Keep your eye on the ball, there’s money on the table

BOB MOWAT

Pictured above: Lindsay Pearlman on stage with the local Make-A-Wish family. Through a raffle and live auction, an all-time high amount of $152,000 was raised at the Ensemble conference in San Diego.

In the final part of a three-part series on Ensemble Travel, CTP’s executive editor, Bob Mowat wraps up his conversation with Lindsay Pearlman and learns how agents are driving value to their customers.

So the question arose during CTP’s conversation with Lindsay Pearlman as to whether Ensemble Travel’s members are “change adverse” or “change embracing.”
It was another question that made Pearlman smile, before he responded with a cryptic: “Yes.”
Asked to expand his answer, he explained: “Look I think human nature is adverse to change – so that’s your baseline. Then you accept the fact that they’re, if you look at the individual, it depends where they are in their cycle. You know the reality of it is that if somebody is 70 and they want to cycle their business out, they go okay, I know what works for me. I’m going to run this for another five years, so do I really want to go through a wholesale change – probably not, right. And we’re [Ensemble] built for that, to allow that to happen.”
But Pearlman continued: “For the organizations that are running bigger businesses, that are far more progressive, they’re looking for us to make those changes and that’s where a lot of the technology driver is. You need to help me stay relevant. You need to help me on incremental revenues and driving out operating costs. So they’re pushing us. So hence my answer – Yes.”
In this respect, Ensemble’s co-president said that: “There’s product and there’s process. A lot of the technology and a lot of the change is product. But are you building the process around it to make it effective – that’s where most of this stuff falls down. There’s such rapid change that sometimes people are just sitting back and saying where’s this going to fall out.”
Pearlman told CTP that: “If you look at the mindset of a traditional retailer or an OTA and how, let’s say a tour operator, approaches each [one], I think the mindset from the tour operator is now different. There’s a recognition that each [one] serves a distinct role. The OTAs do one thing, right, but if you go back three years, there used to be this whole discussion about ‘Oh, we’re [the tour operator] going to cut out the retailer because we’re going to go direct. You don’t hear that conversation happen anymore. Now, it’s like, yeah, a certain percentage is going to go through here and a certain percentage is going to go through here – there’s enough for everybody.”
He explained further that: “If you’re looking for commoditization of product and you’re a retailer that’s in the commoditization business then you’re going to be competing with Expedia. So the question becomes, do you want to compete with Expedia? If not then you have to make sure that your model doesn’t reflect that – product versus process. And for guys that have embraced it, we have some of our members doing better now, with better margins then they ever did before in the days of 15% at source commission from the tour operators.”
As for how the agency community is changing, Pearlman told CTP: “If you survived the recession, you’re successful. The recession, for lack of a better term, thinned the herd. The successful travel agent knows they have to evolve. Now think about it in these terms, if everything else around you is changing; if consumer behaviour is changing; if there’s new product out there; if there’s new locations that people are going to – this is all change. I’m not talking about technology, I’m just talking about marketplace changes. If that occurs, why is it okay for you not to change.”
Continuing that thought, Pearlman said: “Some people think they don’t need to [change]. Personally, I think that if you don’t [think you need to change] you’re in trouble. Just look close to home, there’s so much new cruise product out there, and you really have to educate yourself and understand it. There’s new insurance products out there, you need to understand. There’s competing factors out there that are having an impact on change of product that you need to understand.
As Pearlman sees it, “understanding that is what’s going to drive value to the consumer because the box that we know as the Internet – regardless of how many questions that it can ask you – can never have a conversation with you. So, if there’s change in the market and you’re consulting with the consumer and you can say to the consumer that’s where it was last year, but that’s not what it is this year and this is better for you based on what your needs are, that’s what brings value.”
And he added: “The Expedias of the world will commodotize and transactionalize the product, but it’s the travel professional who is going to bring value. I like to say that it’s all about the right product, for the right consumer at the right price – that’s [what] defines value. It’s not the cheapest.”
On how the customer is changing, Pearlman told CTP: “You don’t really have to look any further than yourself. We always freak out about ‘what’s the customer doing.’ But here’s a news flash – We’re the customer. You know it’s nice to look at the fancy marketplace reports and all the rest of the stuff, but you really don’t need to look further [than yourself]. Our fears are the same fears as the consumer. Our aspirations are the same aspirations as the consumer. And this goes back to evolving. If you know that people, for safety reasons, want to go to Ireland or Portugal or want to travel domestically, you better learn the product that they’re interested in at the time.”
Pearlman also pointed out that this isn’t new, but “the trick is anticipating what’s next because if you can anticipate what’s next and have a comprehensive understanding of that, then when the consumer is ready to be there, you’re going to be the expert.”
So, with all this talk of anticipating what’s coming next, the obvious question is what’s going to be the “Next Big Thing” in travel.
As Pearlman sees it, it will be all about evolution.
“I see technologies impacting the experience, but I wouldn’t say there’s going to be this: ‘WOW, like this totally changes everything.’ But then again, if I did, I probably wouldn’t be on this side of the desk. People are people. Even from a consumer perspective, consumers as we all are, need to evolve into things. So we’ve seen great product and evolution that’s, you know the old saying that’s before its time. But the biggest financial mistake [you can make] is doing something before its time. You want to evolve into it.”
So what’s the take home? What’s the message for Ensemble members or, for that member, for retail agents in general?
Well for Pearlman, it’s pretty simple: “Keep your eye on the ball. Be flexible in adapting to different market and/or product changes. And lastly, there’s money to be had.”