Ever notice how travel management companies have a hard time selling their value?
It's not a complicated value proposition. "We'll help you book travel at low prices and help your travelers on the road, so you'll save money and sleep better."
That's a pretty easy benefit statement to grasp, right? So that's not really the problem.
Two Big Problems
TMCs compete on the wrong metric, and they sell to the wrong people.
First, the metric they compete on is price, namely the transaction fee. Price may be the metric of choice for the procurement crowd, but it is the worst metric for those TMCs who add real value.
On to the second problem. TMCs sell to travel managers and procurement managers. Is it traditional? Safe? Expected? Sure, but still wrong__in this way:
Travel managers are very important stakeholders, and they need to have a clear understanding of how one TMC differs from another. Same goes for the procurement managers__these folks are charged with negotiating contracts that deliver real value to their organization.
And yes, it's hard to imagine how a TMC could win much business by ignoring either of these VIP stakeholders. So it's not about ignoring or minimizing these key parties.
Find The VVIPs
Instead, it's all about selling to the VVIP stakeholders__the men and women who manage big travel budgets__the folks who are fully accountable for making the tough decisions about whether or not to trade down to a harsher travel policy, knowing they'll lose good people by doing so.
These are the people TMCs need to sell to__the guys and gals who own the travel budgets. It's their necks on the line for making good decisions about sending Sally to Sydney in coach or in business. They wrestle with the tradeoffs of higher airfares and hotel bills in return for more loyal road warriors.
Which brings us back to the first problem. Instead of price, TMCs must sell the value of their expertise. But not in the current/classic/me-too way that passes today's RFP 101 test.
Sell The Bigger Picture
Instead, TMCs must sell their ability to deliver broader business value. Value that goes way beyond that measured by traditional travel metrics.
TMCs must learn to sell the kind of business value that P&L owners care about. Hint: It's not about your best-in-class online adoption rate.
TMC execs, you gotta think and then sell in terms of travel impact on metrics that P&L owners care about. Of course they worry about their travel budgets. So showing how to conserve them is necessary__but it's not sufficient.
Focus On The Total Cost Of Travel
The other part of the equation is that of the impact of travel on road warriors. All that wear and tear has a cost__a real, quantifiable and significant cost.
So it's simple__TMCs need to show travel budget owners how good their TMC is at helping them to minimize the total cost of travel. Not just the supplier costs, but also the real, quantifiable and significant costs of traveler wear and tear.
Getting a company to minimize the combination of these two costs is true travel program optimization. Any other claim about "We'll optimize your travel program!" is typical TMC marketing hooey.
The Better Approach
Let's make this easy. If you're a TMC sales exec, and you have a prospective account in mind, find out who manages the biggest number of their road warriors. Say it's Joe, their EVP of Sales. Here we go:
You get into Joe's business. "So, Joe, which of these issues regarding your road warriors is giving you any trouble: retention? recruiting? productivity? health? safety?"
The beauty is there is no dead-end answer. If Joe calls out one of these issues, off you go down the trail of explaining the options for improving that part of the traveler's experience.
If Joe says, "Nope, we're good on all that," then you've got license to ask about old-school ways of controlling travel costs, and hopefully bring up a few new-school ways to keep things fresh.
The point is you, the TMC sales exec, get to__need to__have a much more relevant discussion about how travel is impacting the guy's business.
This is a much better way of framing the value of a TMC. You'll be talking to, and quietly selling to, the real decision makers, and I'll bet dollars to donuts that they never ask about your price ... at least not in that initial conversation.
If you like this way of thinking, see this deck on the "Total Cost of Travel Paradigm." It's a condensed version of the 90-minute presentation I'm giving around the country. It's aimed mainly at travel managers who want to advance their careers by adding a strategic dimension to their job ... but all you bright TMC sales and account management folks will make quick sense of it.
I welcome invitations to speak and train on this topic. Meanwhile, I'll be writing more about this new paradigm in the future. For related articles, see "A Brighter Way to Measure Travel's Impact" and "Why Data Predicting Trumps Data Reporting."
Scott Gillespie is the author of Gillespie's Guide to Travel + Procurement. These thoughts are excerpted with permission from his blog.