trip friction briefing to gbta 2014

Trip Friction™ A Traveler-Centric KPI

Scott Gillespie Managing Partner tClara Travel Data Made Brighter

About tClara and Scott Gillespie

Scott Gillespie is a leading expert in corporate travel analytics, travel procurement and Managed Travel 2.0

Former Founder and CEO of Travel Analytics (now Concur), ex-AT Kearney principal

MBA, Univ. of Chicago

tClara makes travel data brighter

Pioneer in travel-related turnover analyses

Inventor of synthetic airfare benchmarking

Joint venture between Diio and Scott Gillespie

Where we’re headed

The Leadership Opportunity

The Benchmarking Opportunity

Linking Trip Friction and Turnover

Trip Friction KPIs

Trip Friction™ - Concept and Findings

The Need for New Value

Consolidate TMCs

Consolidate T&E card programs

Consolidate travel data and reporting

Comply with duty of care

Use KPIs and benchmarking

80+ % online adoption

90+ % travel policy compliance

“Optimize” air, hotel and car programs

After 20 years, best practices for Managed Travel 1.0 are well known

We’ve reached diminishing returns

5 Gillespie’s Guide to Travel+Procurement

1995 2015

High Value

>

Incremental Value, Year over Year

Low

The castles have been

built

Solid, safe, enduring – a valuable base

Immobile, inflexible

value

7 Gillespie’s Guide to Travel+Procurement

it’s time

new sources

to find

of

8

not

Castles

Ships We need

Some of you are ready for this now

Rogers Innovation Adoption Curve

16% will adopt early

10

Trip Friction™ Concept and Findings

10

Tough Travel

Travel Policy 5 Star 1 Star

High

Costs

Supplier Cost

Travel Supplier Costs Are Controlled by Travel Policy and Procurement

Source: Scott Gillespie

High

Costs

Supplier Cost

Traveler Friction Is The Hidden Cost of Travel. It’s an HR Issue


Human Cost, or Traveler Friction

• Lost productivity • Reluctance to travel • Negative impacts on recruiting & retention •Traveler health issues


High

Costs

Supplier Cost

The Total Trip Cost Is What Matters


Total Trip Cost

Supplier Cost + Human Cost = Total Trip Cost


Human Cost, or Traveler Friction


tClara measures traveler wear and tear with Trip Friction™ points

6-hour non-stop in Business Class, arriving home on Friday afternoon, after 2 nights away

Trip A 6-hour red-eye flight, with a 4-hour layover, connecting on a regional jet, both legs in Coach, arriving home on Saturday afternoon, after 5 nights away

Trip B

300 Trip Friction

Points

1,000 Points

“My Worst Trip Ever” Contest Winner

15

3 FEB EUG-SFO-LAX, 4 FEB LAX-SFO-EUG, 5 FEB PDX-DFW, 6 FEB DFW-EWR-BOS, 7 FEB BOS-SFO-PDX, 8 FEB EUG-PDX, 9 FEB PDX-ORD-FRA, 15 FEB FRA-LHR, 18 FEB LHR-SFO-EUG, 19 FEB EUG-SFO-ORD, 23 FEB ORD-CLT, 25 FEB CLT-ORD, 26 FEB ORD-MSP, 29 FEB MSP-SFO-EUG.

Highlights include 7 FEB 1:00 AM - 7:00 AM drive from PDX to EUG in 1 foot of snow, jackknifed semis, 8 FEB 10:30 scheduled departure to FRA cancelled because EUG had no de-icing fluid. Arrived in FRA at 6:00 AM with only 4 hours of sleep over three nights -- going right into client/airline meetings. 25 FEB was my birthday.

“25 Day, 26,000 Miles”

Trip Friction Benchmark Categories

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100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Group 2, Low Friction

Group 1, Very Low Friction

Group 3, Fairly Low Friction

Group 4, Medium Friction

Group 5, Fairly High Friction

Group 6, High Friction

Group 7, Very High Friction Group 8, Extremely High Friction

Trips are scored, then travelers are sorted by their Trip Friction Scores

Middle 20%

Top 15%

Trip Friction Driver: Nights Away from Home

Trip Friction Benchmark Findings

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Source: tClara LLC

Trip Friction Driver: Hours on a Plane


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Source: tClara LLC

Trip Friction Driver: Hours in Economy Seats

(by booking class)


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Source: tClara LLC

Trip Friction Driver: Traveling on Personal Time

From 6pm to 8am, M-F Anytime on a weekend


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Source: tClara LLC

Road Warrior* Benchmarks (*Top 15% of all travelers by Trip Friction points)

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Selected Trip Friction Metric U.S. Travelers European Travelers

Nights Away per Month 9.4 6.1

Flight Hours per Month 32.0 15.9

Share of Flight Hours Booked in Economy Class

82% 66%

Share of Flight Hours on Personal Time

65% 65%

Source: tClara LLC

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Trip Friction™ KPIs

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Tough Travel

Find How Many Travelers Are in Each Category

Source: AirPlus Trip Friction Benchmark Study, June 2014

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Compare your distribution to the Benchmark

Source: AirPlus Trip Friction Benchmark Study, June 2014

Trip Friction Key Performance Indicators

25

Firm-wide Trip Friction Score, where

100% = Industry Average

“Ours is 93%, seven percent lower than our peers.”

Road Warrior Score, based on

Top 15% of Travelers

“Ours is 104% - four percent higher than our peers.”

