It didn’t take too many late night bus rides between Orlando and Miami before Brett Reizen realized his business model wasn’t working.
It was 2001 and Reizen, who’d attended Miami Country Day School and graduated with a business degree from the University of Miami, had just launched his own company, Entertainment Benefits Group (EBG), a corporate benefits program that provided travel and entertainment deals for companies and their employees.
While the idea was good, and the service valuable, his execution — shepherding busloads of workers to Disney for daylong trips — wasn’t scalable.
“We realized how much work it was, waking up at 4 a.m. and coming back at 2 a.m.,” he said.
Then it occurred to him. What doesn’t sleep? The Internet. So he turned to the Web, where the online ticket brokerage industry was starting to explode, and crafted a new business model, using technology that would allow employees to log on to purchase their own tickets. He also established local, round-the-clock call centers to ensure customer service.
Over the years, EBG built strong relationships with Disney World, Universal Studios, Cirque du Soleil and hundreds of other zoos, parks and attractions nationwide by providing solid sales through high-profile clients like IBM and Bank of America. For example, through its TicketsAtWork.com, EBG clients might save up to $17 on a trip to Legoland or purchase a ticket to Jungle Island that normally cost $34.95 for $27.
As his corporate business grew, Reizen found it hard to ignore the dramatic changes in the online, secondary ticketing business. In 2009, Forrester Research predicted that online secondary ticket sales would reach $4.5 billion by 2012. So, in 2005 and 2006, he leveraged the relationships he’d built with attractions and began providing the same kind of deals for the general public in Orlando, New York and Las Vegas.
Sales, as he predicted, took off. Just last February, the company sold more than 13,000 tickets to Cirque’s TOTEM show in Miami, Reizen said, selling tickets for as low as $38 that normally cost about $68.
Today, the Aventura-based company has a roster of 10,000 companies representing 40 million employees nationwide, Reizen said. Annual revenues, he said, are projected to top a half billion dollars in under two years.
With its 250 employees in Aventura, Orlando and Las Vegas, Reizen said EBG helped consumers save over $18 million last year and is on track to up savings to between $25 and $30 million this year.
In college, Reizen studied business, unsure of what he wanted to do. He interned at a local Internet marketing company and became their first employee, overseeing unique email campaigns that featured live performances by groups like Blue Man Group, he said.
“So I got Interscope Records and reached out to movie studios,” he said. “Me, as a 20-year-old kid trying to make something out of nothing.”
After about a year and a half, he moved to Boston, just to try out another part of the country, and continued working for the company. But he also began thinking about starting his own business. That’s when he came up with the idea for the “closed loop program for big companies.” Companies offered insurance benefits. So why not entertainment? The plan provided not only a benefit to companies, but provided venues with a target market of employed, often family-oriented customers. It seemed like a win-win on both sides of the equation.
With what he thought was a great idea, Reizen prepared to launch. Then real life intervened. Terrorists struck the World Trade Center the day before his business officially opened.
“It was a negative time. Just crazy times,” he said. “So we tried to turn a negative into a positive.”
In the beginning, times were tough.
“The biggest challenge was money because we only had about $20,000 in a bank account,” he said. “We put a lot on credit cards.”
But persistence, and a good work ethic, paid off, he said.
After only about three years, EBG had negotiated deals throughout Florida. So Reizen decided to go nationwide and focused on two other top entertainment markets: New York and Las Vegas. At the time, his chief competitors, Groupon and Living Social, were not the powerhouses they are now. Still, Reizen says, EBG follows a different model: He considers his company a partner with venues in finding better marketing strategies and not just adding up sales.
“They’re looking to sell a product in a spot in a daily email. We’re looking to provide a strong, continuous offer. And we’re in it for the long-term, continuous relationship,” he said. “It isn’t an email blast. It’s a long-term relationship.”
The secondary ticket market has not been without its controversy. Some consumer groups see brokers as a threat, snatching up high-demand tickets and reselling them at a premium. But over the years, the relationships between attractions and brokers has become more of a partnership, with conferences like the biannual Ticket Summit providing seminars and networking opportunities for both sides to develop joint strategies.
In fact, building those relationships with brands allowed EBG to step outside the corporate world and offer the same deals to the general public, Reizen said.
In addition to TicketsAtWork.com, EBG offers BestofNewYork.com, BestofOrlando.com and BestofVegas.com and most recently, NewYork.com. In 2009, EBG acquired Travelocity On Location, that included over 30 box offices and kiosks in Las Vegas to give the company a “strong footprint” on the ground. The company has also added about 8,000 hotels to its roster, Reizen said. And just recently, it signed a deal with Ticketmaster, giving its clients better access and seating. EBG also has deals with the Miami Heat and the Dolphins.
“We’re not a travel agent,” Reizen explained. “We don’t want to book the whole package. The travel and air. We focus on the fun part.”
What sets EBG apart, he said, is not only the unique offers it negotiates, whether it’s preferred seating, parking perks or even a gift card, but its software that provides direct ticketing. By managing its own software, the company can more nimbly change up packages or tailor them to suit the venues.
“We can manage and control our own destiny,” Reizen said. “We manage the process from start to finish, whereas our competitors either don’t have a call center or outsource it.”
For the record, EBG has a stamp of approval from the Better Business Bureau. But it has also had several complaints lodged on the hugely popular RipOffReport.com.
Reizen said about 70 percent of the business remains focused on corporate clients, but he expects his public side to continue to grow, with the same kind of customer service that prompted him to take a seat on a late night bus ride from Orlando.
“We take the customer experience very seriously because if you get to the box office or you go someplace and something is wrong,” he said, “everybody’s upset.”