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Distribution Strategy · FareHarbor

Rebalancing the Channel Mix

A consistently sold-out operator was handing significant commission dollars to affiliates they didn't need. Long-standing relationships made it hard to change. Over time, the numbers made the case.

Commission savings
~$920K retained
Affiliate share
27% → 7% in one year
My role at the time
Technical Account Manager
Skills
Distribution consulting · Data analysis · Change management

How I got here

Same as most of my best work: I earned the right to have this conversation before I tried to have it. When I picked up this account I focused on their priorities first. They had affiliate pricing complexities, reporting needs, operational questions. I dug in, got things sorted, and showed up consistently. By the time I was ready to raise a harder topic, they trusted me.

That trust was the only reason the conversation was possible.

The problem hiding in plain sight

This operator was sold out. Consistently. Demand wasn't the issue. The issue was where those bookings were coming from and what it was costing them to get them.

A significant portion of their volume came through third-party affiliates, OTAs and resellers that took a commission on every booking. These were long-standing relationships. Comfortable. The affiliates felt like reliable partners, and walking away from them felt like burning bridges.

But the math told a different story. When you're selling out anyway, every affiliate booking is a commission you paid for a customer who would have found you regardless. At that volume, the cost is real.

The conversation they didn't want to have

I wasn't asking them to cut off affiliates. I was asking them to look at the data together and think about what the right balance actually was. There's a difference between affiliates earning their commission by filling seats that would otherwise go empty, and affiliates filling seats at the expense of your margin when you were going to sell out either way.

The concern on their side was real: what if direct bookings don't replace them? What if volume drops? These aren't irrational fears. Affiliates feel safe because the bookings are visible and reliable. Direct growth feels less certain.

So we started small. Pulled back a little. Watched what happened. Shared the results. That pattern, move carefully, show the data, use it to build momentum, was the same approach I used on other accounts. When the first round worked, it became easier to commit to the next.

Booking channel mix, year over year
2018, starting point
Direct online 72%
Affiliate / OTA 27%
Offline 1%
2019, after channel work
Direct online 93%
Affiliate / OTA 7%
27% → 7%
Affiliate share reduction
~$920K
Commission savings retained
15–20%
Margin recovered per booking
~$920K
In commissions no longer paid out to affiliates, same booking volume, better margins, and a channel mix the client actually controls.

What made this work

The operator had long-standing affiliate relationships they cared about. This wasn't just a financial decision to them, it was a relationship decision. Respecting that, and not pushing them to make a dramatic cut all at once, was the only way this moved forward.

The pattern across my best growth work is the same: focus on the client's stated needs first, build real trust, then introduce the harder conversation once you've earned the credibility to be heard as an advisor rather than a salesperson. This account was no different.

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