As a procurement professional, you’ll know that taking on a new travel management company (TMC) is a major commitment. Make the right choice and you could be saving time and money, as well as opening the door to a more positive business travel experience. Make the wrong choice and you could be opening yourself up to an inefficient, costly service and friction from within your organisation.
At Click, we work with procurement departments and category managers often and so in order to help streamline the procurement process, we’ve gathered together 5 questions that every procurement professional should ask before contracting with a travel supplier:
#1 Will the supplier offer an online adoption guarantee?
In times gone by TMCs have tried to separate themselves from the travel booking options made available by the Internet, however in recent years the tide has started to turn and more modern TMCs are combining the benefits of booking online (namely the increase in efficiency, paired with the increase in choice for travellers…) with the level of service offered by expert travel account managers.
Increasing how much of your travel is booked online has the potential to produce staggering savings in terms of both cost and time, so it’s no wonder that a lot of forward-thinking companies look to their business travel agents to drive bookings online. If you’re keen to go down this route, make sure your prospective supplier has the requisite technology and is happy to provide an online adoption guarantee.
If they’re not happy to provide such a guarantee, alarm bells should start ringing – what’s holding them back? Lack of expertise? No access to content aggregation? Whatever it is, you need to be confident that they can deliver on driving bookings online before you sign any contracts.
#2 How will the supplier approach Service Level Agreements (SLA) and, more importantly, how will they be tracked?
It’s an old adage that ‘what gets measured gets done’, and so, at tender or contract negotiation stage, a lot of effort is put into devising performance measures to define the customer service that your chosen travel supplier will provide.
A good TMC will keep things simple and work with you to create a clear and concise set of SLAs that both sides agree on. It’s important to be flexible, but it’s equally as important to feel completely confident in your contract before proceeding. You need to know that the supplier not only backs the SLAs, but that they are able to provide you with fair and easy-to-access tracking. From pick up response to resolution times and complaints procedures, you should be able to get hold of all relevant metrics at frequent intervals, and have the supplier prove that they can supply the agreed information before you sign.
Finally, make sure that any targets that are set before the implementation process begins are revisited and discussed later on during implementation – this is to make sure they remain achievable and that you’re pushing your supplier to provide exactly what you need.
#3 If the supplier is offering a commission rebate, will they guarantee the amount?
Commission rebate is now a slightly ‘old-school’ way of doing things, but it’s a commercial model that some TMCs do still favour. The concept is simple: the customer pays a transaction fee for making a booking, and the TMC returns to the customer any revenue that it receives from the supplier. A commission rebate might sound enticing, but it’s important to remember that unless the supplier guarantees you a set amount in return, they aren’t contractually obliged to give you a penny back.
So, with this in mind, if the supplier operates a commission rebate model, you’ll pay a set fee per transaction, but unless those fees are super competitive and you have a guaranteed rebate, you’ll take the financial hit if no rebate arrives.
As a procurement professional, your priority will be to look after the interests of your organisation rather than those of the supplier and so you should push for a guaranteed rebate. Alternatively, look out for a TMC with a retention model, where the TMC keeps the supplier revenue, and consequently the risk, in exchange for lower transaction fees.
#4 What references does the supplier have?
It’s a company’s job to convince you that they’re the right choice for your organisation and it’s procurement’s job to analyse their content and quiz their representatives.
However, hearing what other clients have to say about a supplier is often much more useful than anything they could ever say about themselves. Ask the supplier for testimonials or case studies from their customers; after all, these are the people who use their service day to day and who will be best placed to give you the lowdown.
Or, even better, rather than ask for references from the supplier, find your own – post in groups on LinkedIn and ask for opinion, speak to existing customers and even former customers to get a less weighted view on the pros and cons of going with a particular supplier. It’s all part of the thorough research exercise that should take place before contracting.
#5 How are you going to implement your service?
Decision talks can be lengthy and usually focus on the impact that your new travel supplier will have on your organisation further down the line, but they often skip over the implementation process completely, despite the fact that this can be the most challenging part of moving suppliers.
Ideally, your supplier will have a specialist implementation team, whose job it is to make sure your supplier move goes as smoothly as possible. Push the supplier on deadlines for milestones and make sure they will be keeping your people up-to-date, trained and happy with the new system.
More practical procurement advice…
The process of procuring a travel supplier has its own quirks and individualities and we want to make things easier, so we’ve compiled a variety of different resources all with the aim of streamlining the process of procuring travel; for more procurement and travel management advice, insight and information, click the button below.