Can you compete with Costco Travel and other membership clubs? Part 1

As many of you know, I have had the pleasure of working the front lines of travel sales as well as in executive sales roles with two major travel franchise groups and supplier executive. As a result, I often look at opportunities from a different perspective and have contrarian views to many of the leaders and gurus in the industry.

One such view surfaced during a recent conversation with a friend of mine, also in the travel consulting business, about the proliferation of membership clubs selling travel. He was of the opinion that the average travel agent simply can’t compete with them, so why try.To that, I stated most agents can go up against them, in fact I have been successfully competing with these clubs for years.

In the 1990s and early 2000’s, Sam Club Travel was the dominate force in member travel sales. Sam’s got out of the travel business (they have recently reentered the arena) and the dominate player in member club travel sales is currently Costco Travel.

It’s not just the warehouse clubs competing with you for the business. Its AARP, time share exchanges, travel clubs, MLMs, and others. So how can you compete? After all, they seem to have unbeatable deals that you can’t touch -or can you?

First you need to understand why your prospects, even long time customers, reach out to these organizations to begin with.

Travel is not their primary product.Costco, BJs, and Sam’s all have their warehouses. AARP is a lobbying organization to help protect the rights of retired people. AAA (and CAA) are auto clubs. Travel is just one of the many benefits these and other clubs provide for their paying members.

Suppliers like these clubs because they are “closed” groups, meaning you must join in order to receive benefits. As such, they are able to offer incentives not typically available to the general public. For example, have you ever tried to book a hotel and the reservation agent asks if you are a AAA or AARP member – these club rates are a benefit to these closed groups. Think about it, many of us are already members of these organizations. While we may not use the travel benefits – we do take advantage of many services they offer.

There are three primary reasons your prospect contacts their membership clubs:

1- They are curious. Travel is often featured in the club’s monthly magazine or newsletter. They haven’t paid much attention in the past, but now they are planning a vacation- they want to see what their club membership can offers in the way of benefits and how it compares to the package you offered.

2- They paid for the membership.As a paying member, they want to feel like they are getting their money’s worth.I have been an American Express Platinum Cardholder for 25 years. Sure it cost $650 a year, but I get SBCs when we cruise, roadside assistance and towing free (I’ve used this.), hotel upgrades, airline club membership, Global Entry reimbursement, etc. These are many benefits for which I feel I have paid. I want to feel like I am getting my money’s worth by taking advantage of as many as possible. Your prospects feel the same way about their memberships.

3- They were referred by Friends or Family. Most of these clubs have their own call centers or they farm the benefit out to a large travel company who “white labels” their services. In most call centers, the agents may not necessarily be well traveled, but they are very well trained. So don’t ever discount their knowledge and service. In fact, many of their friends and family may have had very good experiences with agents from these clubs. As we all know, the best prospects usually come from referrals.

Knowing why your prospects reach out to their member clubs is a big step understanding how to best serve them. They often do not realize each time they call about their vacation, they will get whomever happens to pick up the phone as opposed to you, a dedicated resource solely focused on providing for them the best vacation experience possible.

This month, we have answered the "why". In part 2, next month I will show you how you can win the business by following just a few simple steps.

Dan Chappelle specializes in helping travel professionals and organizations achieve their full potential by thinking BIGGER, working SMARTER, and producing greater RESULTS.

He is in demand internationally as a professional sales coach, business advisor, author, and speaker, with a focus on strategic business development in the travel agency sales channel.

His training and consulting firm, The Wealthy Travel Agent, develops sales oriented business leaders. In addition to working with home based entrepreneurs, his corporate clients include AAA, Cruise Planners, Ensemble Travel Group, and Travel Leaders. His book, Get Your S.H.I.P. Together: The Wealthy Travel Agent Guide to Sales, is available on Amazon.com.

For information on Dan’s educational and sales programs, visit: www.WealthyTravelAgent.com

©2017 Dan Chappelle, CCI Inc.