Taking Care of Business

TRAMS. It’s a familiar name in almost every travel agency. Eighteen years ago, the company created Back Office, a system that automated many of the functions performed manually in travel agencies. Today, TRAMS is staying on the cutting edge with a second product, ClientBase Plus, a customer relationship management and booking tool that is taking off as more and more agents transform themselves from order takers to full-fledged marketers.

What many may not know about this well-known industry company is that Los Angeles-based TRAMS is not part of a large corporation but is still owned and operated by its founder, Lee Rosen, who started TRAMS in 1986 and nurtured it to a thriving enterprise with $9.5 million in annual sales.

Rosen’s first and second hires — Dan Palley, chief technology officer, and Sharon Meyer, vice president — are still with TRAMS, providing continuity and a corporate culture that is akin to a tight-knit family, a feat in today’s unsettled travel industry. With 73 full-time employees and 11,000 agency subscribers, TRAMS is a dominant player in travel agency technology. Its success, say observers, is because TRAMS addresses — and even anticipates — the needs of agents in an industry that has seen more than its share of ups and downs.

“There’s no question that agents have an enormous respect for TRAMS,” said industry consultant Bob Joselyn, of Joselyn, Tepper & Associates in Scottsdale, Ariz. “It is by far the leader and in a dominant position, and it has done so with good products that are tuned into what the market needs ... And it has backed it up with training and support.” Rosen is a Southern California native and he lives with his wife and three children about a mile from where he grew up. His father was in poultry distribution, and some of Rosen’s first memories are of sitting in his father’s office listening to him on the phone with clients. Later, he accompanied drivers on their routes, delivering cases of chickens. Rosen’s first taste of the business world was working for Compare Data Systems, a company that developed a program that automated small insurance agencies. It gave him an insider’s view of how technology could make businesses more profitable and efficient. In the mid 1980s, Rosen looked at a variety of industries he felt might be ripe for automation, including travel agencies.

Rosen said agencies at the time were prime targets for a PC-based, menu-driven automation system that was easy to use.

“I took a liking to the travel industry,” he said. “Maybe it’s because the spirit of a typical U.S. agency is entrepreneurial.”

First to be hired was Palley, who wrote the codes and programming for Back Office, and continues to manage the programmers and software development.

Meyer, the number two employee, took care of administrative duties. Today, she is vice president and product manager for ClientBase, including agency support services, which get high marks from users.

“TRAMS has a high degree of pride in their products and Lee has developed a great service culture,” said Ellie Knight, director of technology and training for Signature Travel Network, a consortium that works closely with TRAMS (see sidebar). “They have a corporate culture of support of subscribers and innovation. They define a need on the agency side and build technology to meet those needs.”

The Back Office Revolution
In the early days of the company, Rosen, Palley and Meyer worked out of a ramshackle building not far from where TRAMS’ offices are now located near Los Angeles International Airport. However, it was quite a different atmosphere back then. “To say it was a garage glorifies the place,” said Rosen.

The three settled on the name TRAMS, which stands for Travel Agency Management Systems, because “it’s something people could remember easily.” Not coincidentally, it is also “smart” spelled backward.

From the start, the Back Office system did well. Consortia endorsed it, and the GDSs, which at the time had their own back-office programs, one by one began endorsing TRAMS. In some cases, they dropped their back office products in favor of TRAMS. Industry consultant Joselyn said TRAMS “dramatically shaped the way business is done in the agency community. People talk about Bob Dickinson of Carnival and Herb Kelleher of Southwest as having an impact, but Lee is often not recognized for what he has done.”

Joselyn said that when the back office system emerged it was priced much lower than competing systems and with support and training that others could not match. “I often kidded Lee that the adoption rate could have been higher if it were more expensive because people didn’t trust that something that was like $90 a month could be so good,” Joselyn said.

Very soon, TRAMS had penetrated the agency marketplace and dominated it. (According to a 2003 ASTA survey, TRAMS had 85 percent of the market share in agency back office systems.)

The reasons for its success, Rosen said, is that the back office product was written with “open architecture,” allowing users to customize it, and it is “scalable,” meaning that agencies small and large can use it as they grow or are forced to downsize, as so often happened in the last few years.

While the basic application does not change, TRAMS continues to refine the back office product, with three major releases a year.

