Perhaps there is no more contentious subject between professional travel agents than when or whether to gift your clients. Ask any five travel agents what their feelings are on this subject and you are likely to get five different answers. Consider some of these factors before you make a decision on the precedent you wish to establish with your clients.
when was the last time you received a gift just for being a client?
I do business routinely with attorneys, accountants, bookkeepers, IT professionals, physicians and more. I've never received a gift from any of them just because I pay for their services. They are experts in their field, just as I am, and I have no expectation that simply by retaining them or even sending them referrals, that I should receive a gift. Conversely, they do not send me gifts in exchange for my business and I am sure it has never crossed their mind to do so (even for my birthday, wedding, or any other special occasion). While it doesn't always happen, the most I can hope for is that there is a degree of loyalty between us that might stimulate mutual referrals.
Are you already gifting your clients?
Think about this...are you already gifting your clients before they even depart for their travels? No? What about the luggage tags or the cutesy little document holders you sent them with their travel documents? Did you book excursions for them where the time factor for your work far outweighed the couple of dollars you will earn for doing it? Maybe, you didn't earn anything for a segment of the trip that you worked so painstakingly hard on - such as airline tickets that you didn't charge a service fee for, or for excursions and show tickets that are not commissionable.
Are gifts part of your marketing budget?
Do you consider gift-giving as part of your marketing budget or are you just sending gifts to clients because you think it's the "nice thing" to do? If you are incorporating your gifts to clients as part of your marketing budget, you must know what your return on investment (ROI) is. Have you calculated how much repeat business or referrals those gifts have brought to you? What percentage of your marketing budget are you spending on client gifts? Is it possible that spending your marketing dollars elsewhere may yield better results?
HAVE YOU CALCULATED YOUR EARNINGS?
One of the major weaknesses in our business is that most travel agents, despite being professional experts in their field, truly do not know what their costs are to do business. For instance, do you know how much it costs you to generate a lead? How much does it cost you in terms of hours expended to confirm a booking (translation: what is your actual hourly rate for doing the work you do)? What are your operating costs to do business (and yes, you have operating costs even if you work from home)? So, how do your costs compare to your earnings? Now, factor in what you want to spend on a client gift....did you make money from the gift or did you just give away your earnings? If you take the time to really determine how much you earn for your expertise, you may find that those client gifts are not as valuable as you thought they were. For the record, I've seen agents make $115.00 commission and spend $25.00 on a client gift. In the end, when you factor in all costs, the agent makes nothing and in fact, is likely losing money.
Where do I go from here?
None of this is written in stone. Each of us, as independent business owners, must make decisions every day as to what is best for growing our business. While I personally believe that client gifts are generally unnecessary, that doesn't mean it isn't right for you and your business. With that being said, I encourage you to think long and hard before establishing such precedents with your clients. Sending a beautiful honeymoon gift when the client spent $10,000 may have seemed like a good idea, but are they now expecting a gift (or are you feeling compelled to give one) when they take a quick getaway for $2,000 and your earnings are far less? The best advice I can give you is to truly know your costs of doing business and for every dollar you spend...know the return on your investment and always, always, know your value as a professional expert. This will help you make an informed decision as to where you want to go from here when it comes to client gifts.
Stacey Ray is the CEO of Groupit Travel Host Agency and Groupit Travel. You can contact her by clicking here.