The Elements of Sales & Distribution
Quality and Balance
Most leisure travel operators sell both direct to guests and through various types of representatives. Travel agents, travel advisers, travel sellers, tour operators, online travel agencies, and so forth are collectively known as “the trade.” Technology has removed most obstacles from B2C commerce and lowered transaction costs, putting more pressure on the trade to add real value beyond the transaction. either for guests in the way of advice and services, or to operators through market access and influence. A healthy distribution network is balanced and well-rounded, supported by a well-led sales organization and a thoughtful, analytical approach to resource allocation.
Channel Strategy
DIRECT - INDIRECT
Balancing direct and indirect distribution requires careful thinking and coordination. Left unchecked, vested interests can create biases, usually along organizational lines, resulting in disruption and revenue dilution.
Direct (B2C)
Inbound direct
Outbound direct
Online direct
Indirect (B2B) - Trade
“Brick & mortar” retail sellers
Online sellers (OTAs)
Home-based sellers
Tour operators
GROUPS - INDIVIDUALS
Affinity groups are a lucrative market for many operators, but it is sometimes difficult to separate the wheat from the chaff. Real groups form because of a close affinity, shared cause or interest, and camaraderie.
DOMESTIC - INTERNATIONAL
Pricing in multiple currencies is a common practice among global operators. It provides more flexibility in dealing with local market conditions and new segmentation options for revenue management. But the practice can be complex and potentially disruptive given the internet-blurred borders of international commerce.
Trade Strategy
AN ANALYTICAL APPROACH
In most global travel markets, retail distribution requires three levels of attention. Individual “front line” sellers typically have the most influence on customer decisions, but in many cases are directed, guided, or incentivized by their employing agency to favor preferred suppliers. Networks negotiate these agreements on behalf of member agencies.
Operators must allocate finite resources like sales attention, support, co-op funding and incentives among these three levels to achieve the highest sustainable ROI.
Trade Management
ACCOUNT MANAGEMENT
Alignment - strategy & objectives
Analytical approach - ROI focused
Vertical and horizontal org structure
People & capabilities
Training & support
Group development
Policies / Decision authority
Incentive compensation
SALES OPERATIONS
Field support
Back-office support
Reporting
Sales management CRM
Growth Opportunities
INTERNATIONAL
International markets are often a good source of quality, incremental demand and can be hedged against other sources. A crawl-walk-run approach is possible and often advisable. As engagement grows, issues like language, foreign currency (including the revenue management implications), legal regulations, distribution technology, and commercial terms will add complexity.
MEETINGS, INCENTIVES & CHARTERS (MICE)
For operators with suitable products, the MICE market can be lucrative, especially when investments are made in specialized internal expertise, product customizations, and direct sales contact with meeting organizers and incentive houses.
AFFINITY GROUPS
Affinity groups are a great opportunity for sales organizations to cost-efficiently find new business. The near-limitless possibilities are all defined by a shared connection or interest, bound by the spirit of like-mindedness and camaraderie. Although many opportunities arise through trade distribution, operators should consider direct contact with target organizations, brainstorming with marketing partners, and even suggesting ideas like family reunions to past guests.