TRAVEL Counsellors is breaking sales records, attributing this to a “highly differentiated business model” that allows the consortium to thrive in tough times.
“Travel Counsellors recorded its four biggest sales months in its 12-year history in South Africa this year. In July, sales were 16% higher than in 2018 and in August we broke the record again with sales growth of a further 13%. We are experiencing growth in both the corporate and leisure sectors and expect this to continue,” says gm of Travel Counsellors South Africa, Mladen Lukic.
“In the current trading environment, most of our competitors are reducing costs to maintain market share. That then reduces the quality of service to their customers. This often comes with even stricter enforcement of preferred partner strategies to boost income. Contrary to this, Travel Counsellors’ strategy consistently focuses on achieving the best possible outcome for the client and never restricts customers to a limited number of supplier offerings,” he says.
Don’t fixate on price. It’s tempting to compete on price in difficult economic times, but this is to the agency’s and industry’s detriment, he says.
Mladen says, while price is important, it’s the overall value proposition that is key. “Fixation on lowest price point is to fundamentally misunderstand sensitivity to price in depressed market conditions,” he says.
He uses the analogy of shopping for shoes to explain why this business model works particularly well during periods of economic recession: “Imagine your child needs a new pair of shoes but you have a very limited budget to spend. In the past, when you were more cash flush, you may not have been as invested in the process of purchasing shoes and may have bought the first pair that you came across.
Quality is important “Now that your budget is limited you are more likely to put effort into making sure you buy a pair of shoes that will last. It is in difficult times that a customer seeks an environment where they are certain they can trust in the quality of their purchase. They may even be willing to spend a little more than they did on their last purchase to ensure that they achieve the best possible outcome with their limited means,” he says.
From a corporate perspective, Mladen says TCs’ architecture (a large consortium made up of a collection of small businesses) means better service. “Counsellors can be more precise and agile, reacting to a situation in minutes.” The Travel Counsellors business model is showing outstanding growth, not only in South Africa, says Mladen.
“Our UK business is exploding in an environment where Thomas Cook has just imploded. Sales are up 10% and we expect to close our financial year with sales of £652 million (R12,44bn) for our 15th year of consecutive double-digit growth. As long as we continue to maintain our genuine and honest focus on the customer, we will see customers moving over to book with us. The tougher the times, the more discerning the customer and in today’s world trust is in short supply,” he says.