Unilever Sources for Traveler Satisfaction

Unilever's Yvonne Moya does not sit in procurement. As the director of global travel, event and fleet services, she reports to Unilever's CFO function through the company's Workplace organization. Still, she partners closely with procurement to deliver an effective travel program.

The program looked best-in-class on paper. "We had ticked all boxes, like in the schoolbook" she said, reciting a list of procurement best practices: "We had consolidated the program with the TMC, hotels and airlines. We were negotiating with all of our suppliers to make sure we had the best deals." Yet there remained a lack of traveler engagement with the program that Moya wanted to change.

"We needed to look at [the travel program] within the evolving consumer environment, not just from a travel perspective," she said. "Unilever is a consumer products company. We want to be faster to the market, be tech savvy, personalize to the customer. When we looked at the program from that perspective, we came back with an interesting analysis."

Moya's travel management team and procurement counterparts uncovered deficiencies on several fronts. There was lack of awareness around the travel program, a dense and repetitive travel policy and a weak communications strategy.

On the supply side, the service configuration at the travel management company was outdated, with expensive agency implants in some of Unilever's 90 markets. Global travel manager Kristian Collard pegged hotel leakage at 50 percent, while global category leader for indirect procurement Philipp Brunner said expense report analysis showed off-channel hotel bookings often realized savings against negotiated rates.

Even as traveler satisfaction and engagement motivated Moya, Unilever's zero-based budgeting demanded savings to justify initiatives. As a result, traveler-friendly technology solutions also had to be budget friendly, and innovative procurement strategies would be critical.

Getting Travelers' Attention

In any effort to drive traveler experience, getting travelers' attention has to come first. "We had no brand and very little awareness around who we were as team and what we could offer," she said. "So that's where we started. We had to work more as a marketing company and not as travel managers."

That meant interacting with travelers in formats they liked and in locations they frequented. Which meant looking at the 28-page travel policy, cutting it to the bone and reintroducing it with a lighter tone and a visual presentation. Which meant booting up an internal social media tool and nurturing engagement with frequent communications.

"It was super frustrating," said Moya. The learning curve was steep. "We had 10 people in this social media group—ourselves. It took us over half a year to learn and to constantly bang the drum and know how to post, how much, what is too much, what is too little." After a year, however, social media followers numbered 16,000 employees who travel regularly and travel arrangers.

"We now have posters and other communications vehicles," said Moya. "We push out short messages on social media." Above all, she said, people want simple, short messaging and the relevance has to be clear. "They want to know immediately, 'What's in it for me?'" Understanding how to answer that question laid the foundation for effective supply-side changes.

Turning to Tech at the TMC

While Unilever consolidated its agency business with HRG years ago, the company still had implants: three in the U.K., more in the Netherlands and others dotting Europe. In addition to taking up valuable Unilever real estate, implants equal "a fixed fee regardless of whether we used the service or not," said Collard, who noted that Unilever travel volume had dropped, by design, over the years. "We needed a transaction-fee model, and we needed better technology solutions."

That's easy to say but challenging to deliver for Unilever travelers, who speak multitudes of languages and have been accustomed to agents with local knowledge. Moya wanted a system that not only maintained these nuances but also reduced costs, extended calling hours and offered multichannel communication that included a chat option. "I've seen other companies consolidate into physical hubs," she said. "We didn't need to physically locate everything. There had to be a more clever way to keep costs down, keep the local nuances and keep local ticketing. So I challenged HRG with that."

HRG returned to Moya with what Unilever now calls its V-Hub, or Virtual Hub, model. "We proposed a hub in each region [with] a virtual network of agents connected to those hubs," said Alex Singleton, who leads key client relationships at HRG. The virtual team is not limited to taking inquiries from a particular location and is not limited to a particular GDS. In addition, the technology routes inquiries to the best hub available, depending on origination point. If an agent who speaks the local language is available, the inquiry is routed there. If not, it is routed to an English speaker.

Sometimes, the routing is based on cost considerations, said Moya. "For example, Switzerland was expensive operationally. If I sit in Switzerland, I have a Swiss number to call but now I end up in the U.K." When the rollout is complete—Unilever started in Europe, prioritizing the U.K. and the Netherlands due to the number of implants, and North America will be next—HRG will support Unilever travelers with 24/7 global connectivity on a communications platform that integrates telephone, email and webchat capabilities. Moya is quick to point out that it's not chatbot technology, but she's got her eye on those developments.

The rollout has been a huge success, said Collard, noting an impressive "don't quote me on this" savings number from just one of the European offices. From a traveler experience perspective, he said, it's a no-news-is-good-news situation. "With service changes like this, you always have to measure it on the negative side of things. We've not had any negative feedback, so that's very good."

