Savings, for sure, maybe followed by discounts and policy compliance, or average ticket price/room/car rate. These are time-tested, industry-accepted, common-sense metrics that are the foundation for status-quo management of the travel category.
(Going to GBTA’s Convention? See a related meet-up note at the end of this post)
Before you reject my call to demote these traditional metrics, consider the maxim “Measure what matters”. Note that it isn’t “Measure what’s laying around, looking like it matters”. It’s not “Measure what we’ve always measured”.
It’s the “what matters” part that’s the key. That, and an evolved view of travel management’s mission.
Shouldn’t the goal of managing travel be to create the most value from whatever the travel budget is? To create the biggest business impact, net of the cost? Sure…which means we need to think about measuring said impact.
But not in an egg-headed, PhD, ROI kind of way…nobody knows how to do that. Let’s keep it simple, practical, doable.
Which means thinking about the measurable impacts we want from a travel program. And no, we’re not talking about online adoption rates or lowest-logical fare compliance rates…those don’t meet the bigger-picture criteria of having measurable Business Impact.
Let’s start with the travelers. Surely they are the most important part of any travel program. Road warriors are the most important group among all your travelers. They account for most of your program’s transient spend. They are well-paid to build relationships or bring their expertise to where these things are needed. You don’t want to lose them, especially to the competition.
So whatever Business Impact thingies we measure, we need to put road warrior-related metrics in the center. Now we’re getting somewhere.
Assume for the moment we end up wanting to measure business impacts of a travel program on these dimensions (RW stands for road warrior):
- RW recruiting and retention, e.g., time to fill open jobs, attrition rate, etc.
- RW productivity, measured in sales, billable hours, etc.
- RW willingness to travel over the next few months and years
- RW’s trip scrap rate – the share of trips rated as not worthwhile (btw, the average is 12%)
- and yes, of course, a clear measure of procurement’s value-add.
Notice that each of these dimensions is directionally obvious. You know if you want more, or less, because you can tell if having more helps the business, or hurts it.
Here’s the bright, shiny point – none of our traditional travel KPIs measure any of these business impact dimensions. We’re not measuring what really matters. Surprised? I was.
Test this by asking “How does knowing my program’s average discount (or savings, or compliance rate) tell me anything about how well our program is doing along any of these important dimensions?”
They don’t. They can’t. That’s not what they are meant to measure.
Agreed, there is no harm, and a bit of good to be had from measuring traditional travel metrics…but please don’t believe that those typical metrics are any good for measuring the core business impact of a travel program.
We need new metrics and a new framework. I’ll expand on this in my session “Advanced Airline Sourcing For Strategic Impact”. It’s Tuesday, July 19th at 11:30 am at the GBTA Convention in Denver.
For those of you going to GBTA, you’re welcome to meet for drinks and apps with Kimberly Meyer (Meetings Analytics), me and other like-minded travel industry folks who dig data served with truth and clarity :> We’ll be at the Embassy Suites across from the Convention Center Monday from 6-ish to 7-ish pm.
Hope to see you in Denver. If you’d like a copy of my presentation, just leave a note below.