In just a few days, the third quarter will end and we will be in the final months of 2019. How is your year shaping up? Now is a great time to look at your numbers and see how you’re doing, and make a strong push for business. Historically, election years – and 2020 is one in case you hadn’t noticed! – have lower sales because people are distracted and there is more uncertainty about the future. You can combat that NOW by encouraging people to go ahead and book their 2020 vacations.
But before you launch into a marketing campaign, take some to look at your numbers. Specifically, I suggest you look at these items:
- Vendor Mix
- Commission retained
Yield: I bet every agent reading this knows exactly how much commission your top vendors pay. But do you know what the yield is for those same vendors? Yield is the actual rate of commission you receive. Remember, every component of a booking isn’t commissionable. For cruises, there are the infamous “non-commissionable fares” that reduce the amount of the booking that is commissionable – sometimes significantly. And for bookings made with wholesalers, you have air and taxes that aren’t commissionable. While your commission rate with the vendor might be 16%, the actual yield might be closer to 12%. To find out the yield on a booking, divide the total commission by the total amount of the booking. You don’t have to do this for every booking, but it is important to know what your real numbers are.
Vendor Mix: Take a look at what you are selling. You should have a good idea of how much you are doing with each vendor. You might be surprised at some of the numbers. And when you look at this, also look at what your yield is with each vendor. Even when booking the exact same package, some vendors have higher yields than others. You work too hard to settle for a vendor that costs you money – so shop around! Ask your host agency for insight. They see all the numbers and can help you.
Beyond the numbers, are you selling what you want to be selling? Are have you gotten stuck focusing on products that you don’t want to be booking? Was your intention to move in a new direction? How’s that going? Looking at the numbers will help you see how you’re doing.
Commission Retained: Two numbers that many agents rarely look at are the total amount of commission they generated and then the total amount they were paid. Unless you are working under your own credentials, those numbers aren’t the same. To get the many benefits of being with a host agency you have to pay for those and most people do that through a commission split. But you need to keep an eye on that cost to determine when you need to move to a new commission plan. And as your business grows beyond $750,000 in sales you need to be on a 100% commission plan. That does NOT mean you are better off working under your own credentials. Unless your business is focused exclusively on a handful of vendors, you will make far less in commission by being on your own.
Many of you may read this and think, “I don’t have time for this.” You have to make time Block it off on your calendar. If you are an independent agent, you are a travel entrepreneur, not just a travel agent. And entrepreneurs have to pay attention to the numbers to make sure you are working smart, not just hard. In the long run, it will be very beneficial for you and your business!