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THE NAKED TRUTH BEHIND MANAGEMENT FEE-BASED vs COMMISSION BASED MODEL

We are asking the leading global and local DMCs to give us their opinion on the matter of budget transparency and charging for work.

Blaž Ahčan, Go Green (DMC) owner and CEO

As the Company’s General Manager, Blaž is entirely dedicated to his responsibility of connecting and coordinating all of the team members, projects and, above all, challenges of providing the Company’s clients with exceptional services time and time again.

Q: Are clients savvy and understand what DMCs are?

The world is becoming ever more connected. In spite of this and the extreme availability of information, the world is too big to enable individuals and companies to quickly and, in all respects, efficiently connect the most relevant of information. Each destination is specific (language, culture, traditions, natural conditions and obstacles, etc.) and at the same time part of a wider region. In the services to be ordered from us, clients are looking for one, the other or both. Good knowledge of a destination, a key characteristic of DMCs, is a big advantage, first and foremost for buyers of services. Those seeking services quickly become aware of this fact. I think that foreign agencies are increasingly beginning to understand the importance of a good DMC, which enables them to save time and brings other financial and logistical advantages… This is because in spite of independent research and combinations, regardless of the wealth of information available, they are simply unable to prepare the services (products) that would be as perfected as what an experienced DMC can deliver, assuming, of course, that this is a highly professional and responsible company at the destination, which is recognised for its conscientious approach to work. This is a fundamental value of our company, Go Green. Therefore, it shouldn’t come as a surprise that our entire team has a thirst for creation, as the ideas, hard work and dedication of each and every one of us is clearly reflected in practice.

Q: How do the differences when services are organised by a DMC versus by the foreign agent show in practice?

I know of cases when attempts at compiling itineraries ended in failure, but there were also excellent packages prepared by the foreign agents themselves, but at what cost in terms of time and money? No foreign company is able to draw up offers as quickly as we can; we’ve worked in the field for 10 years and are able to transfer what we learned working with one customer and apply it to projects for other clients, we’ve developed content and ensured the quality of services from the beginning to the end. We are the ones monitoring best practices first-hand, thus being able to offer our clients quick and efficient solutions.

“The buyers are looking primarily for someone they can trust. Go Green is able to guarantee to its clients that their business relationship with their partners or employees are in safe hands.”

Q: What is that the buyers are looking for in the first place?

Our company’s business mission has always been focused on quality and professionalism. Initially, we offered only a few specialised services, but the responsibility towards our clients we are renowned for has earned us their trust, and so we went on to become one of the most recognisable DMCs in our country. I am proud to say that we work with partners (predominantly in the B2B segment) who know very well the advantages of collaborating with us. They know that we excel at what we do, we combine well-established partners at the destination, we create innovative and stable DMC products to be implemented at the highest level of quality with selected providers.

The buyers are looking primarily for someone they can trust. Based on what I mentioned before, Go Green is able to guarantee to its clients that their business relationship with their partners or employees are in safe hands. If we only consider the fact that they entrust us with their key professional relationships, then it is safe to say that they entrust us with what they value the most in business terms. What is key then is our responsibility as a DMC to at least fulfill if not exceed what we’ve agreed to do.

Q: To what extent does the work of DMC’s interact with that of event agencies?

We’ve seen many attempts of DMC’s trying to enter the field of expertise of event management companies or vice versa, event managers trying to organise content, which is in the domain of DMC’s. There isn’t a clear delimitation between the two business orientations as there are far too many types of events. In my opinion, non-collaboration is a short-sighted endeavour. Our industry is complex, tense, and the market very transparent. The quality of a good DMC lies in being the connecting force. If we are successful in connecting various stakeholders (providers?) involved a given business tourism product to the extent that the client is happy, that the entire process is smooth and natural, all the while maintaining a high-quality level of services, we have achieved the latest and greatest form of business operation – with creative integration. We have reached the summit. Staying on top though… that is another chapter.

Q: Do DMCs provide better local access and pricing?

Most notably, DMC’s can provide their clients with the best value for money. As a DMC, we must and we can offer superior quality given that we know our contractors and providers first-hand, we are familiar with the most interesting services and products – this is what we know best, after all! We possess a comprehensive and integrated overview of the destination, which is why our clients trust us. Being a DMC owner, I often say that ours is one of the most wonderful sectors and its business philosophy is easy to understand – if you know who you are and what you’re good at, then you will manage to provide only the best to your clients, because you will be prompt, precise, partner- and quality-oriented. These things are not a given though. You must be truly fond of your destination, you must see past the mere financial aspects and limitations, your wishes matching those of your clients – to achieve and look for something more! We co-create products and through our broad knowledge enhance the destination itself.

I personally am not sympathetic to pricing contests, even less so to competition through the lowering of tariffs just to win over some clients. This is myopic and only works in the short term. Of course, the price must be attractive as well as transparent, but the key element here is being able to provide one’s clients at any given moment with superior quality products they’ve come to expect.

Photo Credit: NLP Studio

Q: What do you think about the rise in budget transparency?

We wholeheartedly support it! One of our company’s primary values is business transparency (in addition to the aforementioned responsible attitude to work, professionalism, prompt responsiveness and a dedication to providing services at the highest possible level). Whenever we are in the process of establishing a new business relationship, transparency is key in order to win a client’s trust. Trust is the key component in such relationships, a building block for long-term cooperation with a client, opening up new opportunities. During the past ten years, we at Go Green were happy to have met with very diverse clients, working for the Government of the Republic of Slovenia, with corporations such as IBM, SANDOZ, as well as with other major tour operators – and everyone’s comment upon the completion of the respective projects was they commended our transparency and reliability. These are by far the two most important values we have to maintain and develop as DMC’s.

Q: What do you think about this statement: We should be charging for what we do?

Yes. By all means. How could we have it any other way? Everyone involved in creating the end product at a destination has a role to fulfill. If clients’ expectations upon leaving us have been met, if their guests, business partners, employees, invitees were happy – then there should be no reason why anyone in the complex chain guaranteeing such fulfillment should not be paid what they deserve… But there is more! The role of integrators also lies in optimising time and experiences to benefit the client. ‘Value for money’ in this context means that the partners benefit from saving time and/or money, that their risk levels are reduced to the mutual trust with the DMC. According to this, the partner-client enjoys advantages that far exceed what the DMC charges for its services. Reliability, top-level quality, and professionalism are the only relevant business guarantee.

Q: Do you charge a fee for site inspections?

I see partnership as a well-balanced, honest relationship between the two parties involved, where both aspire to maximising the returns for their respective companies as well as for the mutual benefit. Our company has been working with over 90 per cent of its clients for a number of years. I like to believe that this is because we understand and nurture the awareness of how important collaboration with one’s partners actually is.

We prove this in practice, of course. For instance, for familiarisation tours and site inspections, we assume part of the risk or a portion of the marketing costs. This means that our aim in carrying out ‘site inspections’ is to generate minimal costs. In collaboration with our partners and potential stakeholders in the prospective business operation, we seek to offer special prices that cover only a portion of fixed expenses. Part of these expenses will be paid by our company or with contributions from our partners, and part by the client. If the order in question is confirmed, then this amount will be deemed an advance payment, while our portion of the payment will be entered as our marketing expenses.

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