Traveler-Friendly Hotel Program

As at many companies, Unilever's hotel program formed a particular weak spot. "The program was too limited," Collard said. "We were telling travelers, 'You've only got this hotel or these in the program,' but [the properties] didn't fit with what the traveler needed. Or, they felt the choices were too expensive for their budgets. That drove a lot of people to book outside the program."

Brunner said: "Through expense data, we saw the noncompliant hotel spend and cross-referenced that data with the preferred channel. When people shopped and booked outside [the preferred channel], they were spending less money." Plus, said Moya, "Our road warriors in the U.S., Brazil and Germany don't want to go to the Hiltons [and] InterContinentals of the world. They want to go to the bed-and-breakfasts and the guesthouses in India."

Taking those findings as the impetus for a new strategy, Moya, Brunner and their teams determined that providing a combination of more choice and less direction could drive savings. But how would Unilever provide choice without diluting volume with preferred suppliers? Did TMC hotel content cast a wide enough net to expand hotel choice in a meaningful way? If not, it remained an imperative for the hotel program to drive all bookings through the TMC to ensure duty of care, service benefits and disruption support for Unilever travelers. "Unilever's strategy is to go through the TMC," said Moya. "We had to find a way to expand choice without opening the booking channel."

Sourcing for Choice

Moya turned to HRS to explore a potential partnership. The self-described hotel solutions provider fills a niche in the corporate travel industry: a hotel content aggregator for corporates looking for hotel inventory not provided in global distribution platforms that also operates as an umbrella brand and distribution partner for independent hotels. It provides sourcing solutions for corporate clients and has incorporated payment functions and personalization apps as enhancements. Unilever has worked with HRS in Germany for years, but the provider's expanded global strategy and capability to integrate aggregated hotel content into GDSs spurred Moya to look into a deeper relationship.

"It was not just a portal," she said. "HRS now acts as a hotel chain within the GDS. They seed rates and content for their hotel partners. We found that very interesting because the GDS content was really lacking but HRS could offer all these additional properties without leaving the TMC environment."

Content by itself does not make for a successful procurement strategy; you have to look at rate, location, the services the property is able to deliver. That said, the Unilever team knew its negotiated rates weren't necessarily delivering the best value. "The market has become so dynamic with hotels changing the prices frequently and implementing very sophisticated yield management strategies," Moya said. "In most markets, the best buy [on a given day] is pretty good," but major markets were a different story. "In the Londons, New Yorks and Singapores of the world, the negotiated rate is best."

Unilever landed on a hybrid solution. Going against conventional procurement best practices, it broadened the selection of preferred hotels in its top 30 markets and opted out of last room availability there. While Unilever strongly encourages travelers to use preferred hotels in these markets, it's not required. Instead, those booking outside preferred properties must abide by a Unilever rate cap assigned to the city or country, and travelers must book through the TMC or online booking tool. HRS estimated it has opened up 75,000 to 80,000 more properties to Unilever travelers on a global basis to support the new strategy. According to managing director corporate solutions in the headquarters region Dirk Schmidt, it wasn't just about that volume. "Unilever did their research... to prove we could deliver the value," he said.

That kind of research was critical to success, since Unilever didn't pilot the program to test the strategy. Rather, the company modeled a lot of data, Brunner said. "We had consolidated agency data from HRG. HRS was able to deliver data from their hotel [partners]. And, of course we had the expense management data. With in-depth analysis, we built the scenarios. ... The data determined where we pursued preferred agreements, how we structured negotiations for hotel chain deals, and the rate caps. It was critical to model these scenarios to show that we were minimizing risk." Early numbers showed leakage rates already are declining, and Moya expects that to continue now that new rates and preffereds were loaded in January.

The Broader Trend

"We needed to listen to our travelers and deliver a next-generation program," said Moya. Unilever's program already had moved away from a "price, price, price" strategy, but Moya underscored that realizing efficiencies for the company doesn't have to mean trouble for travelers.

According to HRG's Singleton, Unilever is not unique in its efforts to identify creative sourcing strategies that will support traveler-friendly services. "A number of HRG clients are looking at these strategies, but you have to have trust in your travelers and want to give them the ability to control their decisions," he said. "Unilever made the bold decision to take action."

HRS's Schmidt agreed. "Many companies think, 'If I procure more, I control more,' but it's easy to over-procure. The innovation at Unilever is that they found a way to let go of that tendency and allow individuals to make travel decisions that are right for the business."

Correction Feb. 28: A previous version of this article stated that Yvonne Moya reported directly to the CFO. Moya reports to the CFO function through Unilever's Workplace organization.