Embrace tiered payments and enjoy the ride – Comment by Jeremy Skidmore
About a year ago, Cadogan Holidays managing director Gary David was roundly criticised for mooting the idea of tiered commission payments.
David didn’t even suggest cutting base commissions – he just wanted to give a bit extra to those who supported his products.
Now the big tour operators, panicked into making cuts after a poor year, have decided they will tier payments. Don’t expect the poor performing retailers to get anything like what Gary David would pay them.
Anyone who didn’t see this coming needs to wake up to the realities of selling travel in 2004.
The independent consortia do a lot of excellent work but their main problem is that they want the same payments to all members but refuse to instruct them to toe the line on sales. In other words, they want to be paid like a multiple without acting like one.
Not surprisingly, the big tour operators will no longer stomach this approach. Why should they? Why does a poor performer deserve the same as strong, focussed agent who delivers sales on a regular basis?
We wouldn’t accept this approach in any other area of our work. Do independent retailers pay the same salary to their most experienced and productive staff as they do to a school leaver learning the ropes? I don’t think so.
Of course, the consortia don’t want tiered payments. Their very existence – and some cosy jobs at the top – are threatened if operators can cherry pick agents and work direct with them.
But strong performing agents have nothing to fear from tiered payments. Instead of getting underpaid in some areas and overpaid in others, they will be rewarded according to their performance. The only ones under threat are weak agents or those who have yet to work out their niche and decide which companies to support.
Independent consortia can also have a big role to play, but they need to restructure the way they work and encourage agents to sell to their strengths. Instead of fighting for all members to get high commissions from Bloggs Holidays, they need to campaign for those who actually produce for Bloggs.
You can’t halt progress. Just ask former ABTA president Stephen Bath, who once famously advised agents to invest in new carpets rather than joining the technology revolution.
Agents must decide who they want to support, pin their colours to the mast and enjoy the ride.
Phil Davies
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