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Travel Data Made Brighter
A Gillespie+DiioVenture
WhyTrip Friction™ Matters
And HowTo Use It
March, 2014
tClara andTrip Fr...
Scott Gillespie
• Co-founder of tClara, a travel data
analytics firm focusing onTrip
FrictionTM
• Speaker and writer on in...
Little change in
100 years
3/30/2014 3Gillespie’s Guide to Travel+Procurement
Where we’re headed
Discuss and Debate
Engaging the Business
Traveler Friction
We Need New Frontiers
Managed Travel 1.0 Has...
• 1994: Delta Air Lines caps commissions, triggers
TMC transaction fees and cost center mentality
• Late 90’s: Strategic s...
 ConsolidateTMCs
 ConsolidateT&E card programs
 Consolidate travel data and reporting
 Comply with duty of care
 Use ...
ManagedTravel 1.0 has
reached diminishing returns
3/30/2014 7Gillespie’s Guide toTravel+Procurement
1995 2015
High
>
Incre...
Solid, safe, enduring –
a valuable base
Immobile,
inflexible
value
3/30/2014 9Gillespie’s Guide toTravel+Procurement
it’s time
new sources
to find
of
3/30/2014 1
not
Castles
Ships
We need
Where are the new frontiers?
3/30/2014 1Gillespie’s Guide toTravel+Procurement
Traveler Friction
How do we optimize
a travel program?
Travel Program KPIs
Spend
Savings
Prices
Variances
Finance,
Procurement
Policy
Compliance
Traveler
Satisfaction.
Travelers...
Travel Policy
None Harsh
High
Costs
Supplier Cost
Travel Supplier Costs Are
Controlled by Travel Policy and
Procurement
So...
Travel Policy
None Harsh
High
Costs
Supplier Cost
Traveler Friction Is The Hidden
Cost of Travel. It’s an HR Issue
Source:...
Travel Policy
None Harsh
High
Costs
Supplier Cost
The Total Trip Cost Is What Matters
Source: Scott Gillespie
• Lost produ...
Travel Policy
None Harsh
High
Costs
Supplier Cost
So We Must Measure Human Costs To Find
The Lowest Total Cost and Optimal...
Travel Policy
None Harsh
High
Costs
Supplier Cost
If Human Costs are high, then the
optimal travel policy is lighter
Sourc...
Travel Policy
None Harsh
High
Costs
Supplier Cost
If Human Costs are low, then the
optimal policy is harsher
Source: Scott...
Listening
for
Traveler Friction
Is this the best we can do?
Traveler Complaints
Business
Leaders’ Complaints
Companies
spend about
the same on
travel as they
do on
turnover:
1-3%
of revenues
Source: “Retention of KeyTalent and the ...
HR has lots of good metrics
Turnover Rate
Cost per Hire
Sick Days
Healthcare Costs
Productivity Metrics
Engagement Scores
...
Measuring
HR costs
travel-related
is a
New
Frontier
Traditional travel metrics don’t work
6 trips between
San Francisco and
Seattle
Higher Trip Friction
$24,000 buys 12 round...
Trip Friction™ measures
what matters
6-hour non-stop in
Business Class,
arriving home on
Friday afternoon,
after 2 nights ...
10 Firms in tClara’s 2013Trip Friction
Benchmark Study
By Industry
HighTech 5 firms
Consulting3 firms
Financial 1 firm
Man...
27
44%
27%
10%
19%
WorkTime 8a-
6p, M-F
HomeTime 6p-
10p, 6a-8a M-F
SleepTime 10p-
6a, M-F
WeekendTime
Sa-Su
When DoTravel...
28
44%
27%
10%
19%
WorkTime 8a-
6p, M-F
HomeTime 6p-
10p, 6a-8a M-F
SleepTime 10p-
6a, M-F
WeekendTime
Sa-Su
When DoTravel...
Distribution ofTrip Scores
42% are HarderTrips
27%
31%
20%
11%
4% 3% 2% 3%
Easy Moderate Fairly Hard Hard Very Hard Fairly...
Companies should understand their travel
requirements from the traveler’s perspective
Does your program have too much traveler
friction? Some is controllable, much is not
Our Firm’s
Trip Friction
score is in
...
Travel Policy
None Harsh
High
Costs
Supplier Cost
Goal: Reduce High-cost, Controllable
Traveler Friction
Source: Scott Gil...
