Last year, when total ARC sales by travel agencies dropped by more than 17%, Montrose Travel’s business grew.
Joe McClure, president of the Montrose, Calif.-based agency, told Travel Market Report that a lot of the credit goes to the reward redemption technology that it has developed for 20 million Visa and Mastercard holders.
In 1995, Montrose Travel agreed to provide fulfillment services for Payment Systems for Credit Unions (PSCU) Inc.’s credit card reward program, called “C U In the Air Miles” at the time and “C U Rewards” today.
“We had to build an online redemption program, and when we started building the engine, we didn’t know a lot about the category,” McClure said. “So we just did things that we thought were logical.
One of those logical things was something that had never been done before.
“We figured that somebody might want to redeem points for an airline ticket and take along a spouse,” McClure said.
That would be a messy process. The reservations wouldn’t match up and the couple likely would be unable to get seats together. So Montrose created technology that would allow users to redeem points for one ticket and pay with a credit card for another in the same transaction. The creators had no idea that they were breaking new ground.
“We didn’t know that this would be as attractive as it ended up being,” McClure said. “The word-of-mouth spread through the loyalty category.”
Financial institutions with rewards programs and the marketing companies that promote them started calling Montrose. The single deal with PSCU blossomed into a new division.
“The way we built the core platform allows us to private-label it for anybody,” McClure said. “It’s an easy integration.”
The platform allows the financial institution to create any “fences” of its choosing around points redemption. For example, the card-issuing bank might require a 21-day advance purchase, or it might allow redemption for any fare, any time, or it might opt for a tiered model. “It’s one piece of technology that can go to any bank, but it’s not just a me-too product,” McClure said.
The redemption business has a dedicated call center. But it’s a call center with a twist. “We allow cardholders to develop relationships with individual agents,” McClure said. “We’re not impersonal. We want you to love redeeming travel with us.”
A cardholder can get the agent’s name, direct line and e-mail address and work with the same person every time he or she calls.
As a result, Montrose has experienced a “spillover” effect. One in five redemption fulfillment customers subsequently calls the agency for a traditional transaction, McClure said.
Montrose is not a small agency. “We’re in the Top 50, but we’re at the lower end,” McClure said. To put it in perspective, he said, Expedia’s annual marketing budget is bigger than his total annual sales.
But Montrose’s technology has certainly given it a leg up. “It’s all about how you create unique products to compete with giants,” McClure said.