Evolution vs. Revolution

If you’re looking to change TMCs, be sure to weigh the costs and explore all the options.

A strong relationship with the corporate travel management company is essential to the success of most travel programs. But like all relationships, it must be re-examined from time to time to ensure that it is working to its fullest potential.

If it’s not, a travel program may choose to stick with the incumbent with an eye toward growing and evolving the relationship. Or the company may opt for a revolutionary change in its TMC relationship. A savvy TMC understands that change isn’t always just about fixing something that is broken, but is about driving measurable results for the organization.

In recent years, the TMC-customer relationship has changed substantially, moving beyond simply sending and receiving travel and spend information. Today, clients are outsourcing different needs to TMCs such as sourcing contracts, optimizing spend and developing strategic meetings management. Today companies are allowing TMCs to manage their travel, expense and meeting programs in a more strategic manner compared to years past.

The relationship works best when the TMC serves as an extension of the corporate travel department, says Bill La Peer, senior vice president of sales-Americas for BCD Travel. “The travel program must serve the company’s overarching goals, and the TMC should serve as a trusted advisor that helps accomplish those goals,” he says. “The ideal relationship begins with establishing what success looks like.”

Often, when policy compliance begins to weaken or new technologies emerge, travel management leaders look to their TMC or to alternative providers to better satisfy their company’s evolving needs. “This evaluation process can stem from dissatisfaction or simply the evolution of an organization’s internal needs,” according to Lane Dubin, vice president, general manager and head of global sales for American Express Global Business Travel. “When needs begin to change, it’s important for a company to initiate a conversation with its TMC sooner rather than later to express this to give it the opportunity to enhance their offerings as the client’s needs evolve.”

Clarity of purpose is key. Each party needs to have a mutually shared grasp of the client’s objectives, so that the TMC understands what those objectives are, notes Greg Treasure, president of HRG North America.

“A lot of that revolves around having a robust business plan with very clear, definable accountabilities behind it,” he says. “Trust and openness is also important.

Sometimes when you get into a supplier-customer relationship, and you don’t have that, it makes it difficult to challenge each other in a constructive way.”

The most productive relationships start with full transparency regarding program performance goals and are driven by a shared sense of urgency to achieve these goals, says Barbara Barnard, senior vice president of US corporate for Carlson Wagonlit Travel Americas.

In other words, success and how we measure it needs to be defined at the onset of the relationships and both the TMC and the client need to have mutual responsibilities to achieve that success,” she says. “Just as importantly, there needs to be a healthy tension created by two business partners that are constantly challenging the status quo, to ensure that the program is being tested and does not become stagnant. Because, at the end of the day, a program that isn’t performing is a program at risk.”

New and evolving technologies has made it easier, faster and less costly to serve clients, but that doesn’t mean a TMC should leave out the element of the human touch. Tom Cates, executive vice president strategic business development for Balboa Travel, says it’s critically important to make the client feel their needs are understood and that the partnership brings mutual benefits.

“We aim to make the client happy with the highest level of service and safety possible – this often means being as nimble as possible,” he says. “For example, when the FDA approves a drug, our life sciences clients need to ramp up quickly and efficiently. We meet the exact specifications or wishes of our clients so they can conduct business as usual.”

Making a Choice

When companies look for TMCs, they seek out expertise, experience and a strategic advantage. “Clients expect full conviction and for us to be obligated to act on behalf of them,” Cates says. “They expect us to believe in their success.”

In determining which TMC is right for a company’s program, corporate travel managers should begin with a well-structured Request for Proposal (RFP), so that the evaluation of each prospective TMCs’
service offerings is subject to a comprehensive and uniform review. Additionally, companies should have multiple conversations with various leaders within the TMC to better understand its offerings, capabilities, differentiated servicing processes and their relationship management philosophy.

“Companies want to ensure they receive the greatest ROI, and in order to do so, they must take time to communicate their needs to the TMC,” Dubin says. “If a client feels the service value is not in line with the expectations or investments they are making, they must be able to candidly discuss this and give TMCs the opportunity to deliver greater value.”

The best relationship is one where both the TMC and the client take on the mutual role of being true business partners, notes Michael Steiner, executive vice president for Ovation Corporate Travel. Each should have the willingness to make and receive suggestions on how to improve the client’s travel program.

“Our clients have varying reasons for their selection of a TMC,” he says. “Those reasons range from three major categories: Service, Savings and Technology. Specifically looking for improved service levels, overall cost reduction including access to deeper negotiated air, car and hotel discounts, introducing duty of care/risk management tools, implementing an online booking tool or increasing online adoption, improved technology overall including mobile solutions.”

The Changing Relationship

Now more than ever, corporate travel managers have their plates full. They’re being tasked with doing more with less, so they look to their TMC to do more for them. This is evident in the expanded role some travel management company account managers are called upon to deliver these days.