Trip Friction™ shows which
travelers truly travel the hardest
Illustrative
Trip Friction can be a basis
for tiered travel policies
Rank by Trip
Friction
Points
Traveler
Traveler's
Trip
Friction
Poi...
Scott@tclara.com
Glad to connect on LinkedIn
30.3.2014FBTA | Esityksen / esittäjän nimi 3
Identify those travelers who are
clearly “high friction”
Illustrative
A: Build a
Trip Friction
Fact Base
Metrics
Turnover
Engagement Scores
Health Costs
Sales
Productivity
Customer Satisfactio...
A: Build a
Trip Friction
Fact Base
Metrics
Turnover
Engagement Scores
Health Costs
Sales
Productivity
Customer Satisfactio...
30.3.2014 3
Metrics
Turnover
Engagement Scores
Health Costs
Sales
Productivity
Customer Satisfaction
High Friction
Travele...
Example:Trip Friction Demand
Management Strategy
Top Travelers
By
Spend
Top Travelers
By
Friction
High
Spend
High
Friction
Trip Friction Demand
Management Strategy
Set a goal of
reducing Spend
and Friction
among this
gro...
High
Spend
High
Friction
Tailor interventions for this key group of travelers
Less
Travel
Easier
Travel
$$Recognition
Supp...
Traveler's
Rank
Traveler
Name or ID
Trip Friction
Points, 12
Month Total
Percentile
Rank, Our
Firm
Percentile
Rank, All
Fi...
8.1
10.9
6
7
8
9
10
11
12
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
TripFrictionIntensityScore
Trip Friction Intensi...
Metrics
Turnover
Engagement Scores
Health Costs
Sales
Productivity
Customer Satisfaction
High Friction
Travelers
+9%
-11%
...
UseTrip Friction to deliver new
value to your business
2.6%
LowerTurnover
High Scores Low Scores
Stronger
Engagement
Lower...
In Summary
• ManagedTravel 1.0 has peaked
• We need ships, not castles
• Traveler friction is a new frontier
• Find out if...
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Why Trip Friction matters, and how to use it

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Trip Friction is tClara's method for measuring traveler wear and tear. Too much travel can cause significant HR-related costs. Learn more about Trip Friction and how to use it to deliver more value to travelers, travel programs and their businesses.

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Why Trip Friction matters, and how to use it

  1. 1. Travel Data Made Brighter A Gillespie+DiioVenture WhyTrip Friction™ Matters And HowTo Use It March, 2014 tClara andTrip Friction are trademarks of tClara LLC © tClara 2014
  2. 2. Scott Gillespie • Co-founder of tClara, a travel data analytics firm focusing onTrip FrictionTM • Speaker and writer on innovation and best practices in managed travel • Founder and former CEO ofTravel Analytics, a pioneer in airline sourcing • Author of a U.S. patent on airline contract analysis • MBA, University of Chicago 30.3.2014 2 Managing Partner, tClara Author, Gillespie’s Guide toTravel+Procurement Pushing the corporate travel industry to think new thoughts and create more value
  3. 3. Little change in 100 years 3/30/2014 3Gillespie’s Guide to Travel+Procurement
  4. 4. Where we’re headed Discuss and Debate Engaging the Business Traveler Friction We Need New Frontiers Managed Travel 1.0 Has Peaked
  5. 5. • 1994: Delta Air Lines caps commissions, triggers TMC transaction fees and cost center mentality • Late 90’s: Strategic sourcing, corporate online booking tools and Prism put travel management in spotlight • 2007: UK’s Corporate Manslaughter Act makes duty of care a high priority Key Drivers of ManagedTravel 1.0
  6. 6.  ConsolidateTMCs  ConsolidateT&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 ManagedTravel 1.0 are well known
  7. 7. ManagedTravel 1.0 has reached diminishing returns 3/30/2014 7Gillespie’s Guide toTravel+Procurement 1995 2015 High > Incremental Value Low The castles have been built
  8. 8. Solid, safe, enduring – a valuable base Immobile, inflexible
  9. 9. value 3/30/2014 9Gillespie’s Guide toTravel+Procurement it’s time new sources to find of
  10. 10. 3/30/2014 1 not Castles Ships We need
  11. 11. Where are the new frontiers? 3/30/2014 1Gillespie’s Guide toTravel+Procurement Traveler Friction
  12. 12. How do we optimize a travel program?
