Driven by innovations in expense management technology and evolving corporate philosophies around T&E spending, companies are recognizing the value of actionable intelligence gleaned from T&E data. But even as systems advance and T&E is viewed not as simply a cost to control, accurate ROIs for travel spending remain an elusive goal. Among more than 300 corporate travel managers surveyed recently by BCD Travel and the Association of Corporate Travel Executives, 81 percent said it is important to measure business travel ROI but just 13 percent actually did so. So what's holding companies back? It comes down to two main obstacles, experts noted, both related to T&E data: how to get it and what to do with it.
BTN's 2019 Expense Management Survey pegged customized data and reporting as the most important deliverable for expense providers. Yet, it still can lack the clarity and specificity corporates would need to begin calculating travel ROI. "My biggest challenge is having a reliable source from which to draw data," said Mattie Yallaly, corporate T&E manager for digital consulting firm Perficient. "I can use my TMC's reporting, but that doesn't account for employees booking outside of the booking tool. I can use expense data, but the locations provided are not always an accurate reflection of the accommodation and can't determine the length of stay."
Cognizant of this challenge, expense management providers have emphasized integrations with travel booking systems and corporate credit cards to bring the three records of travel spend together and maximize the intelligence they can deliver to T&E managers and, ultimately, to corporate decision makers. A handful of these integrations have matured into best practice. BTN's survey showed 78 percent of implemented expense systems digest corporate card data and 63 percent pick up travel booking data. Seventy percent of respondents hook up their expense systems to feed data to the general ledger.
Just a fraction integrate expense data with a customer relationship management tool like Salesforce, but the 20 percent that do represent a sign that the motivation to connect travel spend to overall revenue is alive and well. A couple expense providers have introduced solutions.
Bridging the Gap
Chrome River, which merged with Certify this month, is among the most vocal proponents of using expense management systems to increase insight into business travel ROI. "The biggest problem in determining ROI is that there isn't really a huge amount of analysis done after the fact," noted Chrome River chief marketing officer Julie Roy. "You have travel managers or finance teams looking at the overall cost of travel and other related expenses, and then you have sales teams focused on revenue, but there isn't a streamlined approach or tool to help with connecting the expenses to the impact on sales. If companies are analyzing the data, it's generally a pretty manual process."
To help break down those information silos, the company in late 2017 launched Prosper, a tool that integrates with Salesforce to present all the relevant data in one place so companies can match travel spending with revenue generated from an individual trip. Companies can use that data to determine the most efficient spending patterns and subsequently leverage those patterns for future budgeting allocations and other strategic decisions, Roy said.
Formed in 2017, U.K.-headquartered T&E management startup SalesTrip rolled out its service through Salesforce in February, after two years of working with pilot clients. Like Prosper, SalesTrip's bread and butter is connecting travel spending with revenue to better gauge outcomes on a trip-by-trip basis and help guide future decision-making around spending. "Whether it's travel or meals or entertainment, whatever you're spending to try to win a sale, we put those expenditures right next to revenue opportunities, so you can see how much you had to spend to win that opportunity," said SalesTrip VP of product Eoin Landers.
That presentation makes that data more actionable, he added. "We're putting the spending right in front of sales directors at the same level as revenue, where they live and breathe. The amount a company spends is as important as the money they win, so it should be in the same system." Armed with granular data for specific revenue opportunities, companies can make more informed spending decisions, according to Landers. "If you're a firm based in New York City and you have a major client in Dallas, you'll know just how much it costs to make that client happy, and you may decide you should hire somebody in Dallas," he said.
Is Travel ROI a Bridge Too Far?
But some experts argue that, while data granularity and trip-specific measurement have their merits, the connection between T&E spend and revenue is essentially a black box, the precise inner workings of which are inherently unknowable. GoldSpring Consulting partner Will Tate called a tried-and-true method of determining ROI the holy grail, for which he's been searching for nearly 20 years. In the case of a prospective client, "If I decide to go meet with that company—say it's a $1,000 trip—and then I win their business, can I definitively say that $1,000 of travel was what won it? Or could I still have won it with just a phone call?"
On behalf of clients, Tate has gone back over several years of T&E and revenue data to try to find a consistent connection. "It was all over the place," he said. "We couldn't find any correlation," he recalled. "There are too many other variables, including the economy and existing relationships, where if a client already loves you, you're going to win their business whether you go see them or not."
Complicating matters further: Often, the trips that really seal the deal for winning new business from existing clients aren't classified as sales trips, Tate observed. Instead, an emergency repair or other warranty-required trip could be what makes the impression that counts. "If a customer has an emergency and you do a good job fixing the problem quickly, that could turn into another sale, but the trip wouldn't be classified as a sales trip," he noted. "Ultimately, there are so many touch points with a client that it's very difficult to correlate a one-to-one relationship between a given trip and resulting sales."
However, there are metrics that can be used to capture customer satisfaction on a more holistic level, according to Roy. Any customer interaction that has some kind of key performance indicator could measure the ROI of travel, she said, noting that net promoter scores often are used to measure customer service and success of teams. Using NPS data, Roy said, providers can home in on answers to a variety of questions about overall travel spending. "Do customers who receive more frequent visits from the team or have more money spent on them in terms of corporate hospitality have a higher NPS? How well does it correlate? Is there an optimum level of in-person interaction or some kind of threshold above which NPS doesn't improve?"
And it's not just client-facing travel. Companies also can use KPIs to correlate intracompany trips with positive returns. Perhaps retention and morale among employees in remote offices improve when they receive frequent visits from executive team members, for example. "While there are obviously several factors at play in terms of both of these scenarios, organizations can see what role, if any, travel frequency and spend has on these outcomes," Roy said.
Asking the Right Questions
When industrial manufacturing giant Siemens pushed to optimize its travel spend, it leaned hard on its data for answers on how best to invest the company's travel dollars. It came up short in terms of cracking the ROI code. "We couldn't come up with a good enough formula to measure ROI," said Steven Schoen, Siemens senior director of mobility services for the Americas and BTN's 2017 Travel Manager of the Year. Siemens' often-lengthy lag time between receiving an order and realizing the associated revenue, as much as two years, provided another wrinkle. Instead, Siemens initially landed on limiting travel for non-client-facing purposes but has since extended that practice to additional trip types.
"We turned many in-office internal meetings into virtual collaborations or had some people travel and some attend virtually," Schoen said, adding that Siemens even has partially virtualized many service calls, reducing the number of technicians required to travel to a call location. "We've been able to reduce the number of people required for service, so we no longer just think automatically in terms of getting on an airplane," he said.
While there may not yet be a perfect method to calculate business travel ROI, there's no doubt that companies are working toward a clearer picture, and that progress should continue as technology and evaluation strategies keep advancing, predicted Tate: "Travel ROI is a very valuable measure, so even if there's no perfect answer yet, we're asking the right questions and we're getting closer by asking those questions."