October 10, 2019 Blog

It sounds like a great idea to have a steady pipeline of people who are interested in travel delivered to your inbox. All you have to do is fulfill their wishes and you make money. Wonderful, right?

Unfortunately, the reality of leads is very different. In many situations the leads that you are getting are from people who are shopping several agencies looking for the lowest price. When you deal with what my dad called “tire kickers” you are going to do a lot more work for a lot less money. That’s fine if you are an OTA (online travel agency), but as a human being you only have so many hours in the day. So before you jump into a leads program here are a few things you need to think about:

Where did the lead come from? In most cases the leads come from your host agency. What you’re your host say about why a traveler should work with them? Is it service and expertise? Or lowest price and no fee? If the agency providing the lead is known for discounts and freebies, they will attract people who are only interested in the very lowest price and are shopping multiple agencies to get it.

How does a lead affect the commission split? For many agencies the commission split isn’t the same as if the client was yours. Sometimes it is a 50/50 split and sometimes it’s even lower. Make sure you ask the question. Some agencies also impose fees or restrict which vendors you can book for the clients.

Whose client is this? Most agencies consider leads to be their clients, not yours. Meaning that even if you rebook the clients in the future those bookings may also be subject to that lower split. Meaning you would constantly be working at a discount. If you ever leave the host agency those clients do not go with you and you would be prohibited to reach out to them and share your new information.

What’s the average closure rate? Of course, this varies from lead to lead and agent to agent, but every agency with a leads program has an average closure rate. They range widely from 10% to 60% (the highest I have ever heard). Let’s look at this another way: Between 40% and 90% of the time you spend working with these prospective clients is wasted. Even good salespeople don’t book everyone they talk to. And in some cases the traveler provided an invalid email or phone number and you can’t reach them, but that isn’t considered in figuring the closing rate. Many agencies will drop you from the lead program if you don’t maintain a particular close rate. Meaning that strategy you were using to build your business just got taken away.

But here is the biggest problem with leads: they give you a false sense of success. Being busy is not the same thing as being successful. You only have so many hours – and so much energy – to put into building your business. If you spend that time on leads that’s time you don’t have to spend on something else. Like marketing your business and building your brand.

It is really easy to feel like you are doing the “right” thing to spend all your time providing quotes to potential clients – especially when you are just starting out. But that doesn’t leave you any time to work ON your business. If you have your own travel business that means YOU are responsible for marketing and client attraction, not just assisting clients.

Bottom line: Leads are a numbers game and a great way to keep busy. But they aren’t always a great way to build your business since those clients aren’t usually yours and you make less money on them. And remember, staying busy doesn’t mean being successful. You are the boss now and you have to put on your CEO hat and work “on” the business, not just working “in” it.

By Sandy Saburn