Value trumps price any day of the week

Three weeks ago Martin Lewis, of moneysavingexpert.com, created a furore by advising customers should haggle to reduce the amount of commission that travel agents' earn. Martin is famed for his views and makes no excuses for his advice on how to get the cheapest price for any product.

Yesterday Thomas Cook announced a new service that delivers a tweeted holiday offer just by the customer sending a tweet.

In Australia "Helloworld", the new controversial Jetset Travel Group agent rebrand, pushes a multi-channel approach to selling which in effect competes against its own bricks and mortar agent offering. Just as both major operators, TUI and Thomas Cook cut out the agent whenever they can, even their own.

In an off-hand remark now clarified as a jest, Qantas chief Alan Joyce suggests customers should book direct with the airline as it's cheaper.

Since the industrial revolution, commoditisation and "stack it high, sell it cheap" has been the holy grail of most businesses. Thirty six years ago when I first started my travel agency, the agent had, apart from a very few exceptions, the monopoly on access to booking systems. It was the skill of the agent to search for what the customer had decided to book. The advised ground-breaking technique then was to engage with the customer, but woe betide any customer that hadn't decided on a destination as they were dispatched like a beast of burden with as many brochures as they could physically carry. They were asked to choose and phone with their choices so the agent could use their searching skills to deliver their choice.

Technology has not only allowed customers to self-book but has allowed access to more choice and with these two virtues the inherent problems that these advances bring. Customers now need and seek good advice to help and validate their choices. They can book their own travel arrangements but what to choose and who to trust, not "the what" but "the how". Social media has tried to fill this gap but this, in turn, has been populated by companies that lack impartiality, as Tripadvisor, Facebook and other internet icons fund their service by selling ads.

So the likes of Martin Lewis et al miss the point, as a travel agent's job has moved from searching to be the trusted adviser - someone who a customer can trust for impartiality, someone who cares to deliver exactly what suits the customers' needs. Someone who reassures, someone who ensures that the hotel reservation definitely exists and endeavours to make sure the room type is available as booked. Someone a customer can trust not to lose their money, to help if there is a crisis. All these services have a value and are valued by the customer. Maybe Martin Lewis and others do not value these services as they themselves are competent to navigate in a crisis, but many customrs buy on value and not on price. They see the value of an agent, not just the price of the travel arrangements.

Today we look to the customisation of services and products, and technology cannot by itself deliver the emotion and caring that is needed.

Niraj Dawar is his book "TILT, Shifting your strategy from products to customers" highlights the importance of 'how' rather than 'what'. See this video - http://www.youtube.com/watch?v=qZo3uZyJsDE 

Over the last few days the UK industry has seen the unfortunate demise of On Holiday Group, a bed bank that sold through the trade. What does a customer do that is left without a hotel booking, those who booked across the internet are in many cases not financially protected, may have paid for a flight and may now have to find new accommodation. What price is a travel agent's help now? What value would a customer put on that service?

Paraphrasing Rolf Jensen, the author of Dream Society, "companies will need to understand that their products are less important than their stories".

Ironically those agents that sell on price are the ones that are being culled by customers. These agents offer nothing more than the customer can get themselves. The age of caring, trusted travel agent and adviser is more relevant now than ever, be they at home, bricks and mortar or high street. But they must realise it is not the 'what' they sell but the ' how'.

Value trumps price any day of the week and will become more important as customers find fewer and fewer trusted friends. Those that create value have every right to charge for it.