Virtuoso, the luxury travel network, has unveiled a new membership agreement for member agencies with an all-inclusive price. Rather than offer a la carte pricing for various components of membership, Virtuoso said it has packaged together the assets that its analysis shows make member agencies more successful with their clients, more desirable for advisors and better positioned for market success. The initial membership fee will be more, but will be offset as members sell more preferred supplier products.
Virtuoso said it instituted the new membership agreement a year after it changed a number of benefits for members during the recession, including paying 100 percent year-end cash payments on overrides to members if the network reached product goals for preferred suppliers. It also introduced member credits for various services based on preferred supplier production.
The new membership agreement, which is effective for 2011, was driven by a year-long analysis that Virtuoso conducted showing that member agencies that did not fully utilize the network’s assets were less successful than agencies that took advantage of Virtuoso resources. Using marketing as an example, a review of 18,000 Virtuoso client households revealed that those receiving a campaign approach of publications, direct mail and e-marketing resulted in 80 percent higher transaction value than those households not receiving Virtuoso publications and marketing. Virtuoso member agents participating in the training-based sales campaigns also experienced four-times higher the average Virtuoso advisor transaction value for these tactical, integrated sales efforts.
“Our goal is a fully engaged network,” said Virtuoso CEO Matthew Upchurch, CTC. “This all-inclusive approach provides every member with full access to the benefits and tool sets developed for their success. This means higher yields and production for our suppliers and for our members, a better ability to recruit and develop talent and increase profits.”
Virtuoso said the new all-inclusive agreement helps agencies budget for their network participation and focus on maximum utilization of the provided products and services. Members’ investment is set as a decreasing percent of preferred supplier production.
“Preferred supplier production is rewarded in the form of 100 percent participation in bonus overrides and in year over year growth credits for members,” said Virtuoso President Kristi Jones. “It is also a key objective for Virtuoso’s investment -- the others being advisor talent recruitment and development and client acquisition and value. This mutual investment keeps all of us focused on achieving these goals. Best of all, our analysis shows a minimum of $9 return to our members for every $1 invested in this network.”
Jones said what Virtuoso discovered is that those agents who participated in the full marketing and communications program, not just direct mail and publications, experienced 80 percent higher production. “People who participated in our sales campaigns booked four times what their peers did,” she said. “This is all about production and focusing on entrepreneurs, as well as about serving clients, being profitable and helping preferred suppliers.”
At the same time, Jones pointed out this is a mutual investment by Virtuoso and its members. She acknowledged that some agents may not want to make such an initial investment. “We’re anticipating asking a few agencies to leave,” she said. “Our goal is across the board engagement…if we have some members whom this doesn’t work for, we are the wrong organization for them.”
The annual investment, which will be billed monthly, covers all membership charges including annual membership fees, branch fees, marketing charges, Travel Mart registration costs, training, and license fees for Composer. As an agency’s network production increases, its annual network investment percentage decreases. Yet increased production increases the amount of products and services an agency receives, effectively lowering the cost for these services as a percentage of production.
Virtuoso said the model itself reflects the original member agreements of the organization in 1988, but the number of products and services offered by the group has increased dramatically. According to Virtuoso, the majority of its members will be minimally or not affected by this new investment arrangement due to their current level of network engagement.
Upchurch said Virtuoso membership pricing has not really changed since 1988, with an initial member fee of under $1,000 plus branch fees and fees for various marketing and technology programs. The group also had mandated participation in at least some marketing and technology programs, as well as the annual Travel Mart in Las Vegas every August.
After making changes to the membership structure last year, Upchurch said Virtuoso felt it was time to membership an all-inclusive program. “We found those members who used all of the resources of Virtuoso get a much higher return on investment than those that don’t,” he said. “Now this really aligns the success of the member in their ability to grow their business directly correlated to their investment in Virtuoso.”
All members will receive direct assistance from Virtuoso’s regional sales and inside sales teams in reviewing the model for their agency and effectively applying services and benefits they may not have utilized in the past. “We are confident of the value of Virtuoso membership and this network,” said Upchurch. “The future demands a united, engaged, focused network. This inclusive agreement insures that we can continue to deliver on the vision of our entrepreneurial members and the expectations of our preferred suppliers.”
Upchurch said the new membership agreement aligns all of the things that Virtuoso has been doing for years, including the changes it made last year, and makes it simpler for members to figure out what the Virtuoso programs cost. “It’s a move to ROI as we grow the business,” he said. For more information, visit www.virtuoso.com.