How a 23-Year-Old Quit His Job to Build a $6m Online Travel Agency
Time for something new here at Blog Tyrant.
Hey! I heard that collective sigh of relief!
Anyway, for some reason I seem to be surrounded by people who are fantastically successful at what they do. I always seem to be picking their brains or soaking in their borderline-annoying brilliance. And it occurred to me that maybe you guys would like to hear from them as well.
So I’d like to announce a new section here on Blog Tyrant called Tyrades (sort of like a tirade!) where I interview people who are doing extremely well for themselves in the hope that we can learn a thing or two.
The big twist is that I’m not going to interview other bloggers. I want to look at what people in different niches/industries (but still with an online element) are doing so we can get out of our shells and apply tactics that we have long forgotten or perhaps never heard about. It’s also about staying inspired.
Let’s get started!
A chat with Mark Trim – founder of RoundAboutTravel.com.au
The first interview in this series is with a guy I’ve known for five years. In that small amount of time he’s gone from a top seller at Flight Centre to starting his own online travel agency called RoundAbout Travel that turns over $6 million a year, even in the GFC climate. Not an easy feat.
Last week I asked him a few questions I thought you might be interested in – specifically about his fast growth and success in a really competitive industry.
Make sure to leave your comments. If he gets time he’ll drop around and answer a few questions.
1. I first met you around 2007 at my local Flight Centre when I was booking my second trip to Asia. You had won a bunch of awards as a top seller but decided to make the somewhat scary move to leave that comfortable role and start your own travel agency. What motivated you to do this and what preparations did you make?
I was 23 going on 24 at the time and had been with Flight Centre for about 3 and a half years. I had originally set myself a goal to be an “area leader” by the time I was 25, this role was essentially being the boss to team leaders of about 15 stores. I was coming up to being 24 and realised I had made it to 2ic and then team leader but the next steps in the corporate ladder weren’t going to be as quick as I had once hoped for. I was the type to speak my mind and want to do things my way, so I wasn’t really the person to play the political game. It became apparent to move up you’d need to move interstate as there was quite a queue for the management roles in SA. My partner Amy [now my wife] also worked there and we were both ready for a change. Whilst on holiday in the UK it struck me that no one was really focussing on round the world flights. Everyone did a few every now and then but there weren’t any Australian based specialists [the UK had a few]. I decided to tell a few family members at that time what I was planning and then I felt like I had some accountability to follow through with my word. Round the Worlds were a product I always sold a lot of, I knew when they were good value and would often “switch sell” people from return trips to round the worlds. So we decided to start working on our own agency model. I would come home from work each night and spend 2-3hrs writing out business names, drawing up mock websites and trip planners in a scrap book and discussing with Amy. We then had to work out how to start a business, the hardest bit with a travel agency is getting licensed and working out the order that everything needed to be done in. My friend’s brother was a designer and we worked on the website for the next 6-9 months before it went live. I quit my job at Flight Centre and started working from home without the website finished, this was a bit risky but I had enough word of mouth business to get us going and then it was onwards and upwards from there.
2. Why did you decide to make RoundAbout Travel primarily web focused without offices and so on?
Essentially we thought that using a travel agent for a difficult booking was still a necessary and beneficial process. However, how people interact with agents was cumbersome and extremely time ineffective. You waste a lot of time simply chatting to people and the major problem with a shopfront is the interruptions, you just get started on something and then people walk in to get a brochure/ask for a price/you get a phone call/people want directions to the post office and so on. From the clients perspective they often have to sit and wait while the consultant finishes up. Basically it’s very hard to get anything done efficiently – go past any travel agent at 6 or 7pm and you’ll no doubt see people working back late. By going online we don’t have any disruptions and can out-service almost any other travel agent because we essentially retrain our clients to wait for an email reply from us – we get back to all emails very quickly and even have a 1 business day guarantee so people know they’ll get a reply [this limits the situations where people send an email then call immediately to go over it]. This means we can work on one things at a time and get it finished much quicker. Furthermore, it eliminates all errors because everything is in writing. In shop-front agencies there is a high error rate with dates and names being spelt incorrectly, there’s no proof of what people told you so it gets messy. With an email based consulting system there is a clear paper-trail. Basically we offer a hybrid between utilising booking online but still getting an experienced travel consultant without having to leave your house or workplace.
