Headline: Realising the business value of a strong corporate travel culture
A recent study from the Harvard Business Review Analytic Services in association with Egencia reveals that a seamless, adequately funded travel programme, when aligned with a company’s strategy, can be a source of competitive advantage today.
In the report, 58 percent of business leaders said that a strong travel culture is very important to their organisation’s business performance. We explore this and a number of other key findings from the study to offer further insights into how companies can translate a strong travel culture into positive, demonstrable business outcomes.
A brief overview of the study
Harvard Business Review Analytic Services in association with Egencia explores the meaning of travel culture and its impact on business performance in the report Travel Culture: Your Competitive Advantage in a Global Market. The report is based on research with 587 business leaders drawn from the Harvard Business Review readership in multiple regions and industry sectors. Just over half of the respondents were from North America. A quarter were in Europe, and the remainder were spread out between APAC, Latin America and the Middle East.
High-level findings include several compelling revelations. For example, over the last year, companies with a strong travel culture had twice the rate of improvement in customer loyalty and retention, market share and employee satisfaction than those companies with a weak travel culture. And companies with a strong travel culture also report being more profitable.
What is a strong travel culture?
The study defines a company with a strong travel culture as one whose leaders and processes support the use of corporate travel as a form of strategic investment. A strong travel culture sees travel as a matter of business value, rather than an expense.
According to the business leaders who participated, the indicators of a strong travel culture include having appropriate funding for corporate travel (72 percent) and executive buy-in and support for travel (61 percent). A strong travel culture also usually includes the provision of corporate travel tools and related technology that are effective and easy to use (61 percent). Flexible travel policies are part of the travel culture mix as well, e.g., being able to travel at any time to any destination if there is a compelling business reason (57 percent).
Travel culture and business performance
58 percent of business leaders said that having a strong travel culture is very important to their organisation’s business performance today. Both internally and externally, a strong travel culture can offer substantial advantages to an organisation with 67 percent of respondents citing increased collaboration as an internal benefit of a strong travel culture. Another 55 percent expressed the view that a strong travel culture led to better management of geographically dispersed teams, and 40 percent felt that it helped unify business culture around the globe.
A strong travel culture supports people to collaborate in person in order to work better together, regardless of where they are. This can help drive improved business performance overall. RedHat, which operates in 40 countries, fits these criteria. Mary Jo Croft, Red Hat’s Senior Global Travel manager, said in the report, “Travel is key to our open culture. It’s important for our associates to meet face-to-face with customers, open-source communities, and one another.”
Understanding the connections between business performance, internal collaboration, dispersed team management, and global culture is important to improving performance. This may be an initially challenging process for your organisation, but it’s worth it.
For instance, you need to discern if your company’s most profitable accounts need a higher level of travel to support their growth. From there, you can prioritise certain travel and put your findings into
action through travel policy. A travel management platform can bring these policies to life, e.g., by building account-related approvers into your approval workflow to streamline booking and arranging.
Improving customer loyalty and retention through travel
The research found that 50 percent of those in organisations with a strong travel culture have seen significant improvements in customer loyalty and retention. In-person interactions make a real difference to the maintenance of external relationships, and other findings support this conclusion too. 62 percent of respondents said that a strong travel culture made for closer relationships with key customers, while 41 percent said a strong travel culture correlated with improved customer experiences.
To ensure your travel programme drives tangible customer loyalty and retention, you’ll likely need to adapt your approach to travel management and rethink the way you budget for travel in your organisation. Companies without a strong travel culture typically take a “cut it, no matter what” approach to travel spend. This approach can easily lead to the business refusing travel and missing the opportunity to increase customer loyalty and retention. Your alternative is to allocate travel funds to projects and meetings that can show results for customer loyalty and retention.
This is only partly a matter of travel management. Your sales and marketing budget process should examine travel as an important factor in achieving customer loyalty and retention. Data can be a powerful force for you here. You can leverage data to help you reposition travel from an expense to an investment in customer relationships.
A travel management platform can provide data that demonstrates the connection between levels of travel and specific customer success metrics. Equipped with data-rich reporting, your sales managers and travel managers can collaboratively determine the best approach to making travel part of your customer loyalty and retention plans.
Increasing profitability with travel
The report’s findings suggest that there’s a strong connection between travel culture and profitability, with nearly half (47 percent) of those in organisations with a strong travel culture seeing a significant improvement in profitability.
51 percent of business leaders interviewed believe that a strong travel culture translates into a better understanding of customer needs—which can be an important driver of increased profitability. As Joy Anzinger, Senior Manager of Global Travel Splunk put it, “We have a lot of loyal customers, and getting out there and helping them solve their problems is key.”
Meanwhile, 55 percent of research respondents believe that a strong travel culture leads to better collaboration with key partners and suppliers. This kind of improved collaboration could translate directly to profitability through lower costs of materials and better terms of service with suppliers.
Realising profitability gains through travel culture is a process of prioritising lead generation, customer-facing, and supply chain related travel. If you’re a large company, these priorities could easily involve thousands of potential suppliers, prospects, and customers. So, the question is, which ones should be visited? To answer this question, you ‘ll need to analyse your data conjointly with information from those people involved in each function. In this way, you can build a profit-driven Return on Investment (ROI) model for your company’s travel budget.
A travel management platform can put the data you need to assess the ROI of business travel at your fingertips. Take your supplier relationships for example, you could create a report that showed the frequency and spend on visits to a specific supplier site. You could then compare this report with evidence of better pricing from that supplier that could tell you if the travel paid off.
The travel management platform could further aid in profit growth by identifying opportunities to save money or negotiate better rates for these supplier visits. A strong travel culture does not mean spending more. It means spending smarter.
The report from Harvard Business Review Analytic Services in association with Egencia suggests that a strong travel culture contributes to better business performance and increased competitiveness. A strong travel culture exists at companies whose leaders and processes support corporate travel as a strategic investment. In practical terms, this equates to funding travel that helps with customer loyalty and retention, closing deals, improved supply chain relationships, and a general focus on travel that supports profitable operations.
Realising the performance benefits of a strong travel culture is a matter of discovering and operationalising travel policies that support such activities. Partnering with a travel management company who delivers a comprehensive travel management platform can be a critical element of this process. It provides your business with the workflows, money-saving travel content, and data-rich reporting that enables the actualisation of your travel culture principles.
Ready to leverage travel for a competitive advantage at your organisation? Read the report to find out more.