Jon Harper operates a group and incentive
business at East Town Travel in Milwaukee, a business that focuses
on, well, practically everything, it would seem.
take theater trips and go on upscale art and architecture tours all
over the world, he said.
For baseball fans,
there are spring training trips, baseball cruises and so-called
"fantasy camps" where participants play the game with current or
former professional players. Other tours are "radio come-along"
itineraries sponsored by a local station.
There are journeys
that fit the profile of social and ski clubs, yoga groups,
corporate trips for current or retired employees and, at the top
end, custom trips for members of a private club.
Harper runs a small
inbound business, too, as the official operator for Frank Lloyd
Wright tour programs featuring the work of the architect, who was
born and worked in southern Wisconsin.
That's a lot of
variety, adding up to 80 to 100 groups a year for what is, in
revenue terms, a relatively small agency. East Town Travel grosses
between $5 million and $7 million a year, Harper said, and groups
are about 40% of that. However, he added, significant numbers of
these trips are one-day and weekend getaways.
Four of the
agency's 11 employees are devoted to the group and incentive
operation. Five percent of the business is corporate
Harper came to the
travel business (his third career) because his wife, Penny, was
co-owner of an agency and he had managed some incentive trips from
the "other side," as the corporate buyer. When he and his partner
sold their food service company in 1985, the Harpers bought out
Penny's partners. Jon opted to launch East Town's group business,
where he is vice president of marketing; Penny is president. "No one in town was doing a decent job with
groups," he said.
He started by
promoting incentives to East Town's leisure clients who also owned
businesses, and he had a lucky break as a result of an encounter
with the owner of a local radio station.
In the years since,
for new business he also has relied on word of mouth, cruise nights
or other private functions hosted by destinations plus lots of
targeted direct mail. But he does no advertising because it doesn't
pay, he said.
includes the agency's newsletters and mailings arranged by
Ensemble, of which the agency is a member.
In addition, the
manager of the Milwaukee Athletic Club invited the agency to
relocate into the club a year ago. That connection gives East Town
access to the club's 1,500 well-to-do members.
The agency has
three Web sites, for groups, cruises and general purposes. It
encourages clients to use the sites for trip research but not to
book. "We want people to come to us," Harper said.
Harper listed three
key factors in East Town's success:
agency team. The average tenure among staff is 20 to 25
years, and the youngest employee is 47 years old.
"We try to have
fun," Harper said. "We're downtown, and staffers are never asked to
work weekends; they work 9 to 5. There is a lot of fam time, and
there is flexibility."
suppliers. Harper said he makes a major investment in
entertaining his major suppliers. It is important to learn from
them when they want to move space, because "you make money on the
buy, not on the sale," he said.
"Suppliers are a
key part of the formula," he added. "If they know you are
producing, it is amazing what they'll do for you."
itineraries. "We look at trips from the bottom up,
[asking] what would you like if you were on that trip? ... We keep
adding and changing things ... customers will pay for getting what
Harper quipped that
his long-term goal was to remain vertical. However, after some
rumination, he said, "I will probably work after I 'retire.' " He
explained: "If you own a business, the business owns you. There are
obligations to the staff, so we will find ways to ensure they are
has gotten a lot of what he wanted when he switched to travel, and
that included the chance to travel more with his wife and
"We've had a lot of
fun," he said.
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architecture in Germany
The following itinerary was created by
Milwaukee's East Town Travel for a private art museum group. It
features the works of German-American artist Carl von Marr. Jon
Harper, the agency's vice president of marketing, said he used
Ensemble's on-site suppliers to make exclusive features possible.
Also, coincidentally, Harper is the artist's great-nephew, which is
why Harper's middle name is Marr. The trip is set for
1: After arrival in Frankfurt, tour members are met at the
airport and transferred by private coach to the Hotel Eisenhut in
Rothenburg for a two-night stay. In the afternoon, they stretch
their legs on a guided walking tour of Rothenburg (shown at right),
one of the former imperial
towns on the Romantic Road. After World War II, the medieval town
was almost completely reconstructed.
2: The group travels to Bamberg, a work of art in itself
with 2,300 protected constructions that range from the Romanesque
to the Baroque periods. Bamberg is on UNESCO's World Heritage list.
The town is also the home of the Messerschmidt family, von Marr's
cousin. Lunch is at the Hotel Messerschmidt. The group continues to
Nuremberg, Bavaria's second-largest city. The home of artist
Albrecht Durer, Nuremberg is a city with a medieval flair. It was
once an imperial residence and international trading center.
Numerous Old Town buildings, monuments and artworks reflect its
former importance. Tour members also visit Schloss Faber-Castell to
view von Marr's largest work.
3: The group travels the Romantic Road en route to Munich.
The road winds its way from the Main River in Wurzburg to the
foothills of the Alps. Each bend in the road reveals a variety of
landscapes and towns where time appears to have stood still for
centuries. The group stops to tour Dinkelsbuhl's Old Town, which is
surrounded by fortifications. In Oettingen, the group lunches at a
fine restaurant with an outdoor terrace and beer garden. In Munich,
there will be time for a walking tour of the old part of the city
before check-in at the Hotel Koenigshof, a member of the Leading
Hotels of the World and the group's home for four
4: A Munich tour includes the Palace Nymphenburg, the
Marstallmuseum with its Bauml porcelain collection and a guided
tour of the Nymphenburg porcelain manufacturing facility.
