#9: Measuring YOUR value

Metric Type                                                      Level
     SAVINGS: Yes                                              MASTER
     SERVICE: No                                                 ADVANCED
     SAFETY: No                                                   BASIC
     SUSTAINABILITY: No

Description
So you're a travel manager. Are you worth it? What is your ROI?

What I mean is that do you, and your corporate travel management program, create more value for your company than your cost? 

If your company takes a strictly spend-and-savings approach to corporate travel management, then the numbers better add up in your favor. 

According to Business Travel News, the average travel manager made about $98,000 in total compensation in 2012. That means at the most basic level, in order to have a positive ROI, that travel manager should have created at least $98,001 in savings for the company. (Coming up short? Read the other entries in this blog to find additional ways of capturing savings that you may not be recognizing). 

But wait...to get the true picture of whether your program is worth its cost, you need to add in the total cost of program management. Here's your list:

• Internal Cost: This includes not only your salary, but the other costs to the company related to you and any other employees supporting the corporate travel program. This means your T&E costs, equipment, phone charges, space allocation, training, etc. It may be hard to get the exact cost of these items, so I would suggest asking Finance for a suitable percentage based on the total employment and total costs to the company for supporting employees ("overhead costs"). Let's just say here that this figure is 10%, meaning you must add another $9,800 to the average salary to come up with the loaded costs. Do the same for each FTE that supports the program...so if there is another person who splits his/her time between travel management and facilities for example, add half of that person's costs to your program management costs.
• TMC Cost: This should be simple to calculate. Just get a statement from the travel agency(ies) that support your program that shows how much your company paid them for services in a given time period. This typically includes transactions fees, account management fees, maybe licensing or reporting fees, services fees for RFPs or benchmarking.  Just the total amount paid to them. 
• Other Cost: If you engaged a third-party to help support your program--like consultants (a wise investment), safety/security services, audit firms, RFP assistance, data aggregators, benchmarkers, etc.--then total up how much you spent on these services.

Now you have all the components of your program management costs. I assume you also have your spending and savings totals for the same period. That's all you need.

Formula
Program Savings / (Internal Cost + TMC Cost + Other Cost) = Program Management ROI

Let's do an example with the following data points:

• Internal Cost = 1.5 employees with a total compensation of $115,000 plus a 10% overhead cost for a total Internal Cost of $126,500
• TMC Cost = 10,000 transactions at an average of $20 per transaction, plus $10,000 in account management, plus $10,000 in hotel RFP fees. Total TMC Cost = $220,000
• Other Cost = $10,000 for safety/security program, $25,000 for airline RFP help. Total TMC Cost = $35,000
• Savings = total for airline, hotel, car rental, TMC, and behavioral savings = $500,000

So, the formula is:
      $500,000 / ($126,500+$220,000+$35,000) = $1.31

This means in this example, for every $1 spent on travel management, the company saves $1.31. 
     
Usage
Okay...now you have a number...what do you do with it?

First, if the number is less than $1.00, that means that your cost is higher than the savings you are generating/capturing for the company. You need to read this blog to find other ways of capturing savings that your program may be generating. Some of these metrics are a bit challenging to calculate, but let's face it, you need all the help you can get. 

Next, if your program seems to be saving less than it costs to administer, start benchmarking with peers to see where and why your program is falling short. Maybe your airline discount levels are too low compared to what your volume can typically justify. Maybe you need to expand your hotel program. Maybe you need to look into promoting travel alternatives like videoconferencing. 

Let's say your figure is over $1.00. That means you're saving more than  you cost. Congratulations. Your next step is to benchmark this result with other peer companies to see how you stack up. This is a safe metric to compare because it doesn't reveal your actual total spend, costs, or savings. It's just a benchmark number that can be easily compared with other companies' benchmarks.

If your number is higher than others, then you can point that out internally. Maybe use it to show that you are under-staffed compared to others and that your savings supports hiring more help. 

