A click ahead of the competition

Michal Drozd & Radek Stavinoha

Three years ago, a few students with minimal experience founded their own firm. Today, Invia.cz has soared past its competitors to a position as this country’s leading on-line travel agency.

THE BUSINESS IS, in fact, nothing more than selling the excursions of other travel agencies on commission. So what makes it so special? For one thing, it can sell a great many excursions organized by other firms. And it doesn’t need any brick-and-mortar establishments, just a huge offer of vacations on a well-arranged internet site that can address the masses.
Invia.cz began doing business in the beginning of 2002 as Mojedovolena.cz. The principle of an on-line travel agency was clear, but its initial success was hindered by its poorly implemented web presentation. “It was a turnkey presentation, and it was absolutely nonfunctional, so I played with it for a few months to get it working,” says Michal Drozd, who originally came to the firm as a programmer, and later became a co-owner. Of course a high-quality website was nearly useless without a high-quality offer of excursions from renowned travel agencies. “Some agencies were very skeptical at first, especially the big ones,” recalls Drozd. “We had to convince them to let us sell their product – and we faced a lot of resistance because they wanted to know if we had a storefront on a main street or how far we were from the nearest competing agency, which is really tough to describe on the internet,” he adds.
In the end, however, the founders made their case, and today Invia.cz’s offer includes a large majority of the leading travel agencies on the Czech market. “We have the largest offer. If you visit our site and want an excursion you can be nearly certain to find it, so it doesn’t make sense to go anywhere else, because we sell excursions for the same prices as the specific agencies sell them for,” explains Invia.cz co-founder Radek Stavinoha. Besides travel, Stavinoha is also involved in the education business – several years ago, as a student, he and his friends opened the Tutor agency, which has also become very successful.

Benchmark
- Large offer of excursions on one website
– Advertising focused solely on internet users
– Bold approach stressing rapid expansion
– Performance-based system for employee remuneration

Advantageous partnership
The strategy of offering many excursions on one website quickly began paying off for the firm. The first year they sold trips worth CZK 13 million, and a year later that figure soared to 60 million, vaulting the agency to third place among domestic on-line travel agencies. At that time, the Swiss firm Centralway Holding AG took note, soon injecting additional capital into the firm and pointing its partners in a new direction. “Before their arrival we were a tiny firm of ten people. But they said we could be the market leader, not only in this country but in central Europe, which we really wanted. And we succeeded,” notes Drozd, adding that the joint business arrangement in no way restricts the original owners. “Practically all the management is still in our hands. They gave us some tips and ideas, but otherwise it’s up to us. We have lots of freedom,” Stavinoha points out. “At the same time, Centralway pushes us to focus on things – such as internal processes – that we wouldn’t otherwise see as important,” he adds.
Thanks in part to this successful collaboration, last year the firm’s sales rose to CZK 320 million, and are expected to double this year. Last year the firm invested CZK 5 million in the construction of a modern call center in Brno with 80 operators. “For us, Brno is the platform for expanding to other countries. It’s close to Austria, Hungary, Poland, and, of course, Slovakia,” says Stavinoha, summarizing the reasons why, besides lower operating costs, the firm decided to build a branch in southern Moravia.
During the season Invia.cz has about 200 employees in all, of which a large part work in the call center. “All of our business relies on the quality of the operators, so we intensively stress their motivation. Their base pay is relatively low, but they receive very high commissions,” says Stavinoha. Besides their wages, the employees’ greatest bonus is the chance to travel around the world for next to nothing. Top employees have trips allocated to Brazil or Mauritius, for example. They can also take language or management courses offered by the allied Tutor agency.

Factors of success
According to Stavinoha, Invia.cz’s success – as measured in its hundreds of millions in sales – are due mainly to both partners’ unorthodox approach to business. They each started at the firm as students with relatively modest needs for living, and they didn’t live off the business at first. “The first two years we worked for nothing, or just for food. But we tried to have good people whom we paid well while paying ourselves only a little,” recalls Stavinoha. Neither he nor his partner have their own cars, houses, or apartments yet, although given the firm’s profitability that wouldn’t seem to pose any problem. “All the money the firm has generated has gone back into it,” Stavinoha notes. “That may be one of the reasons we’ve been successful. Most entrepreneurs spend their early revenue on expensive cars or vacations, and when their financing runs out they go out of business,” he opines.
But he sees a basic factor in Invia.cz’s success elsewhere. “It lies in courage and aim. Most entrepreneurs can’t say to themselves, ‘I want to be the biggest and the best and I want it now.’ They prefer caution. But for us it’s no problem to say that we want to double our sales in a year,” explains Stavinoha. To this Drozd adds, “intuition as an approach frightens many managers, they find it unacceptable. They need processes and plans for everything. That makes it easy for them to control everything, but it takes time during which all their competitors get a jump on them. Processes can always be corrected, but processes can’t save your market position.”
Using this element of strategy, Invia.cz’s owners want to approach the one billion crown milestone next year. But they aren’t planning on increasing their work force. “The firm is now growing technologically, but not in terms of number of employees. These 200 people we had in the summer represent a ceiling that we don’t want to exceed,” Stavinoha says. However, he does feel that Invia.cz should soon reach out across the borders of the Czech Republic and Slovakia. “As we expanded to Slovakia, we’ll probably expand to other countries as well, in order to become number one in all of central Europe,” he affirms.

Visitors keep on coming

According to the firm’s research, Invia.cz’s best promotion is the word-of-mouth dissemination of its good name among satisfied customers. “It’s about the strength of the brand, based on about 97% of our clients recommending us to their friends,” co-owner Michal Drozd says. “That’s what constantly expands the base of people who know Invia.cz.” The firm addresses another client segment through direct advertising. It promotes its offered excursions almost solely on the internet. Invia.cz is one of the largest orderers of on-line advertising on the Czech market, allocating 95% of its promotional budget to internet advertising. “We prefer addressing people who already use the net. Then we just have to attract them to our site,” notes Drozd.
Marketing success also depends on the prominence of the firm’s name when browsers use search engines. “The problem is that search engines are constantly changing their algorithms for arranging sites,” co-owner Radek Stavinoha explains. “We can’t watch them constantly, it’s not possible to build long-term success on that. By contrast, on-line advertising means clear visitorship, so that’s what we prefer,” he adds. The logic of his ideas is borne out by the number of visitors Invia.cz gets every day. “We get the most hits in the summer, about 20,000 daily. During the year it averages 10,000. In August we were among the twenty most visited Czech websites,” Stavinoha says proudly.

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