By Bruce Parkinson
ACTA says one large Ontario agency is losing $28,000 a month because of ‘special promotional incentive funds’ – or spiffs – awarded directly to travel agents rather than agency owners. But David McCaig says consortiums and owners are listening to a ‘wake-up call’ issued by ACTA last fall.
‘Spiffs might be liked by agents who see them as an additional source of income,’ said the ACTA President, ‘however, spiffs undermine the agency when the agency head has no idea they are being offered and paid to agents and often sent to the home address of the agent.’
McCaig told a Toronto forum audience that there were some complaints from agents when the issue was raised last year. ‘But these agents need to understand that by accepting these incentives they are working to put their own owner out of business. Most seriously, they can cause an agency to contravene their preferred supplier agreement when agents sell products that are not those preferred by the agency itself.’
McCaig says all major agency groups are now asking suppliers for information on planned incentives during the negotiation of preferred supplier agreements. They are working to ensure that incentives go to the agency owner for distribution rather than directly to individual agents ‘in a deliberate attempt to bypass agency management.’
The ACTA President says many owners are now ejecting sales representatives who come into their offices offering spiffs. ‘It’s about time,’ he says. ‘There may be a place for special promotional incentive funds but they must go through the agency head so all agreements are maintained and so the funds are distributed fairly and in keeping with the financial and sales goals of the agency.’