As an example, La Peer says it’s not unusual to find TMC account managers helping corporate travel managers craft presentations on the travel program for the client’s executives. “And those presentations now go well beyond tracking online adoption rates,” he says. “They drill down into things like duty of care and traveler mobile interaction.”

Today, travel buyers are being given responsibilities over multiple spend categories; travel professionals are being tasked with new areas; and non-travel professionals are now involved in managing this complex space.

“As a result, buyers don’t always have time to delve into the operational complexities of travel management. Rather, travel programs need to be results-oriented with clearly defined metrics for measuring performance,” Barnard says. “It goes back to the foundation of an ideal TMC-client relationship. The most productive programs will have a clear definition of success and metrics upon which performance can be measured.”

The biggest change to the relationship between client and TMC, Steiner says, is the introduction of technologies, including enhancements to online booking tools, mobile applications, and more.

Treasure says that a decade ago there was more flexibility but a lot of clients are looking for consolidation and seeking a provider that can truly provide global services in the markets a client needs a TMC to be.

Making Your Move 

As the marketplace continues to shift frequently with new technologies, service configurations and global expansion leading the way, companies want to partner with a TMC that has offerings that meet the needs of this constantly evolving space.

“Companies look to TMCs to gain a deeper understanding of how much their company is spending on travel, including air, hotel and ground transportation,” Dubin says. “The data and insights pulled from the GDS, payments and expense data and through other quantitative and qualitative sources enables companies to properly assess their travel spend and determine if their investments are delivering higher returns while also aligning with company goals.” James Filsinger, CEO of Yapta in Seattle, WA, currently works with some of the largest TMCs in the world and has had to make changes over the years.

“You know it’s time to start looking for a change when your TMC continues to offer you only home-grown solutions, and doesn’t look to embrace innovative technologies that are flourishing outside its own four walls,” he says. “Top performing, service oriented TMCs are those that are able bring together a variety of industry-leading technologies for their clients,regardless of whether it was developed in house or not.”

For some companies, the change of a TMC may be due to not believing they are receiving the levels of service they expect (e.g., thorough understanding of the company’s goals, valuable data and insights into corporate travel spend, dedicated team of travel professionals offering superior services and expertise). Other times, a company’s goals may change internally, thus requiring them to switch TMCs as their program needs change.

“As companies expand their programs globally across multiple regions, a decision to change their TMC may be a result of the TMC’s lack of global capabilities and reach,” Dubin says. “Companies looking to expand need a TMC partner that can offer products and services to all of their employees in any location and ensure a seamless end-to-end experience. This enables the company itself to focus on its core business rather than managing business travel.”

“Exceptional traveler service is table stakes in a TMC relationship. If the service isn’t there, a client is likely looking at a change,” according to Barnard. “Program performance is equally as important, every client defines it differently, and what ‘top performance’ looks like can change for a client year over year based on their business objectives. In general, when we see buyers looking for a change, it is because the TMC relationship has become stagnant and there is no longer a clear definition of or drive to achieve program performance.”

Ultimately, a loss of trust and confidence in the incumbent is the reason behind most changes. “Dissatisfaction often begins with internal noise – travelers complaining that they’re not being serviced properly, particularly at the executive level. Also, concerns that an incumbent TMC is not keeping up with functionalities found elsewhere in the marketplace,” La Peer says. “For example, they may want their TMC to offer a mobile app for trip planning. Or they may want a more robust and flexible reporting tool.”

Cause and Effect

Still, the benefits of changing TMCs must outweigh the costs. Evaluate the underlying motives for making the move. If the incumbent TMC can solve key problems or demonstrate it can help a travel program reach the next level, and develop proof points showing how they can do that, the work involved in staying with the existing relationship may be far less than the pain and cost of a change.

On the other hand, if the incumbent shows it can’t meet the current and future needs of the travel program, it may be time for a move.

Changing from one provider to another may require a significant amount of time and effort; however, with a sophisticated implementation team and the right tools, these changes can occur relatively seamlessly.

“If electing to make a change, companies must ensure their contracts are finalized, the necessary technology is implemented correctly and their travelers receive the right communications in order to know how to book travel and manage trips that may already have been booked,” Dubin says. “Furthermore, the long-term benefits of changing TMCs can be significant

if the company changes to a provider that is highly differentiated and offers greater service capabilities.” If you do decide to make a change, be sure to do the groundwork needed to make that change successful, La Peer warns. Otherwise, you could waste a lot of time and effort. Changes should result in improvement of the program, he adds. The best TMCs are experienced in change management and can assist companies in developing strategies to mitigate any disruption during the transition from the old to the new.

Finally it pays to remember, relationships are not scientific, Cates says. They are deliberately grown over time. “Trust is critical. So it’s paid for us abundantly to have flexibility and patience when accommodating our clients,” he says. “They depend on us for that.”

Keith Loria

Keith is a freelance writer contributing to entertainment, business, real estate, sports and trade publications.

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