Chink in the armor
Through 23 years at his construction company, Zimmerman was running the business and swinging a hammer. The physicality of the profession and its up-and-down business cycle wore on him. Then, he got a sign.
“I was remodeling my cousin’s basement — he’s an entrepreneur and I’m an entrepreneur. We’re talking a lot and one day we’re finished with the remodeling of his basement and he says to me, ‘Hey, I just became a travel agent online.’”
Travel agents, his cousin Burt said, work from home and make more money than during Zimmerman’s time. So, the two began working in the travel business while Diversified Services was still up and running.
As independent contractors, the cousins stumbled along without much in terms of training and support from their host agency.
“When I had mentioned that at one point to my cousin, he said, ‘Do you think we could do it better?’ And I said, ‘Well, of course I think we can do it better. These guys are terrible,’” Zimmerman says. “So, we looked for ways to start our own business.”
Zimmerman stepped back into an industry that was drastically different than when he left it in the 1980s. Expedia and other easy-to-use web-based travel services made travel agents far less relevant by giving consumers the ability to buy airline tickets, book hotels and rent cars while riding the bus to work. But among all the gadgetry and user-friendly platforms, Zimmerman saw a flaw.
The eruption at Eyjafjallajökull
Applying a lesson from his remodeling business, Zimmerman trained his agents to take on one client at a time and treat them royally.
“That person is as good as gold because they’re going to tell others about you. And you have reach that an Expedia does not have. They have a great vertical. They’re in front of a lot of people, but they don’t have the reach that you do,” Zimmerman says.
Seemingly contrary to that notion of reach, he told his agents not to advertise.
“And especially don’t advertise online, because that’s exactly who you’re competing with. You’re virtually identifying your competition right now — that’s Expedia, Orbitz, Travelocity, Hotels.com. Now all the airlines have their own websites. They’re selling against you. Everybody’s selling against you. Don’t be in that space. Be in your own space. Be in your neighborhood space. Do your neighbors know you? Does your church know you?” Zimmerman says. “That’s where your business is going to come from. As we started teaching that way of getting business, it got some traction.”
That’s because just like the customers who came to Zimmerman’s remodeling business through the TV Guide, KHM taught its agents that the people who came through advertising were not the clients they wanted.
“They’re just looking at price and we knew that we couldn’t compete, in a lot of cases, on price,” he says.
Personalized service would be the ticket to success for KHM agents. Zimmerman says the 2010 volcanic eruption at Eyjafjallajökull in Iceland proved his model when it disrupted air travel across western and northern Europe and grounded many travelers.
“Expedia wasn’t able to handle the customer service,” he says. “Small agencies and independents were able to handle that because somebody could call them at 3 o’clock in the morning and say, ‘Hey, I need a flight out,’ and they would respond. It was that customer service, that one-on-one kind of service, that you get from an independent travel agent that made all the difference.”
Zimmerman’s model has worked. KHM currently has about 4,000 agents and is doing in the neighborhood of $150 million in annual sales.