As a travel industry professional you know how complicated the process of creating and booking a multi-stop destination itinerary can be. The key to selling travel successfully (profitably) is to have a simple system that minimizes your cost of sale (travel software will help), whilst increasing your conversion rate.
Below are 5 tips for creating a simple system that will optimize your sales conversions – but before we launch into this, here is a bit more detail on conversion rates and cost of sale in travel.
Conversion Rates and the Cost of Sale
Do you know yours? Your conversion rate is the percentage of quotes that convert into sales. The number should be as high as possible. 100% – imagine that! Every quote converting into a sale… Nice but unlikely. The cost of quoting cuts into your profit so you need to know your conversion rate to calculate the cost of sale.
Divide number of conversions by number of quotes to get a percentage
ie. 75 sales / 250 quotes = 30% conversion rate
There are a number of factors that impact on your conversion rates (including pricing and how well your marketing pitch aligns with your product range), so there is no magic number a business should be aiming for. All travel businesses should be trying to increase their conversion rate, thereby minimizing the cost of unconverted quotes. The more expensive a quote is to produce, the higher your conversion percentage needs to be….
Cost of Unconverted Quotes
Every quote that doesn’t convert into a sale, costs your business money. To calculate how much your business spends on quoting, take the average time your reservations team takes to create a quote, along with their hourly wage. In the example below, we have gone with 2.5 hours at a wage of $16/hour. If you have never calculated your cost of sale – be prepared for a shock.
If each quote cost $40 (2.5 hours at a wage of $16/hour) the cost of sale is $133 when your conversion rate is 30%
(($40 X 250 Quotes per year = $10,000) / 75 Sales = $133)
Increasing your conversion rate by 10% brings the cost of sale down 25% to $100 each.
(($40 X 250= $10,000) / 100 = $100)
Conversion rates are incredibly important to the bottom line of a business. A high conversion rate indicates that your sales team is doing something right and a lower cost of sale ensures profit margins will be easier to achieve.
5 Simple Tips to Sell more Travel
There are 5 key elements to a simple system that will optimize your sales conversion:
- Quote quickly
- Produce quality quotes
- Follow Up, Follow Up, Follow Up, Follow Up, Follow Up
- Don’t make mistakes
- Nurture repeat and referral clients
There are 2 tasks here – quickly responding to new requests and responding with an actual quote. Your autoresponder should tick the first task. Thank the new lead for requesting a quote and explain your quote process from here. Include expected quote timeframes and ensure your auto-responder takes into account any upcoming weekends and public holidays. I also like to mention ‘this message is an auto response and we will manually check your response’ in the email so that the recipient is as informed as possible.
A good auto-response is the easy part though. Quoting for long multi-day itineraries can be time-consuming. Ensuring your system creates quick quotes will keep you ahead of the competition and maximise your conversion rate. Using Tourwriter to create quote itineraries ensures a 15-day multi-destination itinerary can be created in 15 mins from whoa to go. This can be even faster if the itinerary is based on a previously used package and only the dates and quantities need to be updated – in this instance, you can be quoting in under a minute. Many in travel think the cheapest quote wins when more often it is the quickest. However, even the quickest of quotes won’t get converted if you are just scribbling a price on a piece of paper. It still needs to be accurate, nicely presented, and meet the needs of the client.
Produce Quality Quotes
It isn’t all about speed. The aim of a quote should be to convince the reader that a particular tour operator will provide them with the best holiday. To do this you need high-quality imagery and great publishing content that is crafted to your target market. This can be very time-consuming (I wrote a blog post recently on this) but vitally important. I cannot emphasize enough how important quality images and carefully crafted content are to converting more quotes. We have clients creating itineraries with links to maps, video content and social media because that’s what gets their clients responding. Content should be personalized to your niche market. Simply cutting and pasting hotel descriptions from websites leaves you sounding just like every other website. You need to stand out, to differentiate yourselves, to ensure you provide a reason to book with you.
If that sounds too time-consuming for your business then consider your competition. If your quotes compare on price and inclusions but your competition’s quote looks better, whose quote will convert? Bad quotes convert badly. If you think your quotes could be improved get in touch today.
Follow Up, Follow Up, Follow Up, Follow Up, Follow Up
Did you know that ‘80% of sales are made after 5 or more follow-ups’? How do you compare? Do you even follow up? A follow up does take time but after investing all that time and money in quoting, following up could be the critical element that increases your conversion rate. You can easily double your conversion rate with a timely follow-up. I find the biggest obstacle to timely follow-up is, well, time. Many traditional tour operators spend so much time quoting there is always a backlog of quotes to get out. Making more time means either hiring more staff or just quoting quicker.
Don’t Make Any Mistakes
Mistakes in travel can occur and will negatively impact on the cost of sale. We are human and planning multi-day itineraries can be ridiculously complicated. Minimise the risk of human error by ensuring your itinerary building software integrates all financial components. Most travel mistakes occur when you are moving data from one platform to another. If you are (ignoring how time-consuming this is) creating itineraries in Word, then by creating the financials in Excel there will always be room for error. If you quote right the first time your prospect is more likely to convert. Ask yourself, could we better minimise mistakes?
The biggest mistake is having a high-cost quote. If you are spending more than 15 minutes building image-rich, high quality, quotes then your cost of sale is higher than it should be. Even at $15/hour, if it takes 4 hours to build a quote that is $60 off your profit.
Nurture Repeat Clients and Referrals
It amazes me how much businesses spend on advertising for new business, compared to the spend on engaging with old business. The best way of driving new business is to actually look after your existing clients and then make it easy for them to travel again or refer you to a friend. The key is to make it easy for your clients to share your business details, your website, newsletter and blogs.
At the very least you should invite your clients to receive your blog (if you don’t have one you should), updates, and special offer notifications. To maximise conversions use a CRM to categorize your clients (and leads) to ensure they receive the most relevant updates. You should be building a database of relevant details enabling you to build a picture of your database members activity.
Many tour operators (due to their type) have clients who might never travel with them more than once. Even if they’re not going to make a repeat booking with you, they can still be useful. The obvious referral is a client talking to a friend. More often a mention on Facebook or a retweet could be all it takes to generate a new sale.
Work on the Business rather than in the business
It’s always hard for a business manager to step back and spend some time working on the business rather than in it. This is especially true for tour operators and travel agents, many of whom have small teams of staff and large workloads. But if you can prioritize some time towards setting up your business so you can quote quicker, smarter and more accurately, prioritize follow-ups and facilitate client referrals, you will reap the benefits in the long run. Tourwriter can help, contact us to find out how.
Travel Software will create efficiencies
Tourwriter enables you to better manage your supplier database creating a simple system allowing you to maximise your business returns. Get in contact today if you are interested.