In 1999, Volkswagen AG’s Audi division was searching for a hot way to introduce its TT sports car, already a hot seller in Europe, to U.S. consumers. The trouble was, the German carmaker didn’t have a version that would satisfy the U.S. government’s environmental pollution standards. It also needed dealer support and positive articles in the automotive press. Audi called on West Des Moines-based ITA Group for help.
ITA negotiated with the U.S. Department of Transportation to allow 35 of the cars to be shipped to Hawaii. The company also arranged tour packages for automotive journalists and dozens of Audi’s top U.S. salespeople so they could travel to Hawaii to drive the car.
Having the connections to bring together the national media, the U.S. government and Audi’s dealership network is an unusual mix, but it’s one example of how ITA Group, once merely a travel agency, has expanded far from its roots.
Led by President and Chief Executive Steven Chapman, who holds a marketing degree from Drake University, ITA has worked to diversify itself into the business of motivating employees toward stronger, more efficient performances.
As a result, ITA is marketing itself as a tool that can help companies win new customers and capture market share. In a sputtering economy, that message is getting heard.
Its customers include a who’s who of American businesses. GE Capital, the finance unit of General Electric Co., Coca-Cola Co., Motorola Corp. and Solutia Inc. are among ITA’s clients.
Moving from travel-related services to employee motivation is a curious transition, but one that is already paying dividends.
The last 12 months have been among the worst ever for the travel industry as customers chose to stay closer to home and businesses keep their wallets closed. However, for ITA, sales and profits have never been higher.
The company had sales of $132 million in fiscal 2002, which ended in September. About half of its profits come from outside of the travel industry. More than 70 percent of ITA’s sales came from clients outside Iowa. Chapman declined to divulge the company’s profits.
Within its travel business, ITA moved away from being paid by airline commissions about six years ago. Instead, the company charged customers who use its travel services a flat rate, Chapman said. That move, in addition to its motivation programs, has helped shield ITA from the effects of recent cuts airlines have made in commissions that are paid to agents.
“We don’t work for the airlines; we work for our customers,” Chapman said. “We realized, why should we be paid by the airlines?”
ITA helps companies improve profits, employee performance and customer satisfaction, largely by developing innovative programs to motivate workers.
For example, ITA is working with camera and copier maker Canon Inc. to help salespeople at retailers such as Best Buy Co. learn more about Canon products through training programs to boost sales.
“If you know a product, and you know it better than other products, then you’re in a position to recommend it,” said Thomas Mahoney, ITA’s executive vice president of sales and marketing.
To encourage the Best Buy sales staff to learn about Canon products, ITA is creating programs that offer them vacations or other prizes in return for selling more Canon products.
Chapman stresses measurable results as one of the keys to ITA’s success. Every program that ITA offers is measurable in some way. For the TT’s introduction, Chapman said success could be measured by how many dealers attended the event and, more important, how many ordered TTs for their showrooms.
“There has to be a return on a company’s investment,” Chapman said.
For automotive customers, ITA has developed a test for mechanics. The test is used by some auto repair centers as a certification process. As mechanics learn, their progress is measured by the exams. More knowledge generally leads to higher pay. Workers are motivated to learn more, and repair centers are able to offer more services to customers.
“We want to make people want to learn,” he said.
Another measurement tool ITA offers is Web-based programs that let both workers and corporate executives check in to see how sales by an individual are going.
A Canon executive, for instance, could visit a Web site ITA administers that lets him see how many cameras a particular salesperson at Best Buy has sold. That Best Buy worker can log on to the same site to see how many more cameras he needs to sell to win a vacation.
Every ITA employee holds stock in the company, which Chapman said helps workers feel that their job performance contributes to their own financial well-being. Each employee receives 7 percent of his or her annual salary in ITA stock.
For the near future, Chapman’s goal is for travel-related services to continue to shrink as a portion of ITA’s sales. He’s focused on achieving annual sales growth of 10 percent, which would increase profits by as much as 15 percent a year, he said. Employment growth is expected to be near 8 percent.
Chapman said ITA is poised to expand the amount of services it offers to the technology-related companies, which typically have large sales forces.
“Tech is going to come back,” Chapman said.
ITA Group, a history in brief:
ITA, which was founded in 1963 by Rudy and Judy Berg, now has 430 employees in 11 offices around the country. The company began by handling group travel packages for Des Moines’ insurance industry. From there, the company began offering incentive travel packages as a way to help its customers sell more insurance products. By the 1980s, the employee-owned company had 100 workers and offices in Chicago, Detroit and Dallas that served customers in the automotive, financial services and pharmaceutical industries. Now, it also has customers among technology and telecommunications companies.
ITA specializes in developing programs that help businesses maintain customer loyalty, build market share, reward strong employee performance and improve worker training. It also assists clients in introducing new products.