Case Study: Losing the Largest Account

Premise

The situation the travel agency faced is not uncommon. As a service industry, the business depends on a web of contacts, the ability to deliver service, and the shared business objectives of the agency and client. With the loss of this one account, the travel agency’s future was immediately placed in jeopardy.

Discussion

The loss of a key account tests any owner’s business acumen. Positioning an agency so that it not only survives such traumatic events but may actually benefit from the experience is part of being a successful business owner.

The first step is to describe and understand the situation. Three tools are helpful in understanding the impact of the loss:

1 – List of Accounts by sales volume. Calculate the percentage of business each account represents to determine its relative value.

The loss of the corporate account, however, dramatically affects the profitability of the agency. The account represents a $240,495 loss in cash receipts. the agency will not be able to operate at the same level as in the past; many agencies do not quickly adjust to such operational changes.

Next Steps:

Equipped with the description of the situation provided by the list of accounts, business mix and operating budget, it is time to devise a plan. Before that, however, stakeholders in the agency must decide two basic questions: what kind of travel agency they want to be, and whether they want to grow or cut back.

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