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.
Müge Altuğ Sinay, Executive Director of Dekon DMC
Q: Are clients savvy and understand what the DMCs are?
Yes, I can say that the majority of our clients understand what a DMC is and how a DMC can make their lives less stressful and easier in many aspects. A DMC is like a one-stop shop where they can get all the services and have one main contact for their project. DMCs work as an extension of the client’s team on the ground and when you find the right DMC it is a lifesaver in many aspects. The local knowledge and experience that a DMC can offer are priceless in my opinion, there’s a huge amount of time, effort, experience and money invested by a DMC for this throughout the years. Clients can reach the most up to date information and tiniest detail on a destination with one phone call or email to their DMC which I think is a super luxury!
Q: Are the DMCs competitors to event and marketing agencies?
In most cases, DMCs and event agencies work as project partners. However, I must admit that due to the nature of the business there are many services which can be provided by both. It also depends on how a DMC defines and structures itself; some DMCs have a great experience and know-how in organizing events.
Q: Do DMCs provide better local access and pricing?
Yes, we do, and we must! This is the key to our existence and proof of our strength, knowledge and reliability in the market. A DMC should have a much better local access than their clients in their region in order to provide the unique experience to their clients and save their time and money. We know where they can eat the best local food, dine in a local house with the local family, we know when the traffic gets worse and which alternative route to take, we know which tables to book in a restaurant to be able to watch the great sunset …
Q: What do you think about the rise in budget transparency?
It is very important to provide a budget which is clear, easily understandable by the client without making an extra effort to understand what is included in each itemized cost, details of the service for the provided costs. We are flexible and work in different ways for different types of clients depending on their requirements, so it is important for us to understand the client’s needs from the beginning. Some clients need to see the invoices from the suppliers and some not so it all depends on how the client prefers. We can prepare the budget with mark up or with management fee or commission.
Q: Do you charge a fee for site inspections?
Most of the time we don’t. We also try obtaining most of the services on a complimentary basis from the suppliers depending on the scale of the project. It really depends on the project, total revenue, number of days & and the persons involved and the complexity of the site inspection. We definitely do not charge for our time. If we charge some of the services during the site inspection, we then deduct this amount from the final bill if the business is confirmed to us.