Then There Was ClientBase
Eight years ago, Rosen began seeing that the elimination of commissions and the emergence of the Internet were going to force dramatic changes on the industry. Agents were destined to evolve from transaction-driven retailers who took orders for airline tickets, cruises and tours to proactive travel marketers, he said.

At the same time, the Internet emerged with online booking capability and consortia and agency networks started offering intranets with links to preferred suppliers’ inventory and customized promotions.

Rosen saw a need for a customer relationship management (CRM) tool built specifically for travel agents.

“The off-the-shelf programs do a great job of managing contacts with consumers, but the fact is that we’re an industry-specific product and I believe those are the ones that will win the game,” he said.

TRAMS’ program, ClientBase Plus, is today a complete CRM tool that also provides Web-based booking capability through a feature called “Live Connect” that integrates the booking engines of hundreds of suppliers.

“We came up with it because so many agencies were looking for an efficient way to process Web-based reservations,” Rosen said. “Typing the logon, the password data and then all the client and passenger details into the booking engine is laborious, but then once the reservation is completed taking all the reservation details and re-entering them manually into some type of processing system [typically a limited GDS one] was prohibitive.”

ClientBase Plus automates the entire process, he said.

“For example, most of the major tour operators have agent Web sites with booking engines. If agents don’t use ClientBase, they typically would use a passive GDS segment as an interface to the back office, which is a pretty antiquated way of doing things,” Rosen said. “We have a Live Connect to Pleasant so the agent doesn’t have to type in who they are or any client data. We electronically hand off the booking to Pleasant, then, Pleasant gives us all the reservation details to import back to the database. Once there, the agent has the ability to manage the reservation the way the agency wants to manage it, to run management reports, follow up with welcome home letters, analyze bookings, integrate with accounting and more.”

Coupled with booking capability are ClientBase’s customer relationship management tools that allow storing of client information, history and preferences and tracking of marketing activity. Agents can promote a particular cruise or tour with a direct marketing campaign by finding the interested clients and prospects in the database and sending them direct mail or e-mail promotion.

New features are constantly being added. A recent partnership between TRAMS and Beaverton, Ore.-based Passport Online is designed to improve tracking of client buying habits and enhance the effectiveness of e-mail campaigns. These types of features appeal to travel agencies that are taking marketing seriously, as more and more are each year, Rosen said.

In the beginning, when ClientBase was strictly a CRM tool, agency owners and managers were excited about the product but found if difficult to get frontline agencies equally excited, said Meyer.

“Now, I’m finding it almost the reverse — frontline agents are the ones asking for it, especially because of the links to booking engines,” she said. “There’s been a real cultural change in agencies and a lot has to do with agents becoming better sales people and also that they work on incentive plans rather than straight salary. In the last year we’ve seen a huge uptake in usage.”

As with Back Office, TRAMS is keeping the ClientBase fees low and on a per-month basis. Pricing starts at $85 per month for agencies with up to eight users.

Training is a key to successful use of the system because there is often agent resistance to learning new technology, Rosen said. TRAMS maintains offices at Chicago and Atlanta airport locations that are accessible for users who fly in for two-day training sessions. Also available is independent Web-based instruction.

Among TRAMS’ innovations is the creation of an 80-person force of independent consultants — typically, travel agency owners or managers well-versed in TRAMS — who moonlight as trainers and visit agencies nationwide to personally instruct management and staff on how to benefit from the products.

Each year, TRAMS also holds a conference, named Technology University or Tech U for short, that draws hundreds of travel agents for training sessions and networking. The 2005 conference is March 29-31 in Las Vegas.

Despite the training, adoption of ClientBase has not been as swift as Back Office was years ago, said Rosen. There are about 3,500 agencies employing 40,000 travel agents that use the system. But Rosen sees more rapid growth as suppliers move away from GDSs for distribution and agents follow by booking in different venues (see sidebar). TRAMS is gaining about 20 new agencies a week as subscribers to ClientBase.

He credits the entrepreneurial spirit of agencies that are getting more marketing savvy and recognize the need for more sophisticated technology in their businesses.

As Rosen put it: “I would make the argument that if agents are still in the transaction business, fine, but if they want to evolve their businesses, they must become CRM-based and stronger marketers, and run their operations more effectively and efficiently.”