In the Trenches: Reconsidering the Prepaid Model
Without question, one of the more difficult things for new potential clients to understand is our prepay model. It can be very confusing for people who have worked with traditional travel agents in the past. Frequently I find myself questioning whether it's the right model for us, and so far, I've yet to change my mind.
Usually, this topic comes up after someone finds us on Yelp. They see our service, assume we're a regular old travel agency, and call us up asking how much it costs to fly from XX to YY. When we explain to them that they have to sign up for our service before we can give them that information, it usually ends up with them saying they'll think about it. That, of course, is code for "no way am I paying you up front."
When we get those calls, I always wonder if we should go with a more traditional model where we take all the risk. So far, I've yet to find a reason to seriously consider that option.
The way I see it, that kind of model could go two ways. One, it could just have people pay after we find them a price they like, when they book. But what's to stop someone from just taking that suggestion we give them and walking away to book themselves? We put a lot of work into finding the best fares for people, and if we were to take no payment up front, then we'd have to invest a lot of time with the potential for no reward.
The other model would go something like this: Tell people that if they come to us with a fare, we get to keep half the difference between what we save them when we do the search. It's a bit of an ambulance-chasing attorney model, where we keep a cut of the winnings but get nothing if we lose. It has the potential to pay dividends in some cases, but it could also just end up being miserable for us. I can see people who think they have the best fare after doing a lot of research coming to us just for validation. My guess is that the winnings would be less than stellar and it would largely attract people looking to game the system.
That's why I like the model we have. It means that we get people who are serious about traveling and not just looking for a casual quote. Still, we don't want to rip people off. That's why we have our money back guarantee. If someone isn't happy with the service they get after the fact, then they'll get their money back without any hoops to jump through. So far, we've had just two people ask for their money back. In both cases, I think it was someone who didn't fully understand our business. That's not a lot of unhappy campers.
Of course, we can be more flexible with our corporate clients, and we are. But in general, I think we'll continue to stick with our current model. That being said, every time someone decides to "think about it," I'm sure I'll keep considering whether we're on the right path or not.