Need More Advice on How to Get More Inquiries… And the bags of coffee go to… Tommy Galan & Max Waugh!!!!
Tommy suggested that we “give the Costa Rica Expedition guest an opportunity to make the recommendation in the moment, while still entranced by the magic of Costa Rica, and the quality of Costa Rica Expeditions.” Great idea. Since it will take a little time to implement, and I was going to Tortuguero anyway this weekend to get Video for a first anniversary update of the Words Adventure, I asked some of the guests at the lodge to allow us to record their impressions of the experience. At some point we’ll be loading the videos on You Tube and asking for your comment
For now, please help me think through a question that Max posed. “Would you go so far as to offer greater incentives to your past guests for referrals?” I’ve dealt with other tour operators that will offer ‘5% off your next tour for every successful referral…’ Given the sheer volume of referrals you’re already getting perhaps this is too drastic a step, but a more substantial incentive could prompt your customers to be more active in marketing on your behalf.”
That got me to thinking. So now for those of you who have gotten this far… Fair warning, I am going to immerse you in the mundane details of thinking through market initiative, and, if anyone is still reading at the end, ask for your input.
If a monetary incentive gets us bookings from past guests’ recommendations that we would not have otherwise gotten, there is no question we can afford to accept less profit. Not only is the conversion rate considerably higher for referrals than with any other source of prospects, but also we have the strong impression that prospects from referrals take less labor and have higher levels of delight than prospects who come to us in other ways.
Obviously if we got the same number of bookings at a cost of 5% per booking than we would have gotten without incurring the cost, offering the 5% would make us less profitable. On the other hand, we’ll never know if that would be the case unless we try it.
We have plenty of reliable historical information on what percentage of our inquiries come from referrals, so it seems to me that the more numerate of my colleagues would be able to devise a measurement system that would tell us whether or not the offer was profitable.
My most compelling concern about offering a 5% referral fee is the feeling that it may create the wrong motivation for our past guests. I’d feel much more comfortable with past guests recommending us because they think they are doing their friends a favor rather than for money, or even to do us a favor.
Another concern is that a 5% discount on future trips is not worth a great deal to you, if you are not planning to take another vacation with us. I have feeling that the tour operators who successfully use this promotion, market many destinations, which makes it much more likely that for them to get repeat business than a one destination company like Costa Rica Expeditions.
There is of course a solution that addresses both concerns. Make the discount available to your friends. And, if you want to return to Costa Rica with us you can befriend yourself. How does that strike you?
Here’s another concern that is a little trickier. Most of what we do involves complicated custom designed itineraries that do not have a retail price. If I were on the buyer’s side of this fence, I would wonder whether we just marked trips up an additional 5% for those people who had the certificate.
To respond to that qualm, how about we advise people to get the price quote first and then charge the 5% discount?
I am thinking that the techies could come up with a certificate that it would be hard to duplicate.
So what are your thoughts?
Am I on the right track here?
Is 5% enough of an incentive?
Would more work better?
Or is the incentive really symbolic, like the bag of coffee that I am offering for the best responses to this post?
Given the tremendously well thought out comments that many of you send for a bag of coffee, I am sure that you are working well below your pay-grade.