How a former sales director changed course to embrace his entrepreneurial nature as a travel franchise owner
Noam Meppen has hit the ground running with his Expedia CruiseShipCenters franchise business, which opened at the end of 2014 in Phoenix, Arizona. Noam, who has a background in consumer electronics sales, is already planning to open two more Expedia CruiseShipCenters in the city and is scouting two potential locations. In this interview, he discusses what it takes to get a franchise off the ground, as well as his vision for success with his business going forward.
What were you doing before becoming an Expedia CruiseShipCenters owner?
Up until the end of last year I worked in the consumer electronics industry. I was senior director of sales and marketing, as well as head of North American operations for an electronics manufacturer that is overseas. I managed a sales team and marketing and PR efforts for the U.S. My background prior to Expedia was mostly in sales and sales leadership. All of my experience is either in electronics or in the movie business on the home video side — movies on DVD and Blu Ray. I worked for Amazon for a period selling the Kindle, and I also worked at Sony helping with Vaio laptops and Sony Android tablets.
How did you first learn about Expedia CruiseShipCenters?
I first learned about Expedia CruiseShipCenters in 2012, and after I did some research I decided it wasn’t the right time. I put it aside for about two years and then about a year ago, in the beginning of 2014, I reengaged with Expedia CruiseShipCenters. In April of last year, I went to Vancouver for a Discovery Day to learn more about the opportunity.
What made you want to open one?
I like the brand strength of Expedia. I liked the fact that the overhead investment was relatively minimal compared to other retail businesses — because there is no investment in inventory and you don’t have an overhead cost for labor since sales are commission-based.
I wanted to be my own boss and not be in the corporate political dance anymore. I also wanted to work in the travel business because I’ve always had an affinity for travel. This opportunity allowed me to build a business, develop equity for myself and do it in an industry that I have a true passion for.
What do you like about the management team?
They do a Discovery Day for prospective owners, where they invite in people who are sniffing around.
I flew up to Vancouver, and in the morning there was a series of meetings by various functional heads — marketing, sales, operations, all of whom gave a tour and demos. At the end of that day, each of the prospective franchise owners, whether a single person or a couple, met with a senior member of the corporate team. The whole point of it is a two-way evaluation; we are both evaluating one another. I liked the management styles, personality and approach that I saw.
I think the day after, they have a happy hour. Then I got a follow-up call from the VP of franchise sales who said, “We’d like to do business with you and offer you a franchise.” I left knowing that I wanted to do this. I went into the process of getting a territory locked down.
What makes Expedia CruiseShipCenters unique?
In the cruise sales segment of travel, there aren’t a lot of retail players. Cruises are usually sold through travel agents — maybe 70 percent consist of call centers which are farms of desks making calls. Those are typically big operations, and they are not franchises: Vacations To Go, Costco Travel, etc. It’s a churn-and-burn model. There are a few travel franchises that are home-based models with solo operators. We’re different in that it is a brick-and-mortar store located in a shopping center, and there is a sales staff that works under the franchise owner, with commissions split between the owner and consultants. This model allows me to scale and open a couple of locations in the city and generate more revenue and wealth.
What is the key to scaling up the business?
Recruiting, onboarding and constantly coaching and training. There is no way one person can do all the sales and marketing and handle all the other aspects of the business. There aren’t enough hours in the day. The more strong people you get on your team, the more you can spread your marketing costs across a larger sales volume.
Who is an ideal consultant?
The ideal person is someone who does not need immediate income. An example would be a person with a spouse who is currently working, and they are passionate about travel and would like to monetize their interest. A typical candidate is a woman between the ages of 30 and 60, whose husband works and whose kids may be in high school or off to college.
How do you find them?
I find people by networking and by advertising in local publications near my store in North Scottsdale. I have also used Craigslist to advertise opportunities.
What are your growth plans for Phoenix?
I have one location and plan to open two more in Phoenix. I also have two other territories on hold. My commitment is to have three locations by 2020. Phoenix is a massive city. The other two geographies are both 30 miles away — 30 miles west and 30 miles south. People will only go so far, stores do a lot of business with people who live within two to three miles. The true magic of this system, and why it is different, is the credibility of having a location the customer can visit. We also host customer events in the store. Next week we are doing an event with Princess Cruises that is Alaska-themed. If your nearest store is 30 miles away, you are not going to that, but if it’s down the block, you will go.
What do you enjoy the most about the business, your staff and your customers?
I like the freedom and the flexibility of my schedule. I am still in ramp-up mode, so I don’t have a lot of free time, but I have control on how I spend my time and money within some guidelines. I have encouragement from Expedia; they want me to do certain things and leverage certain marketing channels. Also, I really enjoy the travel industry. I have true curiosity and passion for the product I am selling.
Where have you been?
I have been to six continents and 35 countries. I’ve lived in Seattle and Washington, D.C., and grew up in California. I love Barcelona, it’s probably my favorite city in the world. My favorite cruise is to Alaska; it is amazing. I love travel in general. Singapore is also a very neat place. I always like to go to other parts of the world and see new architecture and new people. I love to do that and help others do that.
Why do customers come to you?
We’re not cookie-cutter. I’ve planned some complicated trips with seven to eight components with six family members and a lot of tight schedules. It takes a fair amount of expertise and coordination. Customers get the benefit of the expertise, and we sometimes have access to better prices and amenities because we are part of Expedia. Typically, the pricing we offer is the same pricing you would pay directly, so it doesn’t cost customer extra, but they get a lot more service.
What kinds of customers do Expedia CruiseShipCenters draw?
We want to be known as the cruising expert in the community, which tends to be more affluent and a little older. However, there are people who take cruises in their twenties and people who take cruises with young kids. It’s not a narrow demographic.
What are the key activities that drive results for an owner?
You need to put yourself out there. You need to be comfortable speaking to a crowd, and you have to believe in the service you are offering.
How does the Expedia CruiseShipCenters headquarters team help support your business?
I think the biggest value is on the product and the marketing side. They develop promotions, which they negotiate on our behalf with the major suppliers. They also provide operational support, which is helpful, but I think they excel the most at marketing and operations. When you have nearly 200 locations under the same brand, as Expedia does, they have the power to negotiate the best pricing and packages, so if a customer is coming to us to evaluate a travel package, we can hold our own and win on pricing and amenities. Also, they have the scale to negotiate better commissions and better support. That is a big piece of it. There are systems and operational support that are great. The team is made up of 100+ people in Vancouver who are all concerned about us and definitely support all aspects of the business.
What are the biggest challenges?
I think that the recruiting side of it is tougher than I anticipated. It’s the biggest challenge I have faced, and they warned me. They were very forthright, even before I decided to do this. The ones who figure out training and onboarding will find that sales follow. It’s all about convincing the right kind of people to become consultants.
What do you do for fun when you’re not working?
I love hiking, I love nature. I love cars, but travel is my first true interest and passion. When I turn 40, I am going to Yellowstone and the Grand Tetons. I like wide-open spaces.