Webinar: Building the Case for Better Travel

Wow.  This article that challenges the importance of savings is one of the most popular ones I’ve ever written.

Still, the question is can you really afford to focus on the benefits of travel, rather than on the cost?

The good folks at Prime Services and I will show how build a business case for better travel using my Travel Policy Impact model. We’ll walk through the data you need and the assumptions you have to make, and show the ROI as we go.

You’ll see how easy it is to estimate the costs, and how to make reasonable assumptions about the benefits.  Travel Policy Impact 101, here we come!

The webinar starts at 1:30 pm EDT on Thursday, March 15th.  You can register for your free seat here. I hope you’ll join us.

Prime Services is a division of Prime Numbers Technology.  Kate Saab and Robin Carter will co-host this session with me. You can download the Travel Policy Impact model and the User’s Guide from within this post.

Making the Business Case for Better Travel

The most common question I get after speaking about the benefits of reducing traveler friction is “OK, we get the idea, but how are we supposed to sell this to senior management?”

Here’s the answer:

The whole idea is to balance the costs and the benefits of better business travel, right?  So that means we need a way to quantify those things, in a way that makes sense to senior management.

The good news is that there is now enough research out there to help us frame the question with some clear logic and pretty good assumptions.

Gillespie’s Travel Policy Impact Model

I’ve developed a simple – and free – approach that any travel buyer can put to work right away. It’s an Excel model (see below) that asks you to fill in 16 things.  Do that, and you’ll see the results. Your results could look like this:

“If we spend an extra $35K per road warrior to give them better quality, lower-friction trips, we’ll get back a net gain of $90K each, for an ROI of about 260%”

Credibility Is Key

Travel managers,  you’ll be able to plug 10 of the 16 data things into the Cost section pretty much off the top of your heads.  You’ll probably need help with the 6 things in the Benefits section.

A Brighter Way to Measure Travel’s Impact

For the amount of money firms spend on travel, surely they’d like to know the impact. There is an incredibly practical – and pretty easy –  way to answer this question.

Forget about ROI – it’s too theoretical.  Skip Big Data – it’s irrelevant.  Instead, focus on what matters and what’s measurable.

Think about the issue this way: At what point is too much travel counter-productive?

Spend too much time on planes and you’re not selling.  Cross too many time zones and you’re not giving clients such good advice, or making such good decisions on that oil rig. Take too many redeyes in coach and you’re seeing a doctor for a cranky neck or worse, deep vein thrombosis.

It’s about cause and effect; travel and impact. So the approach is simple.

First, identify the road warriors in your firm, and their business unit leaders.  Ask those business unit leaders which business metrics matter, and might be affected by too much travel, and are measurable.  Think sales, hours billed, customer satisfaction, safety, etc.

Go to HR, and ask which HR metrics matter, and might be affected by too much travel, and are measurable.  Think absenteeism, engagement, disability costs, retention, etc.

Now use your travel data to find a comparable group of employees that has done much less travel than your road warrior group.  So now you have a cohort of low-travel employees and a cohort of high-travel employees.

We’re almost there.  With a bit of analytical muscle, measure each cohort’s average result on each metric.  Then compare the two groups, testing for statistical differences. Something like this, perhaps:

Voila!  You now have a fact-driven analysis of travel’s impact.  The impact on your business, and the impact on your people. The implications will be clear.

Too much turnover, absenteeism and disability costs among your high-travel group?  Cut back their travel workload and/or loosen your travel policies for the road warriors.

No meaningful differences between the two groups?  Your travel policies are probably fine, but then what is all that extra, possibly excessive, travel really doing for your firm?

Either way, having these facts gives travel managers, HR executives and business leaders a clear-eyed view of travel’s impact.  Making solid business cases for changing travel workloads, travel budgets and travel policies is now ever so much easier.

The best part?  Travel category managers get to lead on this issue.  For you folks that are frustrated by delivering diminishing returns from mature sourcing and policy compliance, you should be first in line to drive this type of study in your organization.

For those interested in jump-starting a travel impact study, tClara and I can help.  We can quickly score your travelers’ Trip Friction™ levels, create the cohorts, and benchmark your firm’s travel intensity to those in our database.

I’ll be at the ACTE Global Conference in Miami at the end of this month, and hope to connect with many of you there.

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Top Reads from 1st Quarter 2010

Last quarter’s most popular topics covered travel ROI, savings, metrics and reverse auctions:

ROI on Travel and Meetings – Why Bother? – challenges the feasibility of placing ROI metrics on trips; says there is a “good enough” alternative.  It’s called management.

The Real Question Behind Travel ROI – searching for post-trip ROI is a long walk in the hot sun.  Far better to focus on this essential question: “What’s the most effective way to achieve my goal?” Sabre and Cisco showed an interesting approach.

Travel Benchmarking Done Well – the Travel GPA tool focuses on actionable benchmarks – stuff that travel managers really need to pay attention to.

Savings Metrics, Rat Farms and KPIs Gone Bad – takes a critical look at three common definitions of savings, and the unintended consequences of each.

Reverse Auctions for Hotels and Car Rates? – wonders if travel suppliers may offer more reverse auctions for their inventory, and the implications for buyers, TMCs and GDSs.

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The Real Question Behind Travel ROI

Charles Petruccelli, President of Global Travel Services at American Express, sees great value in helping companies find their industry-optimized level of travel spend.

Where American Express leads, the travel industry often follows.  So the quest for finding travel ROI isn’t going away.

But is it the right question to answer?  If it isn’t, then what is?  Here’s my take:

I think American Express and other industry leaders should absolutely want to help companies optimize their travel spend.

As Herve’ Sedky, SVP and GM, Global Business Partnerships at American Express Business Travel, said at the Masters Program last week, “Travel is like cholesterol.  There’s good travel and bad travel.  We want more of the good and less of the bad.”

ROI on Travel and Meetings – Why Bother?

Have you noticed a surge of interest in measuring ROI on travel and meeting (T&M) spend?  I’ll get right to the point.  Trying to measure the return on travel or meeting spend is not worth the effort.

It’s like taking a long walk in the desert with a crappy map.  You wouldn’t do it by choice.

I get why suppliers, lobbyists and trade associations want to link spending with a positive economic return, especially in these harsh financial times.  I get why buyers would like some way to measure the ROI of their travel budgets.  And I like numbers  and metrics and quantifying stuff more than most people…so why don’t I like this quest to measure travel ROI?

It’s Impractical