The greatest tour & activity operators are those that combine a passion for the game of business with a passion for being the best at what they do.
1. The absolute BEST tour operators are great at poker.
If you want to have a great business you have to understand poker.
Think about it — great poker players know when to take a risk, and they know when to go big. They look for unlimited upside and limited downside.
How much revenue did your website generate last year…and how much did you spend on it?
Nearly all operators I speak to generate 100-200x returns from their website annually compared to how much they spend on it.
To me, that sounds like a pretty good place to focus future investment!
A smart person knows to reinvest where the returns are high…and they know to cut and run when the returns are low. But they don’t ever stop moving forward.
I had a conversation recently with an operator who is getting creamed in his market. The leading companies in his space are absolutely smashing him.
And — despite the fact that getting a new website would represent approximately 2% of his annual revenue, he’s scared of doing it. Why? Because 5 years ago, he spent money on Yelp ads, and it didn’t work.
Our typical customer gets increases of between 20-50% of sales in the year after they come to us. Sure, we can’t take ALL the credit…but we’re definitely taking some! Do you really think spending 2% of revenue for a 30% increase is a bad idea?
Come on — do you really think the winners in ANY space give up on marketing just because ONE attempt didn’t work? Do you really the think the winners stop working on something as soon as it’s working reasonably well? No! They keep pushing for the most gains!
I’m not just talking about websites, although this is one of the best ROI investments you can find in the industry. I’m also talking about other things like Adwords. If you’re able to make Adwords work for your business, you’ll be unstoppable.
Poker is a game which rewards the player for understanding where to take risk. If the downside is limited and the upside is unlimited….load up!
The people who don’t know how to play risk properly? Get ready for a future of paying 25% commission.
2. Great Photos & Videos rule the roost
Nothing makes a bigger difference to the feel of your site than your visual content — and sadly, this is where we see the most corner-cutting from our customers.
The ROI (Return on Investment) on photos is crazy — you can invest once and use for years! Anyone can point a camera, but not anyone can take excellent photos.
And to your customers — they matter. Just check out the below image — it represents where people click the most on our customer websites.
See that hot point on the first photo. It opens the gallery. That hot point is FAR and AWAY the most clicked point of the tour pages of our client Surf Tours Nicaragua.
They have great photos all through their site. You bet that this is helping with sales. Also check out the photos for each tour of Eat Mexico, another client of ours. Scroll down and you’ll be finding yourself booking a ticket to Mexico City…fast. Click here to check them out.
(The heat map comes from a tool called Hot Jar.)
3. Never compete on price.
Cheap operators get cheap customers, who are nearly always the worst to deal with. And what’s worse is that you make less of a profit.
A lot of people argue with me on this point as if by raising their prices, all their customers are going to walk away. They won’t — and even if some do, who cares? You’ll make more money anyway.
Let’s look at an example.
I was talking yesterday to a Californian operator who transports his customers in a new Mercedes for approximately $315 for a full-day tour. I nearly choked when I heard this — operators who offer his level of service typically charge double (or triple) this!
Let’s just say he bumps his prices to $500. That’s a 59% increase in price, but it would also represent a 120% increase in profit per tour. Even if he takes half as many bookings in 2017, he’s still ahead — he makes MORE money but works half the days!
Given the amount of operators out there charging $700-1000 for a single day tour, he has a real opportunity to turn his business into something that is not just a pleasure to manage, but something that will help keep him financially comfortable.
I believe this so strongly, I’m going to put in bold so no one misses it:
RAISE YOUR PRICES!
There you go.
Remember, the game of business is all about margin, not revenue. It seems to be one of the most basic and constantly forgotten principles. Which leads me to my next point:
4. Focus on the fundamentals
Leading on from point #3, the best in this game don’t get overly complicated. I see people posting from time to time in Tour Operators United who are just focused on overly complicated marketing tactics which generate zero return.
Meanwhile the best operators in our space crank nearly all their sales through a couple of core sources such as Adwords, SEO, Travel Agents (online such as Getyourguide or offline) or TripApdvisor (for those who have a day-tour company).
After this, they work to pad out sales through other sources such as blogging or social media. But…if you can’t use at least one of those sources above to generate good business, you’ll almost definitely struggle on the creative stuff.
Unfortunately, if you’re struggling to generate business from one of these key sources, it could be the case that your tour just isn’t that attractive.
I speak to operators every week — some barely need to spend any effort on generating business. Others find it eternally difficult. The most fundamental of business fundamentals is actually having a product that people flock to. Switching away from an idea which is generating mediocre results is tough but may be the best thing you ever do.
5. They’re really obsessed with offering the best experience
The best operators have a competitive gene. There’s no denying it. They’re always trying to think of how to stay in front of the pack…and part of this is to always be thinking about improving their customer experience.
These are the people who are always trying to push things to a new level, in every area of their business. They are the early adopters…and the early adopters are the big winners of the tour operating game.
One of our customers just re-upholstered his mini-vans to leather seats…just because he could. And that’s why he’s #1 in Australia and New Zealand for TripAdvisor wine tour operators.
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