If your number is lower than others, then see the first couple paragraphs of this section.

Caveat
Relying strictly on spend-and-savings metrics can be a dangerous game. A well-managed corporate travel program creates value that can't be easily distilled into dollars. 

A strong safety program with processes and protocols helps the travelers and the company by minimizing risk. The value is real, but difficult to quantify.

Ensuring that the level of customer service delivered by the TMC and suppliers saves travelers time and grief. I suppose you could quantify some time-savings created by eliminating the traveler need to search for the lowest fares from multiple sources, or to measure the impact on employee morale of having a TMC available to help when events necessitate a change in plans, but those are hard to calculate and some people seem them as dubious measurements. 

Tracking and mitigating environmental impact supports many companies' green initiatives, but quantifying the dollar value that a supportive travel program creates is challenging as well.

So...it's good to have a positive ROI. It's also good to make sure that everyone at your company recognizes the other values your program creates. Be proactive in managing this, or someone else might do it for you.

#7: Travel Agency Transaction Fees

Metric Type                                                      Level
     SAVINGS: Yes                                              MASTER
     SERVICE: No                                                 ADVANCED
     SAFETY: No                                                   BASIC
     SUSTAINABILITY: No

Description
When it comes to metrics, I've always embraced the "Trust But Verify" approach. Your travel agency (or travel management company or TMC) should be your trusted partner in managing your company's travel program. You pay it a fee in exchange for its assistance in reservations and service.

But let's face it, sometimes wires get crossed. Sometimes you are paying more than your agreement outlines, but because no one is paying close enough attention, you never find this out. I'm not saying a TMC would do this purposefully (and hope to remain in business), but I have found that doing a quick and easy measurement of fees is worth your time and effort. 

This metric works if you are paying your TMC a transaction fee for each reservation. You simply measure the number of charges you receive compared against a benchmark like airline tickets issued. We know that the number of TMC fees should exceed the number of airline tickets issued because of changes and refunds, and the like. It's the change in the ratio between TMC fees and Airline Tickets that is the key here.


Formula
Total Number of Transaction Fees Charged / Total Number of Airline Tickets = Travel Agency Fee Ratio

For example, one of my clients began its partnership with a TMC with a ratio of 120 transaction fees for every 100 airline tickets issued (a ratio of 1.20). This metric slowly increased over the span of two years to 151 transaction fees for every 100 tickets (1.51). 


Usage
As you can imagine, this metric sent off some warning bells once we started measuring it. The funny thing is that we never would have noticed it in the normal course of business, but we were looking for the total we paid the TMC for a year and simply applied historical measurements to it. 

Turns out that both the TMC and the company were "at fault." The TMC was double-counting certain online transactions that were 'touched' by an agent (instead of simply reverting to a 'touched' fee, the TMC was charging both the initial fee and a touched fee). Because the company was pushing online adoption hard, but hadn't given enough training to the travelers on what information was required for billing, a larger number of transactions were transitioning from no-touch to touched.  The agency corrected its transaction billing, and the company increased training to streamline the booking process.

# 4 Stakeholder Satisfaction

Metric Type                                                      Level
     SAVINGS: No                                                  MASTER
     SERVICE: Yes                                               ADVANCED
     SAFETY: No                                                    BASIC
     SUSTAINABILITY: No

Description
Simply put, corporate travel is in the customer-service business. If people do not like the service, they will push back, sandbag, complain, and work against the other goals of the program. It won't matter how much your program is saving if all senior management hears are complaints and criticism of the program. Employing and maintaining a structured set of satisfaction metrics enables you to a) get ahead of service issues before they blow up, b) communicate real results company-wide that minimize the impact of one-off anecdotes about horrible service, and c) show value to the company beyond simple spend-and-savings statistics.

To get started, all you need to do this are three questions and a survey tool (many online options to choose from). 