3. You’ve experienced some pretty fast growth for a new company working in a post-GFC climate in an industry that tends to suffer when people have less income. Can you tell us a little about that growth and what you attribute it to?
We started in August 2008 by the time we got our license and it was basically the start of the GFC. In our first year we sold around $900,000 and have grown that up to over $6 million in turnover per annum. We’re still a small fish in a big pond, if the whole market contracts 5% we’re not really affected because we’re not yet at our capacity. We’ve still got potential to at least double our staffing numbers, so we’re still in a growth phase. Any economic downturn is essentially outweighed by the growing trend for people to be booking online and the high AUD has kept up demand for international travel. We have noticed people are extremely price sensitive to their main airfares in this climate, they’ll make a decision on a $10-20k trip depending on a $100-400 fluctuation in their airfare costs which still strikes me as quite strange.
4. I know you get a lot of business from Google Adwords. Was that always the case or have you slowly improved your conversion rates by experimenting with different ad types, placements, etc.?
Essentially all our business has come from AdWords, those clients might then refer us on to someone or book again but it all started with search. We tried a few travel expos and the very occasional print ad but it’s really nowhere near the ROI that we’ve experienced with Adwords. This let us compete with the big boys like Flight Centre and STA on a relatively level playing field while we waited for our pages to start to appear organically. Over the course of the first year of our business we spent a reasonable amount of time in copy writing and amending our landing page to improve conversions and we got that to a place we were pretty comfortable with. From there we haven’t changed a lot, we have so much demand I haven’t been able to spend as much time with the stats as I’d like to, we tinker with it but the really big difference to conversions is the lead in rates offered by the airlines. So if they put out a special or sale that’s even $30-60 cheaper we see a marked increase in hits converting into inquiry and then into bookings. Again I can’t quite believe so many people let such small changes in the airfare cost determine their whole trip but it definitely happens.
5. Do you spend a lot of time with social networking sites like Facebook, Twitter, etc.? What are your thoughts on their usefulness?
I used to spend a lot of time on Twitter. I got fed up with it, I found it was basically just people wasting time. Businesses all promoting to other businesses and not getting through to their end user. Sure if you want to network within your industry or follow what celebrities are doing maybe it has a place for you but I didn’t see any examples of when that part of the social media spectrum would actually result in leads or more clients. Facebook ads I’m not a huge fan of, I didn’t see any results there. As it’s interruption marketing it didn’t suit our products as people won’t just book a spur of the moment trip around the world. Whereas when someone searches on Google it’s at a time when they are more actively seeking information and more likely to act. I have found Facebook to be a great way to interact with your clients in an after-sales sense, if you can get them to ‘like’ your page then you can keep them connected to your brand and they are more likely to refer you to other clients.
6. Typically small businesses have trouble scaling up. They might be in a profitable niche but struggle to expand. You’ve put on four new staff and are looking for more. What tips can you share about bringing on new people or changing the business to take on bigger challenges?
This is definitely a challenge, finding good staff in Adelaide is difficult. We’re up to 6 staff in total and looking to go up towards 10-12 in the next 12 months. From my perspective it’s basically training your staff to think how you think, and employees are unlikely to have the natural thought patterns of entrepreneurs. When we first hired staff we had to break down and work out how we naturally communicate and how you can make that into relatable and teachable concepts. I didn’t want anything to be too much of a pattern or use any set templates with their consulting or sales, but they needed to know what the key elements that I cover in the sales process and the reasoning behind how I consult and why that has delivered consistent and measured success. I’ve really tried to get my staff to consult as close to how I do things as possible and we’ve seen great results, taking consultants and doubling the turnover that they had achieved in other major brand’s businesses.
