Can MLM And Travel Co-Exist? Just Maybe! (Part 2)

My last post (before distraction) explained where I felt the MLM model had made significant strides towards (for lack of a better word) acceptance in the travel industry. With that said, there is still a lot of work to be done. I believe that the MLM model has seen a tremendous amount of growth--from 60,000 to 130,000 RTAs from YTB alone in a year! I also believe that this growth has not been managed at all. When any company is allowed to grow uncontrolled, it will fail. What I believe is happening is that the MLM model is accelerating the shift from agent sales to B2C sales. By opening up the channel to virtually everyone, there is no choice. Look at the recruiting efforts. If 150,000 recruit 6 people, that is 900,000. If they recruit 6 it is almost 6 million. If they recruit 6 it is 32 million. So you only have 3.5 generations of recruitment before everyone is a RTA. What happens then? NO recruiting, no travel sales, the model collapses. Far fetched? Maybe. Maybe not. So with that in mind, here are some (not all) of the areas where I feel there needs to be significant change on the MLM end.

• Arrogance. This needs to be toned down a bit on all levels. It is great to have goals and benchmarks. But, keep the arrogance in check. I am still not buying $226M in sales. I certainly do not buy $1B in sales for 2008. I have heard about the Pinnacle Award and how YTB received it three years in a row. Vicki Freed told someone at the recent HB show in Las Vegas that she was aware of once. Maybe she is confused. 13,000 cruises? 13,000 passengers? 13,000 certificates? You get the drift.
  
• Professionalism. It is hard to manage 15 people in two offices--just ask me. I cannot imagine managing 150,000 in 150,000 offices. Sure the memo was great, but honestly, YTB ought to look into a compliance person to monitor blogs, presentations, forums, etc. We can be forceful and professional at the same time, but when you read a post from an RTA that says "Lisa got what she f&^king deserved for screwing with us, now she is in charge of the hotels" just screams unprofessional. Set the expectation and enforce it. As a business owner, if I knew that some of my representatives were representing my company like some of the YTBites in these comments---my sales force would go from 150,000 to 10 pretty quickly. You all ought to be thankful anonymous messages are allowed to express your opinions. Too few have the courage like Doug, to stand up for your own thoughts and beliefs. Your cred rating would go up a bunch.
  
• Unified messages. Similar to the professionalism, the MLM needs to control what is put out on the streets. Most people do not understand the compensation program (I think I have most of it--but not all of it) and judging from the different interpretations I have heard, I know that 150,000 don't have it correct. Directors have conflicting on stories. Please be realistic and not offer deceptive messages to the masses. Many leave your meetings feeling they are going to earn 60% of travel booked and a world of free travel awaits for them. I am sure it was stated correctly, but perhaps not as clearly as it could have been.
• Focus. Shift the focus to selling travel and not the downline. Eventually, you are going to run out of people to recruit and then what? If you could refocus the efforts of 150,000 on selling travel, then there might be some legitimacy when you crow about the Pinnacle Award and $226M in sales. Instead of talking about recruiting six people to recruit six to recruit six to recruit six to recruit six...why not recruit six to sell a trip? And speaking of focus...all I have heard in the past few months is that YTB sells travel. Well what is the deal on the cars and flowers? Is this turning into a Market America program? What's next? Self administered colonoscopy kits? Sex toys? (although I hear there is real money in that)
  
• Customers. More of the RTAs need to focus on the customer. The average RTA does not give a rat's ass about customer service. As long as the client goes to the website, the RTA is happy. If the RTA is not interested in selling travel and handling the customer....cut him loose and get rid of the dead wood. The industry is not for everyone--contrary to what may have been presented. A lot of customers feel they are dealing with trained agents--reality demonstrates that the vast majority are not. Customer service is NOT referring the client to the vendor to resolve the problem. At this point, what is in it for the vendor? Not a damned thing. The vendor is paying top commission to someone that merely said book direct. This is screwing the vendor, seriously pissing off the traditional agents, and in the eyes of the client--giving the whole industry a black eye.
  
• The credentials and perks. Regardless of what is in the official talking points, the MLM program utilizes a strong focus on the credentials and perks. First off, for the "traditionalists" they are not that great to begin with. Sure at one time they were but not so much now! When I bought my first agency, I looked for a business where I could make a living for myself and provide a living for my employees. The perks were the last thing on my mind. In over a decade, I have been on one FAM. I say eliminate the in house credentials and let then qualify like everyone else. $5000 for IATAN. Why is there even a need for YTB to issue a "credential"? Amex does not, Carlson Wagonlit does not? The only reason to do so it to take advantage of a grey area when it comes to suppliers. By putting some fancy wording and a photo on a card bearing the word "IATAN/CLIA NUMBER: 123456" lends some false credibility to the RTA. I think this is fraud. And please, stop treating FAMS as low cost vacations. The suppliers expect more. They are learning opportunities. If you want a family vacation, buy it like everyone else does.
  
• Financial focus. The MLM model (and YTB in particular) is very vocal about them not being about recruiting and them being about travel. I wish it were true. The financial reports indicate otherwise--most of the income is derived from recruiting. If it were focused on travel, I would have thought more than 6500 cruises would have been sold in the Carnival sale. Had it been a little more focused on travel, I venture to say that Royal Caribbean and IATAN would not have terminated them. Could YTB recruit more people serious about selling travel if they could claim that the average RTA earned a few thousand a month (rather than the pitiful $60)? I think so!
  

So, what is the solution? I have some ideas. But this post is too long as it is, so stay tuned. Besides, I need to refine them a bit. Part 3 coming soon to a blog near you.