Then there's what we call our Live the Spirit program. Every month a group of volunteers we call service leaders come to Philadelphia for training on a specific subject -- nutrition, wellness, financial planning, whatever -- then return to their offices and give a Live the Spirit seminar. And every 18 months all the associates are invited to a Live the Spirit weekend.
We'll have seminars, shows, a dinner -- even a trade-show booth for career paths with Rosenbluth. People can chart where they'd like to be with the company in the future.
INC.: Career paths. That's the first time you've mentioned bread, as opposed to circuses. A skeptic would argue that all the rest is just frills.
ROSENBLUTH: I wouldn't agree with the skeptic. But if you want to look at tangible rewards, we instituted a pay-for-quality program not long ago, which is really a way to let associates determine their own salaries.
INC.: You better explain the connection -- and what you mean by determine their own salaries.
ROSENBLUTH: It's an incentive plan. They get a base salary, and then depending on the number of quality reservations they take -- I'll explain what I mean in a moment -- they begin to scale up their compensation. If you take 100 quality reservations, you're going to make more than if you take 80 quality reservations. After we began this program, average pay for reservation agents rose 32%, to the point where many of them were making more than their supervisors.
INC.: Ouch. Sounds like a good way for the company to go broke.
ROSENBLUTH: On the contrary, our costs dropped 4%. People were doing things right the first time, so we needed fewer people. And turnover declined because people were making more money. So hiring and training costs went down as well. It was all so obvious, which is bizarre. Sometimes the most obvious things take years to do.
INC.: OK, tell us what you mean by quality reservations. If a ticket gets the client where he wants to go at the lowest fare -- and if it's delivered on time -- hasn't the travel agent done a quality job?
ROSENBLUTH: There are a hundred different opportunities to make an error with every reservation. That's how complicated the industry has become. We requested an aisle seat for you when you wanted a window seat. We didn't order a special meal for you when we know you always get one. You're going to Chicago, but your car was rented in Topeka. Then there are questions like, Was the agent pleasant? Did she use your name? Did she offer the lowest airfare? Every one of these possibilities for error is checked.
INC.: Another source of stress, right? Checking all those items would give anyone a case of nerves.
ROSENBLUTH: That's where technology comes in. One thing we've done, for example, is develop software to reduce by 75% the number of keystrokes required for each reservation. That lessens stress on the associate and cuts down on the possibility for error. We've also developed a proprietary quality-assurance system to check every single reservation in real time. If the agent makes an error, it will come back immediately, and the ticket will never hit the customer. We can check 2,000 reservations an hour using the system. But more than that, if errors begin to occur, we can do statistical process control to find out where they're coming from.
INC.: Which you can then use to correct the problem.
ROSENBLUTH: Right. In some cases the problem lies with the client. For instance, a corporation might want all its travelers to use only one form of payment, say, one particular credit card. And the employees might not be doing that. That will show up as an error.
Anyway, quality reservations are only one aspect of our company these days.
INC.: What else are travel agents expected to do now that they didn't do before?
ROSENBLUTH: Essentially, we want to teach our corporate clients that T&E is a manageable expense. The travel industry has erected barriers over the years to keep information from clients -- for example, how much they pay per mile. We'll share that information; in fact, clients can get right into our mainframe and pull it out. It's theirs. Or we'll provide them with detailed reports on their travel, by department, by cost center, by anything, and then we'll help them lower the cost. For example, we might negotiate a special rate with an airline between two points at certain times of day. We can analyze which of our clients can take advantage of that, and let them know about it.
INC.: Surely any big travel agency can do that.
ROSENBLUTH: Maybe they could do some of it. Most travel agencies get their back-room systems given to them by an airline or leased at a reduced price. We didn't do that, because we didn't want to be indebted to a particular airline. And most aren't linked electronically to their clients. The technology lets us spot fare trends faster and get the information to our clients faster. If one trend enables you to save $100 a ticket -- and if a client has 100 people flying that route -- that's an awful lot of money saved.
INC.: We won't argue. Rosenbluth Travel already has quite a reputation for putting the client first -- you've been recognized as Service Company of the Year by Tom Peters. But there's a puzzle here. You've apparently built your company around proprietary technology and high-value-added service to customers -- yet we've spent most of our time talking about employees.