Individual Traveler Trip Friction Scores

For tracking, trending and turnover prevention

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Linking Trip Friction™ and Turnover

26

Tough Travel

Companies spend about the same on

travel as

they do on turnover: 1-2%

of revenues1

1) “Retention of Key Talent and the Role of Rewards”, Scott, Hay Group, June 2012. tClara analysis 2) WorldatWork's "Survey of Bonus Programs and Practices 2014"

The use of sign-on bonuses is at an

all-time high2

Turnover is a Worthy Problem

http://www.worldatwork.org/waw/adimLink?id=75444

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U.S. business travelers avoided taking 2.7 trips

on average last year due to the hassle of air travel¹

International travelers submit 80% more health claims than non-travelers2

1) U.S. Travel Association survey, June 2014 2) Occupational and Environmental Medicine, May 2002

Traveler Burnout Problems

29

Is too much

travel hurting your

business?


High

Costs

Supplier Cost



Lowest Total Cost

Total Trip Cost

Human Cost, or Trip Friction


Step 1 – Identify two cohorts of travelers within your firm

P. 31

Use Trip Friction analysis to categorize travelers objectively

Top 15% Source: AirPlus Trip Friction Benchmark Study, June 2014

Travel Impact Metrics

Turnover

Engagement Scores

Health Costs

Sales

Productivity

HR

Business

Step 2 - Choose metrics that matter, and build a fact base from each cohort

P. 33

Travel Impact Metrics

Turnover

Engagement Scores

Health Costs

Sales

Productivity

Customer Satisfaction

High Friction Travelers’

Differences +9%

-11%

+7%

-12%

-8%

+15%

Step 3 - Then test for differences between the two cohorts

HR

Business

P. 34

Step 4 - Develop mitigation strategies for this key group of travelers

Less

Travel

Easier,

Safer,

Healthier Travel

Trip Bonuses

Recognition,

Gamification

Support,

Counseling

High

Friction

Tiered Policies Traveler-specific

The Very Real Cost of Turnover

35

Sally generates $600K per year in revenue.

She earns $150K all in;

Her travel costs $70K, none is client-billable.

So Sally contributes $380K per year to her firm.

HR knows it takes 4 months to find and train a replacement for Sally

The Very Real Cost of Turnover

$50K

36

Losing Sally costs $128K

How much should you pay to keep Sally from leaving?

Sally’s Annual Travel Costs

Sally spends 100 nights on the road

And 300 hours on planes.

Current Travel Policy

At $150/RN =$15,000

Better Travel Policy

$250/RN =$25,000

At $120/hr =$36,000

At $300/hr =$90,000

$51,000/Yr $115,000/Yr

A Better Policy Costs $64,000 per year

Some Good Questions:

38

Should the firm pay $64K to save $128K?

What is Sally’s likelihood of leaving due to her travel workload?

–What does Sally really want?

If Sally traveled 10-20% less, what would her revenue do?

–Could you fund some part of the better travel policy by decreasing the travel workload?

Would a better travel policy shrink the time needed to find Sally’s replacement?

Would a better travel policy help recruit better hires?

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39

Tough Travel

Four Benefits of Trip Friction Benchmarking

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1. Puts your travel program into a new and better context

• How much your firm travels

• How hard your firm travels

2. Measures traveler wear and tear consistently within and between firms

• Identifies Road Warriors using objective metrics

3. Brings new light to travel policy decisions

4. Frames the travel-related turnover problem

• Essential to true travel program optimization

Trip Friction Customized Industry Benchmark Package

Trip Friction Industry Benchmark Score

Road Warrior Index Score

Detailed report on all major drivers of friction

Controllable vs. not

Trip Friction scores and percentiles for each traveler

One year of ticket data from your TMC

No HR data

Five firms or more per benchmark group

41

We Need: You Get:

42


42

Tough Travel


High

Costs

Supplier Cost


Lowest Total Cost

Total Trip Cost

Human Cost, or Trip Friction


Must quantify the red curve

44

None >> Accumulated Trip Friction >> Extreme

Travel-driven Turnover

High

None

Your Traveler Friction Curves Can Be Measured

45


High

None



46


High

Begin Retention Risk Management

None



Solving the Travel-Related Turnover Problem

47

Score all travelers’ Trip Friction for the last 2-3 years

HR: calculate turnover rates

HR and Finance: estimate cost of turnover

Business leaders: decide the priority

Travel, HR and Finance: develop options, make recommendations

Business leaders decide; affects Travel, HR and Procurement

Expected Benefits Go Well Beyond Travel

48

More attractive travel culture

Better road warrior retention

Stronger road warrior engagement

Lower health care costs among road warriors

Truly optimized travel program

Better recruiting results, shorter replacement times

Reduction in turnover costs

You’re a Good Candidate If:

49

Your firm has a lot of valuable road warriors, and retention is a problem

You need to find new sources of value in the travel category

You have access to at least two years of TMC (travel agency) ticketing data

Your travel policy is influenced by HR

Bonus: The travel category reports to HR

You have a Business Exec sponsor in mind

You want to become a more valuable partner to senior management

How big is the problem?

50

Finance HR

Business Travel

What are the best solutions?

You!

Travel-related Turnover at Your Firm

What we’ve covered



Linking Trip Friction and Turnover

Trip Friction KPIs

Trip Friction™ - Concept and Findings

The Need for New Value

52

Thank you!

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Questions and comments?

Scott Gillespie [email protected]

Glad to connect on LinkedIn

mailto:[email protected]