1. How well does the company's travel program suits your needs as a business traveler and/or arranger of business travel? Rate your satisfaction on a scale of 1 (Not At All) to 100 (Perfectly).
2. What do you think the travel program does particularly well? [Comment Box]
3. What do you think the travel program could do better? [Comment Box]

Why These Three Questions
The first question provides you with a benchmark score to compare over time. The following two questions are where you find out what people really think about the program. Simply read all the comments, categorize them based on what the comments relate to (e.g. the agency, the online tool, airline, etc.), and you have all the information you need to improve the perception of the program. 


After That
Asking questions is the easy part. However, it is critical that once the survey is complete that you quickly perform the following tasks. 

• Address any comments that require immediate attention (whether because of the timeliness of the complaint or the importance of the respondent). 
• Next, review the results and the comments with the agency, the front-line agents, concerned travel suppliers, and other relevant parties. 
• Draft action plans to address any significant and/or frequently cited concerns.
• Publish a summary of the responses. Highlight the overall satisfaction score, note some of the positive comments received, and share a high-level summary of the action plan to address some of the common complaints or opportunities for improvement. This summary should be published no later than 1 month after the end of the survey period. 

It's been said that one of the best ways to demoralize a group of people is to hang out a suggestion box and to ignore it. Think of the surveys as a periodic suggestion box. Once people see you are listening to them, engagement and satisfaction increases. 


Whose Satisfaction Are We Measuring?
Certainly the travelers and travel arrangers. You should do this at least twice a year, and as frequently as once a quarter if you can. You can get a list of who traveled and/or who booked trips during the time period since your last survey. 

Department/line managers who have significant numbers of travelers should be surveyed twice a year. For them, modify the first question to "How well does the company's travel program support your department/line of business?" or something similar to change the focus from the individual to the department. The other two questions stay the same.

Senior/executive management should be surveyed once a year. Again, simply adjust the first question to focus more on the company overall rather than an individual or a department. 

Suppliers with whom you have contracts and/or a lot of business should be surveyed at least once a year. For them, the focus is on how your company is perceived as a client and the ways in which you can improve your relationship to better serve both entities. 


What about Other Questions
When designing surveys, people tend to get question-happy--piling on question after question to try to learn everything about everything--seemingly afraid that they'll never get another chance to ask a question.

You can certainly add a couple of questions to the Basic Three. Here  are a couple you might consider:

• For the traveler/arranger survey, ask whether they felt they were quoted the lowest logical fare when making reservations (whether or not they took it). There is a strong correlation between low fare perception and overall satisfaction. Sometimes it's real, but sometimes the respondent doesn't take into account how the firm's travel policy affects what fares are offered.
• Consider having your agents add this to their script: "The lowest fare, based on the company's travel policy, is $650. However, there are fares between these two cities that can run as low as $250, but you would need to be flexible with your times or dates. Do you want me to investigate those for you?"  A few will actually work with the agent to look for a lower fare, but the majority will simply gain a better perception of the low fare performance of the agency--in turn improving overall satisfaction rates. 
• You may also wish to differentiate between satisfaction with the live travel agents and the online booking tool (if you employ one). The variance between these two modes of reservation can be stark. 

What you want to avoid when adding questions are those whose answers do not inform actions. For example, I've run across surveys that ask "Do you find the agents friendly, knowledgeable, and professional?" The results show that 67% of respondents do. What next? Does this mean that the agents are friendly and professional but not knowledgeable? Or some other combination? Do one-third of the respondents simply not like the agents? You can't tell from the way the question was phrased. This is the inverse of the old maxim which in case says:  If you can't manage it, do not bother measuring it.

Usage
The first question is used to evaluate, over time, changes in the perception of the travel program from a range of stakeholders. The others are used to inform your short-term action plans to improve and/or enhance certain aspects of the program based on respondents' feedback. 

This type of metric is easily understood by non-travel professionals.