  13. 13. Travel Program KPIs Spend Savings Prices Variances Finance, Procurement Policy Compliance Traveler Satisfaction. TravelersOperations Agent Productivity Call Service Quality
  14. 14. Travel Policy None Harsh High Costs Supplier Cost Travel Supplier Costs Are Controlled by Travel Policy and Procurement Source: Scott Gillespie
  15. 15. Travel Policy None Harsh High Costs Supplier Cost Traveler Friction Is The Hidden Cost of Travel. It’s an HR Issue Source: Scott Gillespie Human Cost, or Traveler Friction • Lost productivity • Reluctance to travel • Negative impacts on recruiting & retention •Traveler health issues
  16. 16. Travel Policy None Harsh High Costs Supplier Cost The Total Trip Cost Is What Matters Source: Scott Gillespie • Lost productivity • Reluctance to travel • Negative impacts on recruiting & retention •Traveler health issues TotalTrip Cost SupplierCost + Human Cost =TotalTrip Cost Human Cost, or Traveler Friction
  17. 17. Travel Policy None Harsh High Costs Supplier Cost So We Must Measure Human Costs To Find The Lowest Total Cost and Optimal Policy Source: Scott Gillespie • Essential • Not well understood TotalTrip Cost Human Cost, or Traveler Friction
  18. 18. Travel Policy None Harsh High Costs Supplier Cost If Human Costs are high, then the optimal travel policy is lighter Source: Scott Gillespie Total Trip Cost Human Cost, or Traveler Friction
  19. 19. Travel Policy None Harsh High Costs Supplier Cost If Human Costs are low, then the optimal policy is harsher Source: Scott Gillespie TotalTrip Cost Human Cost, or Traveler Friction
  20. 20. Listening for Traveler Friction Is this the best we can do? Traveler Complaints Business Leaders’ Complaints
  21. 21. Companies spend about the same on travel as they do on turnover: 1-3% of revenues Source: “Retention of KeyTalent and the Role of Rewards”, Scott, Hay Group, June 2012. tClara analysis
  22. 22. HR has lots of good metrics Turnover Rate Cost per Hire Sick Days Healthcare Costs Productivity Metrics Engagement Scores Performance Ratings Employee Potential Ratings
  23. 23. Measuring HR costs travel-related is a New Frontier
  24. 24. Traditional travel metrics don’t work 6 trips between San Francisco and Seattle Higher Trip Friction $24,000 buys 12 round trips between L.A. and San Francisco in coach 6 trips between Phoenix and Frankfurt $24,000 buys one first class ticket, NYC to Sydney 6,000 miles flown between D.C. and NYC in a quarter (15 trips) 6,000 miles flown between D.C. and Seattle, one trip Trips? Spend? Miles? or or or
  25. 25. Trip Friction™ measures what matters 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 900 Points
  26. 26. 10 Firms in tClara’s 2013Trip Friction Benchmark Study By Industry HighTech 5 firms Consulting3 firms Financial 1 firm Manufacture 1 firm By Annual Air Spend (USD) $1<10MM 2 firms $10<25MM 5 firms $25<50MM 1 firms $50+MM 2 firms Avg. Annual Air Spend, USA POS $36MM
  27. 27. 27 44% 27% 10% 19% WorkTime 8a- 6p, M-F HomeTime 6p- 10p, 6a-8a M-F SleepTime 10p- 6a, M-F WeekendTime Sa-Su When DoTravelers Fly? Share ofTotal Flight Hours 56% on PersonalTime Source: tClara’s 2013Trip Friction Benchmark study
  28. 28. 28 44% 27% 10% 19% WorkTime 8a- 6p, M-F HomeTime 6p- 10p, 6a-8a M-F SleepTime 10p- 6a, M-F WeekendTime Sa-Su When DoTravelers Fly? Share ofTotal Flight Hours 56% on PersonalTime Source: tClara’s 2013Trip Friction Benchmark study
  29. 29. Distribution ofTrip Scores 42% are HarderTrips 27% 31% 20% 11% 4% 3% 2% 3% Easy Moderate Fairly Hard Hard Very Hard Fairly Extreme Extreme Very Extreme Source: tClara’s 2013Trip Friction Benchmark study
  30. 30. Companies should understand their travel requirements from the traveler’s perspective
  31. 31. Does your program have too much traveler friction? Some is controllable, much is not Our Firm’s Trip Friction score is in the 87th percentile. That’s not great.
