Recognizing that many business travelers ignore their companies’ travel policies, Carlson Wagonlit Travel is developing new products to address compliance issues.
CWT’s approach starts with the premise that mandates don’t work well. Companies that have mandates and are willing to punish violators run into a compliance ceiling. Compliance becomes a game with travel managers forever trying to catch up with the inventive new ways that travelers find to bend the rules.
“Most companies never even get to that point,” Joel Wartgow, senior director of CWT Solutions Group told Travel Market Report. “The corporate culture is not conducive to mandates or is not supportive of mandates.
“You may say that if you book outside policy, you won’t be reimbursed, but most companies have trouble actually doing that.”
CWT is working on two alternatives to mandates. One is a scorecard that rewards travelers for doing the right thing. The other is traveler segmentation based on frequency of travel and developing different travel policies for each segment.
Wartgow spoke with Travel Market Report about how companies might create novel strategies that avoid mandates and compliance ceilings.
Why are travelers noncompliant with travel policy?
Wartgow: It’s a matter of information. There used to be one way to book a ticket: you called the agency, you got your ticket, and everything was settled. Now the majority of those transactions occur online.
The Internet means travelers have more access to more information than ever before, which allows them to challenge policy. They can easily shop around to find an itinerary or a fare that better meets their travel needs than the itinerary they were directed to through preferred vendors and booking channels.
How does a traveler scorecard change that reality?
Wartgow: The inspiration behind the scorecard is that as a traveler, you have a constant flow of incoming information. Companies usually take one of two paths. One is to try to control the information flow, put limitations on information access. Or they leave access open. In extreme cases, companies tell travelers they don’t care how they book.
So instead of trying to fight the flow of information, let’s add to it, but in a very personal way.
Let’s filter in key information that is important to the company about the impact of booking outside policy. Let’s give the traveler information to help understand why he or she is being asked to make certain decisions and behave in a certain way.
What the traveler sees is, ‘This is my trip and this is the impact on the company of the decisions I made.’ What the scorecard does is provide positive influence to generate positive behavior using rewards.
Isn’t that the basis of airline frequent flier and hotel frequent stay programs?
Wartgow: Airlines and hotels have figured out that their most frequent travelers deserve some conveniences and rewards for their loyalty: priority seating, priority upgrades, priority screening. Even TSA has acknowledged that rewards can change behavior in a positive way.
The traveler scorecard is a way to focus on frequent travelers and, as a company, provide them with opportunity, motivation or even just recognition for making the right decision by traveling within policy.
The idea is that your travelers, if they know the impact of their travel decisions on the company, are going to choose to do the right thing when they can — and if they can’t, there is probably a pretty good reason for it. Travelers who can’t seem to comply on a regular basis and can’t come up with a good reason for their behavior are probably not people you want representing your company anyway.
Have you rolled out a pilot program?
Wartgow: We’re developing a pilot now, customized for different customers.
One company might say they are interested in managing advance purchase for airline tickets because they see that as a significant opportunity for savings. We might build a methodology that says every time a traveler is compliant to that metric, they earn a score. And when you reach a certain score, you earn rewards.
What’s the concept behind segmenting corporate travelers?
Wartgow: Most companies have the majority of their travel spend generated by a small number of frequent travelers. It’s the 80-20 rule. Historically, we have focused on the 20% of frequent travelers.
But the 80% can still drive a considerable amount of travel spend. Each infrequent traveler may only travel four times a year, but the aggregate dollars add up because there are so many occasional travelers.
Do infrequent travelers need to fly nonstop? Or can you send them through a connecting city and save money? Do you need to put them in a hotel across the street from the office, or can you put them in a hotel down the street and let them take the free shuttle?
How far can you segment corporate travelers?
Wartgow: Three groups is probably manageable. You’ve got expert travelers, fairly frequent travelers, and casual travelers. You can adapt travel policy to cover all three groups.
Provide your most frequent travelers with a little more convenience. You can give infrequent travelers an alternative itinerary and an alternative hotel that don’t greatly impact their productivity but still generate savings.
Aren’t you encouraging less-frequent travelers to book outside policy to get more convenient flights and hotels?
Wartgow: Bring in the traveler scorecard. Every time you make a policy-compliant trip, you earn credit toward being classified as a frequent traveler. And the frequent travelers get to fly direct and stay across the street. When you link all the pieces together, it becomes a powerful tool to influence behavior.