Nymphenburg, the summer residence of Bavaria's Wittelsbach dynasty,
was built by Ferdinand Maria, elector of Bavaria, in 1664. The
palace was a gesture of thanks to his wife for giving birth to the
successor to the throne, Max Emanuel. One of Nymphenburg's most
noteworthy sights is the Gallery of Beauties. Between 1827 and
1850, King Ludwig I commissioned paintings of the most beautiful
women of his time; for the first time, commoners as well as
noblewomen were depicted. The Marstallmuseum's Bauml collection
documents the development of the porcelain factory from its
founding in 1747 by Elector Max III Joseph until about 1920. The
museum visit is followed by a private tour of the porcelain
manufacturing area, which has produced porcelain products for more
than 250 uninterrupted years. There is shopping time before lunch
at Restaurant Palmenhaus in the Nymphenburg Garden. The rest of the
day is free for group participants to do what they wish.
5: The von Marr family tour begins with a visit to the
world headquarters of the Drom essence and fragrance maker, which
is owned by Carl Bruno Storp and his children. Storp is von Marr's
grandson. The Storp family fragrance business is one of the largest
in the world. The group has the opportunity to marvel at Storp's
perfume bottle collection. Following lunch at Restaurant Isarbrau,
the group goes to Storp's house for coffee and drinks and to see
his private von Marr collection. This will be followed by a visit
to von Marr's family home, Kirchturmplatz, and grave site in
6: The group will see the medieval section of Munich, the
most exclusive shopping streets and the Olympiapark, site of the
1972 Summer Games. The itinerary includes another famous von Marr
work, as well. The afternoon is left free. The final dinner and
reception is set for the gourmet Restaurant Koenigshof. From this
location, the group will enjoy a nighttime view of many landmarks,
including Karlsplatz and the Palace of Justice.
7: Tour members go home or take an optional extension to
Prague, Czech Republic.
The Perfect Itinerary is an example of an itinerary an agent
crafted his or herself, not available anywhere else, but can be
duplicated by other agents to sell to their clients. To send an
example of an itinerary you've customized, e-mail to [email protected] with "Perfect Itinerary" in
the subject line.
In my first column on benchmarking
your agency, we explored the multifaceted benefits of benchmarking.
Now it's time to get specific. How many times over the years have
you heard someone say that an "agent" had to generate revenue at
least three times their compensation for the agency to make a
Too many agency
owners and managers actually believe this is true. It might be true
for your agency, but it would be little more than
whether this rule of thumb seems simultaneously logical for an
agency in downtown New York and one in Larned, Kan.
Clearly, while the
costs would be wildly different between New York and Kansas, the
revenue opportunities per transaction probably would not
matter much if no one made decisions based on this, but that is not
the case. Some owners and managers make staffing decisions based on
this rule of thumb, and far too many use it as a basis for an
incentive compensation system.
The ironic thing
about accepting a "magic multiplier" is that it is so easy to
calculate your own multiplier. Forgetting employee benefits for a
moment, simply add your desired (and reasonable) annual profit to
your annual expenses and divide this total by the total annual
compensation to your sales agents.
It is beyond
obvious that by multiplying an agent's annual compensation by the
multiplier just calculated yields what, on average, an agent must
produce in revenue to cover costs and deliver your minimum desired
Of course, all your
sales agents must achieve this multiple for you to achieve your
In fairness to the
magic multiplier of three, your multiplier probably should not be
much higher than this.
For example, if
your personal multiplier is 5.1, it is likely that your
administrative, support and/or overhead costs are too high for what
is a reasonable expectation for revenue generated by your sales
In fact, for those
using a multiplier as a basis for an incentive program, I recommend
that the multiplier calculation be explained to employees and that
it be recalculated periodically.
Show employees that
if they can figure out ways to reduce expenses, the multiplier will
become smaller, thus reducing their minimum
benefits be added to the equation?
benefits are relatively equal, it doesn't make much of a
difference. Adding them in will result in a smaller multiplier, but
as long as you are consistent it doesn't matter whether you include
benefits or not.
benefits are relatively equal, you can just use base compensation.
If benefits are unequal, including benefits makes sense.
What about bonuses?
column I have used employees' incentive compensation as an example
of how the multiplier is frequently used.
It's typical to
award bonuses to agents who exceed their compensation times the
multiplier being used.
This is not an
endorsement of this simple approach to incentive compensation
programs -- the appropriate design of incentive compensation should
generally include other factors.
There are many
circumstances where the simple application of a multiplier, even
when it is your own, doesn't address all the relevant
As an example,
let's hypothetically assume that your multiplier is 2.5. Employee A
is being paid $30,000 with a revenue expectation of $75,000, an
expectation she hits exactly. Employee B is being paid $50,000 with
a revenue expectation of $125,000, which she hits
Are these two
employees equal because they both met their multiplier expectation?
Employee A is
contributing $45,000 to support and profit while employee B is
Using a simple
multiplier approach for bonus incentives works best when base
compensation among employees is close to the same and employee
performance does not vary wildly.
multiplier of three? Take the magic out and calculate your own
multiplier based on your costs and profit objectives. Perhaps most
important, if you use it for agency management purposes, think
about implications carefully.
Bob Joselyn is CEO of Travel Agency Marketing Solutions and
consulting firm Joselyn Tepper & Associates, both in
Scottsdale, Ariz. E-mail him at [email protected].