A human touch enables KHM Travel Group to thrive in a tech-dominated industry

 

An entrepreneur’s path doesn’t always progress along a straight line. It zigs and zags, goes uphill and down, and sometimes dead-ends. And sometimes it leaves engineering school in Akron, winds through travel school in Florida, and takes a 25-year detour in the construction industry before terminating into a wildly successful travel agency in Brunswick.

Rick Zimmerman is the president and CEO of KHM Travel Group. He co-founded the company in 2005, and has grown it despite the general decline of the industry, which has been besieged by popular book-it-yourself websites.

Between 2012 and 2017, KHM more than doubled sales while adding 1,000 agents to its bullpen of 3,000, in large part by putting a premium on personalization to compete with the impersonal technology that has become so dominant.

But getting where he is today wasn’t always a given. Having studied engineering at the University of Akron, Zimmerman was set for a career in drafting. He came by it honestly — his father and brother were both engineers — and took to it naturally.

He’d been working in engineering from a young age. While at a soils and concrete lab, he was exposed to the legal nitpicking and financial hand-wringing of the business. By age 21, the field no longer excited him.

Rather than finish his degree, Zimmerman left his native state and preordained career for Kissimmee, Florida, where he attended Southeastern Academy, a travel school run out of a converted Howard Johnson. He breezed through the year-and-a-half program, headed back home to Parma and took a job with the first travel agency that offered him a position: ’Round the World Travel.

“They tapped into the fact that I was a numbers guy, so they let me do what was called the IATA report back then. Now it’s called an ARC report. I got to break down the commissions that we would make for all of our airline tickets,” Zimmerman says.

It was essential, but tedious work, and not at all what Zimmerman wanted to do. He thought he’d travel the world and plan spectacular trips for clients. Instead, he was sitting in front of a typewriter doing reports and air ticketing for minimum wage.

Disillusioned and barely eking out a living, Zimmerman stepped out of the travel business and joined his brother who, wanting to start a construction company, dangled an attractive carrot in front of his brother: more money. But a couple years in, his brother took his business to California to retrofit buildings for earthquake standards. Zimmerman didn’t go with him. Instead, he launched a home remodeling company.

His business, Diversified Services, grew through word of mouth, largely based on work he and his small crew would do for folks he knew from church. Looking to accelerate his growth, he started placing ads in TV Guide.

“One of the things I was noticing was the client that I would get from the TV Guide was not the same kind of client that I was getting from word of mouth,” Zimmerman says. “I was getting a shopper from advertising.”

These shoppers chased price, unlike the word-of-mouth clients who pursued him based on the quality of his outfit’s work. That led to an important revelation and change of tactic, which would inform his later venture.

 

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.

 

Authenticity

As important as personalization is between agents and customers, it’s equally as important between host agency and agent.

KHM’s training regimen is a self-selected choice between in-person boot camps, online training, or both. Three-day boot camps teach the sales processes, popular destinations, and compliance and financial issues, and enable fellow agents to mingle.

But given that about one out of every six new agents will attend a boot camp, making a personal connection with 4,000 agents for a company that employs 48 full-time support staffers is important. KHM’s customer relationship management software is a big part of that. When agents call the support staff, staffers enter notes from the conversation into the CRM so that if another agent takes the call there’s a record of previous encounters. But it’s Zimmerman’s personal approach that makes all the difference.

“It’s this kind of engagement with our agents that is important,” Zimmerman says. “At every one of those meetings and when things arise on Facebook, somebody gets my card or they get my cell phone number. That’s the cell phone that I carry around with me all the time. I tell agents, ‘You’re going to get my card and you’re welcome to call me anytime day or night because I truly care about your business. I want your businesses to succeed.’”

That personalization is also expected from the staff at KHM’s Brunswick headquarters, all of whom talk with Zimmerman during the onboarding process about the company’s core values. In that conversation, he needs to hear that they’re willing to buy in and willing to put their interests aside to take care of the agents.

And according to online reviews, most agents seem happy with KHM. Many say the training is great, and that Zimmerman, in some way, shape or form, made a personal connection that made them feel as if they were part of the company rather than some satellite agent in its distant orbit.

Hanging on the wall in Zimmerman’s office is a framed T-shirt signed by the Brunswick office staff. He called attention to it as he talked about buy-in, authenticity and putting others first. He says those traits are needed when on the phone with an irate agent or customer, when it’s important to settle them down and find out what’s really going on.

“That’s what I’m looking for, is being willing to buy in to what we have here,” he says. “You know, authenticity. I think that’s what our agents tap into with me. They know that I really want them to succeed and that if they have a problem I’m willing to get to the bottom of that problem, figure it out, turn it around and make them successful.”

TAKEAWAYS

  • Spot the flaw in your competition and exploit it.
  • Make a connection with your customers.
  • A straight line might be shorter, but it’s not always the best path.