How to Optimize Your Travel Budget
Getting the most return on a travel budget is critical to a middle market company's success. Controlling costs and making wise investments can improve your bottom line and help you develop sustainable relationships with clients and stakeholders. The need for business travel will probably never disappear because personal relationships and face-to-face communication are highly important. Before sending a representative, though, your company should ask two basic questions:
- Does the situation require in-person communication? You should have a process to evaluate whether traveling is better than using other communication channels. Your business goals and the specifics of the situation should direct your decision. For example, if you want to update an important client about a project, your objective probably could be achieved using remote conferencing. However, if the goal is to retain an important client and you've just delivered products late, then you'll probably want to send an executive to make a face-to-face apology and present your plan for rectifying the situation. In this case, the client will feel better looking your representative in the eyes when venting frustration, and that representative can then be more personal when reassuring the client and asking for another chance. Anything that involves trust, especially when client retention is at risk, is better done in person and is a good expenditure of your travel budget.
- Do I have other ways to achieve the meeting's goal without spending my travel budget? Spending on travel should be your last resort. To get around this, middle market companies should invest in alternative channels to communicate with stakeholders. If you're constantly sending one employee to travel to an important client, for instance, consider relocating that employee to the client's site. Even though this involves one-time relocation costs, it will eliminate recurring travel costs and save money in the long run. Similarly, consider hiring a local representative near the client. Technological travel substitutes are also a wise investment. There's a dizzying array of communication tools, and they're growing exponentially in quality and cost-effectiveness. Videoconferencing software has improved greatly, so consider testing and integrating one of these platforms.
Agency Partnerships: Optimizing Your Travel Budget
Once you've decided to travel, the next step is to look at ways to optimize expenditures. Giant companies generally develop partnerships with big travel agencies who provide a digital booking platform and service agreements. Because large companies spend huge sums on travel, and because corporate travel agencies gather hotel and airline deals based on scale, large company-agency partnerships are wholly cost efficient and offer personal, customized service to travelers.
Middle market companies don't usually have the volume of travel that would make these exclusive arrangements work. However, more and more travel agencies are offering outsourced services to midsized companies, which are becoming increasingly sophisticated and cost-effective as time progresses. Middle market companies also traditionally have strong business relationships with local agents who can offer customized service, but online platforms now combine this same personalization with convenience. All of this is good news for those seeking to optimize travel budgets. Carefully research the available partnership and outsourcing options and find one that works for your projected travel budget. Don't forget that an agent is no different from any other supplier. They will be happy if you grow and increase your spending volume with them.
Find the Best Deal: Negotiating With Travel Services
When negotiating a business relationship with a travel agent, be very clear about the service level you expect and define the relationship in an agreement or contract. You'll want to balance your company's need for personalized service and customized perks, something that smaller travel firms do extremely well, with the cost benefits of a large-scale agency. Through strong relationships with hotels and airlines, the biggest agents offer lower rates, while smaller ones have the versatility to offer the most customization. Start by understanding your own travel needs, the size of your budget and how much personalized service you want. When considering options, don't hesitate to promote competition among your potential travel agents by asking them to match another's price or offering. Test out options until you find the one that's the most convenient and cost-effective.
When traveling on business, what custom amenities have you accounted for in your budget and how did they affect your bottom line? Tell us by commenting below.
Boston-based Chuck Leddy is an NCMM contributor and a freelance reporter who contributes regularly to The Boston Globe and Harvard Gazette. He also trains Fortune 500 executives in business-communication skills as an instructor for EF Education. Circle him on Google+.