All posts by Scott Gillespie

Why TMCs Need a Dramatically Different Sales Approach

Ever notice how Travel Management Companies (TMCs) have a hard time selling their value?

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This article was first published on WordPress.

It’s not a complicated value proposition.  “We’ll help you book travel at low prices and help your travellers on the road, so you’ll save money and sleep better.”

That’s a pretty easy benefit statement to grasp, right?  So that’s not really the problem.

Two Big Problems

TMCs compete on the wrong metric, and they sell to the wrong people.

First, the metric they compete on is price, namely the transaction fee.  Price may be the metric of choice for the procurement crowd, but it is the worst metric for those TMCs who add real value.

On to the second problem. TMCs sell to travel managers and procurement managers.  Is it traditional? Safe? Expected? Sure, but still wrong – in this way:

Travel managers are very important stakeholders, and they need to have a clear understanding of how one TMC differs from another. Same goes for the procurement managers – these folks are charged with negotiating contracts that deliver real value to their organisation.

And yes, it’s hard to imagine how a TMC could win much business by ignoring either of these VIP stakeholders. So it’s not about ignoring or minimising these key parties.

Find the VVIPs

Instead, it’s all about selling to the VVIP stakeholders – the men and women who manage big travel budgets – the folks who are fully accountable for making the tough decisions about whether or not to trade down to a harsher travel policy, knowing they’ll lose good people by doing so.

These are the people TMCs need to sell to – the guys and gals who own the travel budgets.  It’s their necks on the line for making good decisions about sending Sally to Sydney in Coach or in Business. They wrestle with the tradeoffs of higher airfares and hotel bills in return for more loyal road warriors.

Which brings us back to the first problem.  Instead of price, TMCs must sell the value of their expertise.  But not in the current/classic/me-too way that passes today’s RFP 101 test.

Sell the Bigger Picture

Instead, TMCs must sell their ability to deliver broader business value.  Value that goes way beyond that measured by traditional travel metrics.

TMCs must learn to sell the kind of business value that P&L owners care about.  Hint – it’s not about your best in class online adoption rate.

TMC execs, you gotta think and then sell in terms of travel impact on metrics that P&L owners care about.  Of course they worry about their travel budgets.  So showing how to conserve them is necessary – but it’s not sufficient.

Focus on the Total Cost of Travel

The other part of the equation is that of the impact of travel on road warriors.  All that wear and tear has a cost – a real, quantifiable and significant cost.

So it’s simple – TMCs need to show travel budget owners how good their TMC is at helping them to minimise the total cost of travel.  Not just the supplier costs, but also the real, quantifiable and significant costs of traveler wear and tear.

Getting a company to minimise the combination of these two costs is true travel program optimisation.  Any other claim about “We’ll optimise your travel program!” is typical TMC marketing hooey.

The Better Approach

Let’s make this easy.  If you’re a TMC sales exec, and you have a prospective account in mind, find out who manages the biggest number of their road warriors.  Say it’s Joe, their EVP of Sales. Here we go:

You get into Joe’s business.  “So, Joe, which of these issues regarding your road warriors are you having any trouble:  Retention? Recruiting? Productivity? Health? Safety?”

The beauty is there is no dead-end answer.  If Joe calls out one of these issues, off you go down the trail of explaining the options for improving that part of the traveler’s experience.

If Joe says “Nope, we’re good on all that”, then you’ve got license to ask about old-school ways of controlling travel costs, and hopefully bring up a few new-school ways to keep things fresh.

The point is you, the TMC sales exec., get to – need to –  have a much more relevant discussion about how travel is impacting the guy’s business.

This is a much better way of framing the value of a TMC. You’ll be talking to, and quietly selling, to the real decision makers, and I’ll bet dollars to donuts that they never ask about your price…at least not in that initial conversation.

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Scott Gillespie is the Co-Founder and Managing Partner at tClara, helping travel and procurement managers build more valuable travel programs, as well as the author of Gillespie’s Guide to Travel+Procurement.

A Better Way to Manage Road Warriors, and Their Costs

You road warriors are a hardy bunch, aren’t you?

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This article was originally published on WordPress.

You spend over a hundred hours a year on planes, take trips on short notice, cross too many time zones, lose sleep, gain weight, get up way early and come home late, and give up more than your share of weekends.

All while being squeezed by travel policies that leave you shaking your head, wondering if the people who approved these policies really, truly understand how hard it is to be a heavy-duty road warrior.

The Travel Friction Concept

Let’s call all this wear and tear you’re taking on “travel friction“.  You get it, right?  The more trips you take, the tougher those trips are, the more you get burned out by being on the road.

Fun fact: Real road warriors, those in the top 10 per cent of all travelers, absorb close to 50 per cent of all travel friction in the average firm.    So you really are in a separate class when it comes to work-life balance challenges, and not surprisingly, for higher risk of quitting your job.

It’s this risk of attrition, of getting burned out on travel and quitting the road, that is the key to a better way of managing all you road warriors.

Old-School Procurement Is The Problem

Procurement folks must address the travel category.  The spend is too big, and the purchase practices too important, for them to ignore.

The old-fashioned way of procuring travel has been – and sadly, still is – to focus intensely on the travel supplier’s costs.  Hammer that airfare down, demand a lower hotel rate, haggle over a buck or two a day for the rental car.

At the same time, procurement knows that travelers need to abide by travel policies that further reduce travel supplier costs.  Things like taking extra connections, flying 12 hours in coach, or staying at inconvenient 3-star hotels…all the things that you road warriors really hate.

Procurement has been doing it this way for twenty years. Call this the “transaction cost” model of managing travel.

New-School Procurement Is the Solution

All we have to do is get procurement to look at the total cost of travel, not just the supplier’s portion.  Specifically, the cost of travel friction.

These travel friction costs come in a few forms: lost productivity, higher health costs, more safety incidents, and the killer – higher turnover.

The good news is that these travel friction costs can all be quantified.  The better news is that procurement folks already get the “total cost” concept.  They use it all the time in other cost categories.  Think computers or cars, and their total cost of ownership.

More Than Just Tiered Travel Policies

Many companies give their frequent travelers a more traveler-friendly policy.  Maybe you get business class on long haul flights and an airport lounge membership. Woo-hoo.

There are many other ways for your firm to reduce the amount of travel friction you take on.  Consider these options:

  • Recognition.  Wouldn’t a simple thank you from a senior exec go a long way to taking the sting out of that last month of road warrior hell you went through?
  • Less Travel.  What if your firm had a travel friction warning light that started to flash when you’ve reached a certain level of travel? Or a proactive way to share your travel duties with a colleague?
  • Better Trips – Safer, Healthier, Easier.  What does “better” mean to you?  Shouldn’t your firm at least know your particular preferences?
  • Better Travel Culture.  You’re a road warrior, not a Navy Seal. Maybe your firm needs to promote a more traveler-tolerant culture.  Some companies do this by discouraging need-to-travel meetings on Mondays and Fridays.
  • Travel Counseling.  A few of you are very likely addicted to traveling.  You and your firm should recognize this, and put some practical options on the table.

Road warriors are a very valuable segment of any firm’s workforce. It’s well worth reducing the friction in this important part of the business machine.

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Scott Gillespie is the Co-Founder and Managing Partner at tClara, helping travel and procurement managers build more valuable travel programs, as well as the author of Gillespie’s Guide to Travel+Procurement.