  32. 32. Travel Policy None Harsh High Costs Supplier Cost Goal: Reduce High-cost, Controllable Traveler Friction Source: Scott Gillespie Traveler Friction
  33. 33. Trip Friction™ shows which travelers truly travel the hardest Illustrative
  34. 34. Trip Friction can be a basis for tiered travel policies Rank by Trip Friction Points Traveler Traveler's Trip Friction Points for 2013 Traveler's Percentile Among All Firms in 2013 1 Veera 22,560 96% 2 Riku 21,730 95% 3 Johanna 21,690 95% 4 Juho 20,370 95% 5 Lida 18,650 92% 6 Sami 18,120 92% 7 Jenni 17,600 88% 8 Teemu 17,360 88% 9 Sonja 16,920 84% 10 Oskar 16,840 84% “18,000 points, or the 85th percentile” Use industry-wide percentiles
  35. 35. Scott@tclara.com Glad to connect on LinkedIn 30.3.2014FBTA | Esityksen / esittäjän nimi 3
  36. 36. Identify those travelers who are clearly “high friction” Illustrative
  37. 37. A: Build a Trip Friction Fact Base Metrics Turnover Engagement Scores Health Costs Sales Productivity Customer Satisfaction High Friction Travelers +9% -11% +7% -12% -8% +15% Q: Does HighTrip Friction Matter toYour Business? HR Business
  38. 38. A: Build a Trip Friction Fact Base Metrics Turnover Engagement Scores Health Costs Sales Productivity Customer Satisfaction High Friction Travelers +9% -11% +7% -12% -8% +15% Q: Does HighTrip Friction Matter toYour Business? HR Business Then test for differences
  39. 39. 30.3.2014 3 Metrics Turnover Engagement Scores Health Costs Sales Productivity Customer Satisfaction High Friction Travelers +9% -11% +7% -12% -8% +15% Q: Does HighTrip Friction Matter toYour Business? Develop Mitigation Strategies Quarterly Monitoring
  40. 40. Example:Trip Friction Demand Management Strategy Top Travelers By Spend Top Travelers By Friction
  41. 41. High Spend High Friction Trip Friction Demand Management Strategy Set a goal of reducing Spend and Friction among this group • These high-value employees are likely at some risk of burnout or attrition • Easy to identify and engage – Some will not want or need help – Some will not be able to reduce their travel – Some will be grateful for the support • Use benchmarks to help set goals • Easy to measure results • Helps build valuable relationships with HR and Business Leaders
  42. 42. High Spend High Friction Tailor interventions for this key group of travelers Less Travel Easier Travel $$Recognition Support, Counseling Trip Friction Demand Management Strategy
  43. 43. Traveler's Rank Traveler Name or ID Trip Friction Points, 12 Month Total Percentile Rank, Our Firm Percentile Rank, All Firms Q1 Q2 Q3 Q4 Trend, Last 6 Months 1 Jori 22,560 96% 89% 2 Jana 21,730 95% 88% 3 Jamie 21,690 95% 88% 4 Jon 20,370 95% 88% 5 Jerry 18,650 92% 85% 6 Jayesh 18,120 92% 85% 7 Jules 17,600 88% 81% 8 Jhana 17,360 88% 81% 9 Jim 16,920 84% 77% 10 Jesper 16,840 84% 77% Traveler's Trip Friction Points AnnualTraveler Ranking and Quarterly Friction Track traveler progress internally and against benchmarks
  44. 44. 8.1 10.9 6 7 8 9 10 11 12 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TripFrictionIntensityScore Trip Friction IntensityTrends Benchmark Our Firm Monitor your entire program’s friction footprint against the benchmark
  45. 45. Metrics Turnover Engagement Scores Health Costs Sales Productivity Customer Satisfaction High Friction Travelers +9% -11% +7% -12% -8% +15% Add these metrics to your travel program’s KPIs
  46. 46. UseTrip Friction to deliver new value to your business 2.6% LowerTurnover High Scores Low Scores Stronger Engagement LowerTotal Cost of Travel
  47. 47. In Summary • ManagedTravel 1.0 has peaked • We need ships, not castles • Traveler friction is a new frontier • Find out if traveler friction matters in your firm • Add new business metrics to travel program KPIs • UseTrip Friction™ to deliver new value to your firm Thank you! Scott Gillespie scott@tclara.com Follow “Gillespie’s Guide to Travel+Procurement” Glad to connect on LinkedIn

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