Squirreled away in a rented broom closet, Gross worked the phones to recruit the company's first 50 agents while Warren sat hunched over a computer, making reservations all day. "I'd sign people up and tell them, 'I'll send this over to agent processing right away," recalls Gross. "Then I'd pass the information over to Randy and go laminate the card myself." Their first members were friends for whom they had booked travel during their college days--people who signed on out of loyalty and friendship, and who passed on the good word when their commission checks proved that GTI was not a marketing gimmick.
Membership fees rolled in, and Warren and Gross used that money to create the infrastructure they needed to properly serve their members--one that the outside world assumed was already in place. "The myth became reality," says Gross. They outgrew the broom closet and moved into a much larger but still modest space that accommodated the internal agents they were hiring to take calls from members. Those agents were all salaried staff since "we never wanted the outside agents to think that we're trying to charge them a higher fare because the inside people were getting a commission," says Warren. By the end of 1995, their first full year as an incorporated business, Warren and Gross had more than 1,500 independent agents and had sold $4 million in travel.
Keep Your Ear to the Ground
That they did not drive themselves out of business in those early days is nothing short of a miracle. Gross and Warren refused to slow down, often recruiting three or four new agents a day. Customers endured lengthy hold times on the phone, and internal agents, unaccustomed to handling 50 to 60 calls a day, were often rude. GTI's competitors had fallen into the same trap, and Warren and Gross knew that if they didn't attend to their problems, the company would risk alienating its independent agents.
The two men began to build the company according to what they were hearing from their members, who were also their customers and their de facto sales force. They developed a management team that reorganized their internal agents into product-specific teams, put the newsletter on a strict publication schedule, and created a new quality-control department. When their independent agents began complaining about long hold times, they had the phone system revamped for universal servicing, which allowed any employee on a team to call up information on members. "Our agents had liked dealing with the same person all the time, but they told us they would really rather have their calls answered right away," says Gross. A newsletter ad for a cruise prompted such an enthusiastic response that Warren and Gross organized a separate cruise department. Members' suggestions regarding the Internet spurred the creation of GTI's Web site, where independent agents can book their own travel. Now more than 28% of GTI's air reservations are handled on-line, which frees internal agents to handle more lucrative travel reservations in-house. Warren estimates that 80% of all referral agents make reservations at least once a year and that 90% of them renew their memberships.
Seize Opportunities Created by Growth
"If we sell it, they will come," philosophizes Gross. That has always been GTI's attitude toward suppliers, who keep close track of travel-agency volume. "The airlines get reports on all the agencies," explains Gross. "All of a sudden, we'd get closer and closer to the top of their list."
After the airlines capped commissions, in 1995, one way for agencies to boost their revenues on ticket sales was to earn commission overrides by increasing market share for suppliers. "We weren't a big airline in Orlando," says one executive from a major U.S. airline, "but I noticed that GTI was doing well above the average market share. What they were doing was a new concept for me, but it was obviously working for them--and for us." The airline put GTI on an override agreement--an incentive that gave the agency an additional commission--up to 5%, provided it gave the airline a certain percentage of its air business.
Club Med, too, noticed GTI on its radar screen. "Their district sales manager came in and challenged us," recalls Gross. "If we hit a certain number of reservations with them, then we'd get up to 17% commission and free trips for everyone on staff. We had a year to do it. We did it in two months." Avis negotiated a similar deal with GTI, setting up performance awards that the company shared with agents. "We've been in growth mode ever since we started with them," says Michael DeChello, regional travel-industry manager for Avis in Miami. GTI had learned how to mobilize its referral agents to pump up market share for suppliers, thus reaping the benefits that those suppliers reserved for a shrinking number of top producers.
