.
• Sell what works.
Your role is to help your clients make the best buying decisions. This is why they need you. Don’t try to sell a holiday because it’s expensive or low-priced, but because it’s right. Romantic holiday with the spouse? Family holiday with the kids? Same client, different products. Don’t hesitate to sell a non-premium product to a luxury client if it’s the right fit. Always qualify and re-qualify your clients. Ask questions, and they’ll see that you’re interested in leading them to the best choice.
• Develop a relationship.
When we want to work with the same people again and again, it’s because the quality of the relationship is equal to (or exceeds) the value of the product.
When I first became a chief executive, a local California newspaper printed an article about my family. It meant a lot to me because it made my parents proud. But someone else was paying attention. I soon received a call from a local Mercedes dealer I had worked with on one previous occasion. “Congratulations,” he said. “I notice you have a longer commute. I just want you to know that when you need to get your car serviced I’ll come to your house to pick it up, provide a loaner or give you a ride to the station. When you get back we’ll have your car ready and delivered to your home.”
I bought three more cars from him. I could have purchased those cars from other dealers, maybe at a better price, but he recognised and acknowledged my value as a customer. It was an unforgettable sales lesson.
In sum, never try to sell on price alone, particularly with your top tier clients. Price-based selling makes for a flat, boring sales pitch and does nothing to build relationships. Instead be a good listener, assimilate what your clients tell you, and at the end of the day be prepared to make a recommendation. Your expert guidance is why your clients want to work with you. And that’s much more valuable than being a huma