Should You Charge Fees?

If we were to ask your clients without context the answer would be no. But as I said that’s without the context to accompany it. 

Once you add the context, you’ll be amazed how many of your clients will not only be willing but even insist on paying fees. 

I get it, you came into this article with some biases knowing that I would tell you to charge fees, so my opening isn’t a huge surprise, that being said, I’m assuming it’s safe to say that you’re potentially Fee Curious if you’re reading this. So let's talk about it. 

Fees are believed to be an entirely new invention in the travel industry during the last couple of decades. The reality is that back many decades ago travel agents charged fees exclusively. Then somewhere around 1931 as airlines and tour operators were scrambling to get the attention of ticketing travel agents they began to offer commissions.

As the concept of commissions began to work and airlines and tour companies began to lure the attention of travel agents to them - bringing with them - their clients sales, the concept expanded. 

This continued for many decades until the invention of Internet shopping and the introduction of new distribution channels. Since the tourism industry no longer relied exclusively on the traditional travel agent model - they began to see ways of expanding their options and reducing their commissions. 

Years ago, when I joined the industry, commissions were an entirely different beast—and even then, the agency I was hired by was charging fees (very healthy fees at that). That was in the early/mid-2000s. 

Yet today, I still hear from advisors saying “My clients wouldn’t pay fees”. 

I promise you, that’s because you believe that. Your clients will never see more value in you than you see in yourself. And if you believe your clients won’t pay it, that will be evident in the way you position yourself and your fees. 

Instead, consider it from this perspective, what if you looked at it as - you work for the one that pays you. Better yet - position it to your clients that way too. 

The reality is - when you’re being paid by your suppliers, no matter how much you believe you’re working for your clients, you’re always looking for the items that pay commission and the odds are good you get twinges of resentment every time they ask you to book things that don’t pay. 

What if instead - you were able to get paid by your clients and they were how you got compensated, and the supplier commissions were strictly a bonus? That way you would be free to look at all of the options that are best for your client rather than simply what’s commissionable. 

When you position it to your clients that when they pay your fee, it allows you to make selections from a wider range of options vs just the ones that will make sure you receive a commission. 

And as a side note - consider this, when you market yourself as “free” or “the same price as the internet” have you ever wondered how your clients feel about that? After all, we all - nothing worth having is free and if it sounds too good to be true, it probably is. Imagine if this drive to hold on to as much business as possible was actually driving away your perfect ideal client. 

Check out our podcast about Using Fees to Enhance the Client Experience - Episode 80