By Erin Singleton, Senior Director, Marketing
Managing a corporate travel program has gotten more and more complex with each passing year, and the saying “you can’t manage what you can’t measure,” has never been more relevant.
Travel Managers can (and should) be looking beyond the traditional metrics of cost savings and cost avoidance to measure the success of their programs. There are so many ways to evaluate program performance, and depending on your goals, the key performance indicators (KPIs) you’re measuring might look completely different from other travel programs. For example, if building a sustainable business travel program is your key focus area, you will have a different definition of success from a travel manager who is focused primarily on traveler experience. What does that mean in practice? Let’s dive in.
Measuring the impact of your sustainability approach
Sustainability has become a key focus area in modern travel programs. The most important (and perhaps the most obvious) metric to measure is absolute emissions in tons of CO2 to ensure that travel is a key contributor to overall corporate sustainability goals. However, there are other metrics that measure the success of sustainability efforts that often get overlooked, including the share of flights on carbon-efficient aircraft, the share of electric vehicle rental cars, the market share of rail vs. air on eligible routes, water usage per hotel room night, and more.
We know we can’t focus solely on the environment at the expense of travelers, so traveler wellbeing is another metric that is a vital part of a sustainability approach. At Advito, we’ve developed a Traveler Wellbeing Dashboard that analyzes more than 10 data points across a trip that could cause friction (such as flight time, duration, layovers, and even air pollution levels at the destination, among others) to assign trips a wellness score. This ensures that there is balance in a travel program and that we’re considering the wellbeing of both employees and the environment.
Are your supplier programs driving value?
Across supplier programs, savings numbers aren’t the only ones that you should be considering. For example, visibility into booking class availability is crucial because while a pricing offer may look competitive on paper, the true value could be diluted in practice due to low availability of the applicable fare type. We use our Airfare Predictor tool to provide insight on future booking class availability by carrier and market, anywhere between 1 and 180 days before departure.
In our clients’ hotel programs, we’ve identified that traditional cost savings metrics aren’t as valuable as they once were in measuring success. One new metric we encourage clients to look at to determine program competitiveness is the average booked rate (ABR) to average negotiated rate (ANR) variance. If you’re paying well above their negotiated rates at some of (or even most of) your top properties, that can be a catalyst to re-examine your hotel program ensuring it is still fitting your overall travel program needs and supporting business goals.
Rate availability is another hotel program KPI that is important to track consistently. Over several years of data collection, we’ve found that corporate negotiated rates are only available about 70% of the time. This means that for nearly one-third of the year, negotiated rates aren’t being made available for travelers to book. Consistent rate availability audits are key to ensuring that the properties you’re negotiating with during sourcing make the rates available year-round, or risk potential exclusion from the travel program.
Other valuable KPIs to consider include:
- Preferred supplier coverage (spend covered by contracts): negotiate with suppliers that have route networks that are optimally aligned with your travel footprint.
- Average fare trending: increased savings doesn’t necessarily mean a lower fare paid, since deeper discounts are typically offered on more expensive published fares.
- Policy compliance: set airfare variance thresholds that makes sense for your program, i.e. balancing flexible options for your travelers against cost containment objectives. Advance booking metrics can be part of the measurement, however the correlation between advance booking window and fare level is not as reliable as it once was.
- Surcharges as a percentage of total spend: Some airlines have far higher surcharges vs competitors on the same route. These surcharges often lack transparency and are a non-negotiable component of the total fare.
- Trip ROI (success rate): This can be a valuable metric for identifying nonessential travel, ultimately leading to a reduction in overall air spend.
- Discount utilization: understand if discounts have been negotiated in the cabins and fare classes that are more closely aligned to traveler booking behavior.
The key to success: engaging your travelers
One of the most crucial elements of a successful travel program is educated and engaged travelers. It doesn’t make sense to spend an incredible amount of effort to build a competitive travel program if your travelers don’t know how to use it.
At Advito, our marketing and communications experts on the Engage team have tried and true tactics to make sure that our clients are communicating expectations to their travelers in the right channels at the right time. Just like any other part of the travel program, measuring KPIs across your communications program is crucial to understanding whether it’s effectively getting your message across.
Measuring basic marketing KPIs, like impressions/views, click-through rates, website traffic, conversion rates (the percentage of the audience that completed the desired action), bounce rates, and more, is key to understanding if your message is resonating with your audience.
Perhaps the most important thing to look at is program performance metrics overlayed with your marketing KPIs. TMC data, like BCD’s DecisionSource data, can provide insights into behavior shifts, such as increasing the share of preferred properties or airlines booked vs. non-preferred, or the percentage of sustainable travel behavior before and after a communications campaign.
All of these metrics, combined with other data sources (agency, expense, supplier, events, etc…) can become powerful tools to help understand what marketing strategies are working and where adjustments are needed to optimize travel program performance and achieve your business goals.
Are you ready to expand your definition of success and start measuring the metrics that drive real value to your travel program? Reach out to us today to get started.