7. In 2008 I was in your office with my buddy booking some plane tickets and you, while completely pre-occupied with something else, turned up the radio because you noticed we were enjoying the song (tapping our feet, etc.). I remember at the time thinking that was an incredible bit of customer service. Years later and my father, brother and a bunch of my friends use RAT after hearing about the high quality relationships you build. Is that kind of sales/customer service a natural thing or can a person develop it?
When I consulted face to face I did use to work on building relationships and feeding off of other people, often referred to as mirroring and matching and I would couple that with rapport building. That sort of sales had always worked well for me in that environment but when we went online we had to find a new way to approach customer service. Most sales courses will tell you that over 90% of your communication is done in body language and tone, so without that via email it certainly became a challenge to adapt and find the best way to consult. Essentially yes those techniques can be learnt, but they require a certain degree of confidence in what you’re doing and unfortunately I’m not a huge believer that rapport building is effective online. People just don’t believe it and are unlikely to make a connection with you until you speak on the phone. We have found that through Facebook we are able to make that personal connection, but usually that’s after the sale so you need to have a great consulting model and a lot of product knowledge not to rely face to face sales techniques.
Interruption: Ramsay again here. Interesting to hear Mark talk about the phone. Recently wrote about that here.
8. Running a company can be pretty stressful. Do you have any insights for dealing with the stress?
True, particularly in travel and even more so when you’ve got thousands of clients scattered around the world at any one time when there is a volcanic eruption or an earthquake. The best thing is a supporting partner and having enough success that they can commit to the business 100%. My wife Amy is amazing, whilst I’m “big picture” focussed she fills in the detail for me and we worked out our own roles in the business over the first few years. She is definitely the unsung hero of the operation. The parts I find stressful is what she’s so good at, getting the accounts done, paying bills, payroll, HR, BAS, our annual audit for the travel compensation fund…the list goes on. Whereas for Amy she doesn’t really like dealing with “Joe Public”, it can be pretty hard work selling travel to people with varying expectations yet that’s a challenge I really feed off. I like the feeling of successfully convincing someone, I’m someone who always thinks I’m right so it’s a bit of a game for me. You have to find something like that to drive you and that takes a lot of the stress out. I always like to have my next holiday booked so I know where I’m going and why I’m working so hard, I put a photo on my 2nd monitor so I’m looking at it every day. Just like my clients need to know “why” I’m recommending certain options, I need to know “why” I’m doing this.
9. What advice do you have for someone trying to tap in to an industry that already has a lot of competition online?
Find at least 3 points of difference for your company, they need to be tangible benefits. You need to be able to sell yourself clearly and succinctly. I often get put on the spot travelling around the world when I tell someone I own an online travel company. They often ask me something like “I don’t mean to be rude but why would I book with you and not XYZ company”. I can answer that question with conviction, they should be wanting your contact details by the time you’re done selling yourself.
10. Where should we all go on our next holiday?
I think there is a difference between going on holiday and travelling. But that’s another debate. I love New York, Paris, Lake Como, the Maldives, Las Vegas, Venice, Tuscany, Switzerland, Colorado and Wanaka, New Zealand. The perennial Australian favourites of Bali and Phuket are still great for a getaway but for something different try the Cook Islands, highly underrated.
What do you think?
I’d love to hear what you think about this new idea as I’ve got quite a few other exciting Tyrades lined up for you. Oh, and big thanks to Marshall for coming up with the name Tyrades in today’s Facebook ideas-jam.
Lastly, feel free to ask Mark any questions you might have about starting a business or scaling it up or anything else you’re interested in. I’ll see if he can drop in and answer some comments. Feel free to go on your usual 100+ comment quests!