Canadian expert tells agents how to soften the fees blow

 

 

 

 

 

 

 

 

 

 

 

Journal: TWUK	Section:
Title:	Issue Date: 17/04/00
Author:	Page Number: 5
Copyright: Other

 

 

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Canadian expert tells agents how to soften the fees blow

 

British Airways held a series of seminars for agents in London, Manchester and Glasgow on how to introduce management fees. Jane Archer reports

Business travel agents will need to have at least three meetings with their clients in order to explain management fees before they begin to accept them, Canadian expert Nolan Burris warned.

 

"Fees can be shocking at first because they look so high. After the first meeting when you tell them the size of the fee, you need a second meeting to talk through the details. Then they start to accept it and can see the sense of it. The third meeting is just finalising the details.”

 

He urged agents not to undersell themselves when working out the management fee.

 

"Think what service you are giving for the fee,” he added.

 

Burris, who was brought over from Canada by British Airways to help agents introduce fees, urged them not to undersell themselves and said that fees were the best way forward.

 

"Charge a fee then you are reliant on no-one,” he added.

 

Burris argued that agents would gain better profits by charging management fees than they would by taking commission and then charging a service fee on top.

 

He gave a number of examples to demonstrate that agents would increase their revenue by introducing a straight fee.

 

Meanwhile, BA admitted it is under a moral obligation to help the trade adjust to the abolition of commission.

 

General manager field sales Ian Heywood said: "We will not be responsible for putting agents out of business if they don't change, but we have a moral obligation to help them adapt to the change.

 

"Zero commission was coming but we have probably speeded up the process.

 

"Agents who do not change will find that life will become more difficult.”

 

Heywood emphasised that Burris was independent, although BA had paid his fee.

 

"He is saying things that BA doesn't necessarily agree with,” he said.

 

Some 650 agents applied to come to the free seminars, of which 450 were confirmed and 200 were put on a waiting list.

 

As demand was high, Heywood said BA could bring Burris back at the end of next month for another series.

 

The airline is also planning more leisure-oriented seminars for June.

 

Burris:explained to agents the differences that management fees would bring to profit levels

 

 

Dealing withmanagement fees

Consultant Nolan Burris gave advice on how to introduce fees:

 

n Understand your agency's financial profile.

 

n Work out your agency's revenue, with and without the account.

 

n Assess the impact of the account on your global reservation system fees. You may be getting free access now, but have to pay with the extra business that comes with a new account.

 

n Assess the expenses to service the account.

 

n Find out if there are extra management reporting requirements. You may need to buy a system that can do it efficiently.

 

n Work out how much time the agency spends on non-revenue transactions.

 

n Analyse whether you will gain money on the account, or what effect the account will have on the profits.

 

n The figures produced will give a guide on what fees to charge. This can be commission plus service fee, or a management fee, with commission – while available – returned to the account.