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 have 32."

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."


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