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How’s Your Managed Travel Program Doing?

A four-part plan for defining — and measuring — success.

It appears to be a straightforward question: Is our travel program better or worse than last year? How do you present the progress of your travel program to interested stakeholders? The question lends itself to evaluating components such as airline and hotel usage, but how does one address this from an overall perspective?

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More importantly, how do we define required results objectively? Sure, supplier data can show snapshots of value at a point in time, but how does one crack the larger progress question? Consider this four-step approach, presented in strategic order.

Define Success

How do you know if you “win”? What is your standard for declaring victory? Buyers should begin with the end in mind. While it is useful (and usually required) to be familiar with each component metric, successful programs have focused on a few key areas, with two tenets. Firstly, key measures are defined and are generally selected due to their high rates of value returned. Secondly, key measures are living — once they are achieved, institute new ones.

It’s easy to try to do too much at this point. Defining success with 12 sub-points under the general topic of policy compliance does not yield the same efficient results as a more streamlined, single, top-level definition of success.

It’s a little like the story about the Oakland police spending two hours trying to subdue a gunman who had barricaded himself inside his home. After firing 10 tear-gas canisters, officers discovered that the man was standing beside them in the police line, shouting, “Please come out and give yourself up.” Focus on the components that matter, define them clearly, know when you’ve got enough to accomplish your goal — and move on.

Develop Metrics

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Once the goal is in view, develop the matching metrics. For example, if the goal is improving hotel booking compliance, focus on the hotel booking metrics. Is placing 95% of hotel bookings via your designated travel management company appropriate? Would 50% be a success? Perhaps bookings should be made based on a specific ratio of what trip nights are eligible? Or should they all be reserved at preferred properties? What is the definition of a hotel booking, an eligible trip night, or a preferred property?

Carefully developed metrics that align exactly with precise definitions of success can bring clarity to the process. Less is more. Like Albert Einstein said, “Not everything that can be counted counts, and not everything that counts can be counted.”

Design Standards

Almost all travel suppliers make customer and performance data available to their buyers. How many times does the data from one match the data from the other? (For fun, just check your airline spend from your travel management company versus from your contracted carrier — and, yes, we know it’s often flown versus ticketed, but a 30% difference?)

Standardized design for the program has the following benefits:

  • Allows you to compare information from period to period as well as between different suppliers
  • Forces suppliers to make reports based on your key criteria, rather than supplier criteria
  • Maximizes the value of supplier reviews because you can focus on improvement opportunities rather than formats
  • Improves the efficiency of reviews because employees can quickly identify trends
  • Creates common platforms for valuing your program as a whole across suppliers and countries

Once metrics are clearly defined, share them with your key suppliers. You may need to invest some time up front to be certain that all parties understand the overriding goals, definitions, terms, metric calculations, and presentation formatting. This step affords commonality across disparate sources — the key underpinning of accurate metrics.

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Review the Details

Now you are ready to enjoy the spoils of the hard work. The program can now be holistically measured. Success has been defined, so we know instantly if there is still work to be done, or if another measure should be instituted. If the goal was 90% online booking efficiency and it is achieved, the goal is met — congratulations! One caveat: Be sure to compare the cost and benefit of further stretching such a goal — will 95% yield enough value to justify the resources required?

Multinational Usage

But how does the preceding approach help me if I have many countries in my travel management portfolio? Perfectly. Here’s why.

Following the same steps will yield the same results, regardless of whether you apply them to a single country or more than one. The question is whether you will identify the exact same definitions of success, metrics, and standards for each country. Online booking measurements are common in the United States but don’t necessarily apply to Nigeria.

Our clients utilize both approaches with success. Those that have included the same criteria for all countries can quickly point out program holes, many times due to lack of market readiness. Noting those program holes can keep key travel management goals on the agenda as holes are reviewed each quarter. Conversely, other clients have set goals at a country level, removing any “unachievable goals” (think electronic ticketing in Russia). Those clients note that they can measure the areas that they can influence yielding a truer picture of the travel management progress.

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These approaches can also be summarized by region, enabling stakeholders to contrast and compare program movement geographically. Our clients garner strong senior management support when presented with this type of overview.

Final Thoughts

Showing the progress of a travel management program has always been problematic. Suppliers and buyers can use different terms and definitions, as well as measurement criteria, and calculations. This is further complicated by companies’ reporting requirements.

Following the above outline can get you closer to the target while providing tangible measurements of progress by country, region, and component. Stakeholders will now be able to quickly grasp the results. This focused progress reporting eases their ability to offer support as needed.

Remember: Those who don’t know where they are going are sure to end up there.

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