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TMCs need to be on top of their game to survive the recession
Thursday, 01 Feb, 2010
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TravelMole guest comment by Business Travel & Meetings Show event director David Chapple
We may have finally nudged ourselves out of recession last week – albeit by the smallest possible margin – but it’s going to be a while until the business travel industry starts feeling the benefits.
A survey we did for the Business Travel & Meetings Show at the start of the year revealed that 27% had bigger budgets and 35% were planning to book more trips.
While this is positive news, there are still many corporates who are cutting costs for 2010 and that leaves us with the million-dollar question: how – as a TMC – can you make money, and ideally more money, from clients who have less money to spend?
It would seem that the simple answer is to be on top of your game. Which may seem simplistic.
But this has been the overriding quality outlined in every single shortlisted entry to this year’s European Travel Buyer Awards.
According to the corporates, the TMCs who have been most successful over the past 12 months are those who have excelled in customer service, are innovative in their product offering and went above and beyond the call of duty.
They claimed the best TMCs are those that became an integral part of their team; who worked closely with them to introduce different service models, different product options and different ways of working. As a result, they helped them to refine policies, cut costs and reduce carbon emissions.
By tightening up pre-trip approval processes and directly challenging travellers about their reasons for travelling, these TMCs were able to suggest alternative – cheaper and greener – solutions such as video conferencing, taking the train or using lower litre cars.
But the most successful TMCs were those that had also been creative in finding new money making solutions.
One of the ETBA finalists, for example, implemented a risk reward programme with their TMC. A hybrid of a transaction fee model that rewarded the TMC based on the amount of cost reduction they achieved for them. As a result, agency staff went from not picking up 30% of potential cost reductions for the client to missing out on just five per cent. The client saved money and the TMC made money.
Another interesting observation we made when studying the entries to the ETBAs was the number of successful buyers who are procurement specialists using procurement principals to approach business travel buying in an altogether different way, which has led to an additional challenge for TMCs.
At the Business Travel & Meetings Show, TMCs can meet new suppliers, network with peers and be inspired by the best quality free to attend corporate travel conference in Europe helping you increase your service offering, work smarter and do better business.
To register visit www.businesstravelshow.co.uk. We look forward to seeing you there.
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