ne year ago, Jack Mannix began work as
the president of the travel agency co-op Giants. He arrived at a
difficult time, replacing the embattled Sue Shapiro, whose name had
become synonymous with the organization.
When he started last year, Mannix said, "The real issue is
growing sales, making sure to bring value to suppliers and making
sure they know it."
I spoke with him on his first anniversary last week. He said the
past year has been exciting and rewarding, "and God knows, there
has been plenty to deal with." His biggest challenges were the same
that almost every agency faced these past 12 months: Refining
selling skills. Marketing in an environment that, due to terrorism
and the weak economy, had significantly changed. Adjusting to
working harder for the same amount of business.
The approach he took to meet these challenges was one every
agency should consider -- he pared down the number of preferred
suppliers that Giants works with by almost 60%. "We completely
restructured. We had 75 cruise and tour preferred suppliers. We now
The benefits, he said, extend to members, suppliers (the
remaining ones) and clients. "When we sell into fewer preferred
suppliers, three good things happen: We deliver more business for
the suppliers we retained, we earn higher levels of commissions for
ourselves and higher levels of support for our clients. Because
we're more focused, we've strengthened our relationships in all
directions, and become more important to everyone."
But there's another dimension to his approach that serves Giants
members well: Suppliers know that, as nice a guy as Mannix is, he
is not afraid to walk away from a relationship that becomes less
than satisfactory. It's a reputation he cultivated when at AAA, and
his approach in this regard has been consistent.
When he made the supplier cuts last April, Mannix was careful to
explain his actions, and said his decision to drop suppliers was
not meant to reflect negatively on any firm. He had, in fact,
announced his intention to reorganize in advance, and laid out the
criteria he would be using to reevaluate supplier relations during
renegotiations: commissions, marketing funds, systems for handling
customer problems, quality of service to agencies, product quality,
financial security and added-value customer benefits. By laying out
the terms of business he was looking for clearly, he set up an
inherently competitive environment for the negotiations that would
work to his members' benefit.
Though he was careful to allow suppliers to save face during the
process, he does not shy from sending symbolic messages. When Hertz
cut travel agents' commissions to zero last April (and other car
rental companies followed), Mannix responded by cutting Hertz from
his preferred-supplier list. It was, plain and simple, punishment
for initiating the cuts, and was done despite the fact that Hertz
was to sponsor a keynoter at the Giants annual meeting later that
month. (Giants declined the sponsorship, as well.)
It's important to understand that Mannix only can operate as he
does because a.) he understands what suppliers want out of a
relationship and delivers it to them, and b.) he understands what
suppliers want out of a relationship, and delivers it to them.
(It's analogous to understanding the three most important
considerations in real estate: location, location, location.)
Without that fundamental understanding of supplier partnerships,
his approach might seem high-handed.
He also understands that none of his strategies would work if he
didn't have quality agencies to back him up. "We've become more
analytic in our approach to prospecting for new members," Mannix
said. "We're more discriminating but our analysis also includes
demonstrating what we can bring to the table for a prospect. The
bottom line is we're looking for good businesspeople who have a
good track record for being high producers."