Google Builds Internal Rewards Scheme

Google's nerds made a cool air travel program.

Using an internally built application called Trips, travelers check what they want to spend or what they have already spent against a database of more than 300 fare caps, based generally on 7-day advance purchase coach rates. If the fare they want to buy (or have bought) is under the cap, half of the difference is banked as a credit for that traveler. The traveler can then use his or her credits to offset dollars spent in excess of caps on future fares--such as to purchase a premium service. Travelers booking over a cap can also claim an exception, which requires vice presidential approval, or pay the difference personally.

Travelers are allowed to book wherever they want, although about 60 percent do use the preferred travel management company, Carlson Wagonlit Travel. Credits are not applicable to personal travel, but Google by the end of the third quarter plans to create an option for infrequent travelers to donate credited travel dollars to charity.

The program's benefits include "few very unhappy travelers," smarter buying behavior, greater use of low rates (including negotiated fares when they're lowest) and equal treatment globally, according to global travel manager Michael Tangney, who described the program here at the Paragon Business Travel Conference & Expo.

"Clever design can provide control," said Tangney. Based largely on traveler feedback after about 9,000 "Googlers" viewed a goofy video on business travel by two travelers, the variation on a loyalty program launched in December with the goal of improving traveler satisfaction and controlling spending.

The process applies post-trip as well as pre-trip since it is tied to expense reimbursement rather than booking. During the reimbursement process with Google's Oracle expense system, a Trips identification number is required and pulls in data on credit and fare differentials.

Reviewed monthly, the fare caps offer a base for budgeting. Management information on their use helps Google understand market trends. "People will find better deals themselves, but not always," said Tangney. "In the longer term, if the agency is providing a lower price [and people are not buying that way], I need to do a better job promoting that. If the open market price is better, than the agency is not doing something right or I need a better deal. I should always be able to get a better deal."

The program's overall effectiveness remains to be seen. Tangney said costs had "probably dropped," but he wanted to "reserve judgment" following "three months of solid data."

"We're aware of the liability we're building" with the credits, he added.

One observer questioned whether the program would encourage travelers to take extra trips on which they can substantially beat the caps, in order to build up their banks--much as frequent flyers sometimes do to qualify for premium status. "We trust people to do what they think is right," Tangney said.

Another participant suggested that allowing bookings outside the preferred TMC may damage negotiating leverage--particularly with suppliers that require the use of a third party, such as Prism Group, to analyze buying data for negotiations. In response, Tangney said that for such suppliers, Google presents the overall Trips data to supplement Prism information (which comes from the TMC).

He acknowledged that such a scheme would not work for every company.

Asked whether there is a safety or security risk in not requiring travelers to use the TMC and its traveler tracking capabilities, Tangney said he shares that concern. Google does not track travelers. "We have the capability, by pushing the requirement to do 'Trips' before the person travels, but we don't do that," he said. "It is something we might look to in the future. We do sell [security-related tracking] as an advantage of going through the travel agency."

In part because Googlers are comfortable with online booking and aware of what's available online, some think "only they" can find good deals, Tangney said. His department adopts several companywide principles, including: focus on the user and "all else will follow," "fast is better than slow" and "there is always more information out there." In the company's travel policy, user satisfaction is paramount and there are no mandates. There is flexibility, as a result, on class of service.

But the travel program does offer guidelines and structure, and emphasizes that travel agency support is important. "No guidelines would not be effective," said Tangney. "They want to know what they should be doing." Ultimately, Googlers "have the best information about what they want to do" and are "pretty frugal," said Tangney, who was new to travel when he joined Google about six months ago.

Whether Google will expand the program to lodging or other segments is to be determined, Tangney said.

Google manages travel in 28 countries.