Guest Focus - Tour Business Coaching’s Post

Transcript

But when done properly, this profit boosting technique is actually a win win. It provides your customers with more flexibility and more options to get Peace of Mind knowing that if their plans change, they're covered. Also giving you a nice revenue stream to add to your bottom line. Hi there, Kelsey Toner here, the founder of Guest Focus Tour Business Coaching, where everyday myself and our team of experienced coaches are helping you build a thriving, profitable tour business. Welcome to the first video in our series on maximizing profits in your tour business. Across these eight videos, we're going to be sharing insider tips and best practices for boosting your bottom line. Today we're going to start with trip protection, an incredibly easy way to boost your revenue. At the same time having minimal overhead or additional costs. So what is it? Well, trip protection is an optional upgrade or one click upsell that you can add during your checkout process or you and your team can sell it over the phone. Essentially it gives customers a more flexible cancellation policy where they can get a full refund, let's say up to an hour before the tour starts or 30 minutes beforehand. Most booking software companies will allow you to add this manually as an order bump or sometimes called a one click upsell. This is pretty important. If you want to maximize the number of customers that opt into this, i.e. boost your profits as well as making it really easy for customers to add to their booking. The nice thing about trip protection is that you as the business owner ultimately have complete control over the structure of this optional upgrade. Think of trip protection as an optional upgrade to your existing cancellation policy for those folks that might be a little bit more risk averse or there's a higher chance they might have to change their plans. But here's why this is so compelling and effective for you as the tour business owner data that I've seen shared from Booking. Software companies who are rolling this out with operators around the globe have consistently seen that refund rates and cancellation rates don't increase. The people that are going to cancel or refund or no show are still going to do that. We're not seeing rates go down at all, but the majority of people who will buy or add this extra opt in will not end up using it, allowing you to keep this extra revenue. So when done properly, this profit boosting technique is actually a win win. It provides your customers with more flexibility and more options to get Peace of Mind knowing that. If their plans change, they're covered also giving you a nice revenue stream to add to your bottom line. But let's take a look at how this is implemented in the real world. This is one of our coaching members, Kailani Tours on the Big Island of Hawaii on their Volcano Explorer daytime tour. If we Scroll down to the bottom just above where they pay, you can see here the add trip cancellation protection. And you can see here that this is an opt in or opt out. With one click, we see the shopping cart order value. Note the language purchasing trip protection allows you to cancel or reschedule. Their tour at any time for any reason up to one hour prior to trip departure, you'll be reimbursed for the full amount of each ticket less the cost of trip protection and processing fees. This is an excellent implementation of this trip protection and take a moment to pause and look at that exact language how we're very clearly showing the value that's being offered. Now Kailani tours and only has a 48 hour refund window before their tour. But with this one click upsell. We could easily add that to their cart. We're providing them that extra Peace of Mind. Now it's important to note that this service should not be called. Insurance, as selling insurance is often highly regulated in most countries around the world. Instead, we highly recommend you use terms like trip protection, tour protection, activity protection, but do not use that word insurance. This way you can have similar benefits like more flexibility or the ability to offer more generous refund policies without having to navigate the complex world of insurance licensing. As always, I'm not a lawyer and I don't pretend to be one on the Internet. We always recommend that you get legal advice to ensure that you're compliant with any laws. It might be relevant to your business or your jurisdiction. Let's quickly run through five best practices. The first is 15% as a recommended fee structure. Now you can charge whatever you want and booking software may give you the option to have this be a flat fee if you prefer. Our recommendation is 15%. Data shared by Fair Harbor shows that about 15% of the total cart value or the per ticket price is that sweet spot between having a good number of your customers see the value and ultimately choose to add this protection. Above 15%, we start to see a drop off. And customers don't see as much of that value. We've seen similar data shared publicly from Waive Res as well as Thomas Marketing Intelligence who say this 12 to 15% really is optimal for your business. Secondly, transparency is key. Do not try and trick people into this upgrade. We want to present the options clearly as an optional upgrade to the existing cancellation policy. You should definitely have this on your core to our sales page as well as in your FAQ. Three, consider stricter cancellation policies one of the big levers. That tour operators have when adopting trip protection is that you can make your existing cancellation policy a little more strict to increase the perceived value of this upsell. Also, if you have an overly lenient cancellation policy, like hey, you get a free refund up to 24 hours before and the trip protection is only really adding an additional 23 hours of coverage, your customers may not see the value in that upgrade #4 test. Opt in versus opt out. Now with any order bump, you can have the default to have it selected. Were not selected, meaning will people have to opt out of trip protection or will they have to click it to add it to their order? Now as you can imagine, the data clearly shows that if you have an opt out policy, then you're going to see a much higher adoption rate. So this is worth testing, but also assess customer feedback and #5 really sell this add-on. Meaning add things like highly recommended in brackets under the trip protection area of your checkout page. Also consider adding a short customer testimonial of someone who really appreciated that extra value offered by the trip protection. OK, so maybe at this point in the video I've convinced you to give this a try, but what sort of real world results should we expect? Well, let's run some numbers. Let's say you run a Tour Company where your average ticket price is just $50.00 and you have around 10,000 customers. Over the course of a season, that would make 15%. Let me check my math here. 15% of that $50 ticket would be roughly $8. So let's say we even have a relatively conservative adoption rate of around 5%. That would be an extra $4000 of revenue. Coming to you as the tour business essentially as pure profit with minimal impact on your refund rate. Some of the tour businesses and our coaching program that are doing over a million a year in direct sales have reported that since implementing trip protection, they're earning over $3000 a month in essentially pure profit just by implementing some of these best practices. Another water sports operator shared with me that when they made their cancellation policy more punitive for their Sea Doo rentals and they added a default on in terms of trip protection, allowing people to cancel right up until the last minute. They saw as high as a 75% adoption rate as well with Sea Doo Rentals. This is a higher ticket item and was leading to a lot of extra revenue in their tour business every single year on autopilot. As always, it's important to approach this profit boosting best practice from a place of service. Genuinely try to balance the value offered to your guests with your own desire to grow those profit margins. OK, there you have it my friends. Our first insider tip in boosting your profits. In the comments below, let me know, are you using tip protection presently? How have you got it set up? And if you are not yet using trip protection, set some time in your calendar this week to get this set up and running. Look, if you're enjoying this video series and these tips, it would mean the world to me if you could share this with a friend or some of her colleagues here in the industry. Thanks so much for being here and I look forward to seeing you in the next video with another profit boosting tip.