Travel policies simplify corporate travel programs by standardizing processes and workflows. But as new technologies come to market and the travel industry changes with the times, your organization will have to remain agile - and that includes your travel policy too.
These following key performance indicators will give your organization real insights into the health of your travel program and policy.
Total Negotiated Savings
One of the primary benefits of a consolidated travel program is the ability to negotiate corporate travel rates and pay under market price for travel arrangements. When employees book with preferred travel vendors, your company has the leverage to negotiate better discounts and/or benefits to maximize return on investment. Noncompliance with the corporate travel policy, however, will skew this metric, showing stakeholders where action is necessary to boost compliance.
To determine your total negotiated savings, you need to measure how much money your company would spend on travel booking without its preferred vendor discounts, then subtract the negotiated rates from that value. Just keep in mind that noncompliant travel doesn't count toward realized savings. If you don't have ample visibility into how travelers book, then much of your potential savings may leak through the cracks.
Interested in maximizing your travel contracts? Check out our blog post on 5 tips for negotiating with travel suppliers.
Total Cost of Travel Management
To plan for future growth, your company must have a data-driven understanding of where it stands today. Knowing exactly how much your company spends on travel management will help it define new goals moving forward. These lessons can be applied to airfares, hotel rates, vehicle rentals, meal expenses and more.
You wouldn't use your debit card to pay for groceries without knowing how much money is in your checking account, and you shouldn't book travel without knowing your company's budget. When you take the time to determine the cost of travel management at a company level as well as an individual employee level, you'll gain the ability to make more informed decisions. Include everything from ticket costs to per diems. As you calculate this metric, don't forget to factor in other ancillary fees.
Travel expert, Scott Gillespie, recommends that travel managers consider traveler friction as part of the total cost of the travel program. Strict policies can lead to lost productivity, reluctance to travel, and can even impact employee retention. That's why it is important to evaluate total cost of trips against the quality of trips.
Visibility into traveler satisfaction is important because it can serve as a general metric for tracking the success of your travel policy. If satisfaction rates are low, it indicates something about the travel policy isn't sitting right with frequent travelers. Once you have this information, you can drill deeper to uncover the specific issues. Then, when you form a better understanding of traveler expectations, you can develop a strategy that engages travelers in a positive manner.
Travel managers should consider conducting regular employee surveys to determine satisfaction levels. Establish a maximum score, then calculate actual scores against that to determine a general consensus for how travelers feel about your corporate travel program. This is where a partnership with a travel management company is important. A TMC partner can automate surveys based on specific criteria, so travelers don’t get overwhelmed with survey requests. Likewise, semi-annual or annual surveys leave too much time for travelers to forget certain aspects of their trips. Managed surveys are flexible and considerate of employee time.
The more visibility your organization has into travel bookings, the better. With this information, you can ensure travelers comply with the policy and make adjustments to your strategy as necessary. With booking visibility, you're always looped in and can make intelligent decisions on hard data.
To calculate this metric, add together all booked and ticketed spend, then divide the sum by your organization's total travel spend. The result is the amount of money paid without any visibility. Travel managers can take this data and use it as a launching point for determining where visibility gets lost. It could be that certain travelers aren't complying with the policy. Maybe a section of the policy lacks clear guidance, causing travelers to make their own purchasing decisions.
Monitoring these four metrics will help you uncover areas of improvement and make decisions to reach your goals faster. Click here to learn more how Direct Travel can help you customize key performance indicators for your travel program.