American Express Business Travel and Maritz Travel this week announced plans to pool people, customers, technology and resources for a strategic alliance to provide "end-to-end strategic meetings management services that support a company's entire meeting, event and incentive travel portfolio."
Called MaXvantage, the alliance is to provide centralized sourcing, meeting planning, data analysis, business intelligence, benchmarking, as well as the expertise to "negotiate cost-saving agreements and favorable contract terms." Operational and consulting expertise on all areas of meetings management, including use of virtual technologies as an alternative to or integrated with live meetings, will be part of the service offering.
"We believe that strategic meetings management's time has come," said Maritz Travel president and CEO Christine Duffy. Lacking operations outside North America or the ability to leverage business travel clients--since the sales of its United Kingdom-based business to Grass Roots Group in 2006 and the 2004 sale of Maritz's business travel operations to Carlson Wagonlit Travel--Maritz talked to a familiar partner about ways to extend its reach. For decades, first as McGettigan Partners, Maritz Travel has helped companies consolidate meetings, which "morphed into strategic meetings management. I feel like we have a great solution, developed over a number of years, and a technology platform, but we just did not have the kind of distribution that American Express has," Duffy said.
American Express "really wanted to take our business to the next level," beyond midsize or smaller meetings into "consolidating corporations' large incentive-type meetings," said Hervé Sedky, vice president and general manager of American Express Global Business Partnerships, Advisory Services and Corporate Meetings Solutions. "Maritz has done a remarkable job in this category and really leads the industry in terms of its ability to deliver an extremely strong 'return on experience.' "
The success, Duffy said, is the "ability to support the sales and marketing stakeholders who own the budgets. There hasn't been much in it for them," Duffy said of some meetings consolidation initiatives. "It really is this idea that we can bring the end-to-end solution and redefine strategic meetings management in a broader way that speaks to the cost management, transparency and issues that are critical today to look at meetings as a category, but not lose sight of the individual stakeholders and the reasons that people invest in these in the first place: making sure the participant experience is delivered."
Maritz has focused on selling a "return on experience" model to chief marketing and sales officers, while American Express' "key audience in a strategic meetings management" pitch has been the chief financial or procurement officer, Sedky said. "Bringing both parties together really allows us to leverage the relationships. That's what we mean by saying that yes, we've both been doing it, but with strengths and weaknesses."
In development for the past nine months, MaXvantage is to officially launch in September. But the companies said they are so confident of the plan that they decided to announce it now, before the U.S. Department of Treasury releases guidelinesit promised in January on corporate meetings and incentives for companies that have accepted bailout funds. "While those will be focused on companies that have received taxpayer assistance, we believe that those guidelines are likely to be embraced beyond that, or at least looked at as a best practice for other corporations as well," Duffy said. "There will be a lot more focus about how you manage meetings across an enterprise as a category, as opposed to one-offs. This is consistent with what we've seen in the pharmaceutical industry, and I think we'll now see that embraced by the financial industry," telecommunications and other industries.
The timing also is driven by the heightened focus on the meetings spend category. "In all my meetings with chief financial officers and chief procurement officers, they're really looking for this next realm of savings," Sedky said. "The meetings space is one that has not been as effectively managed as business travel. Now is the perfect opportunity for us to launch an alliance that allows us to really attack this spend category in a way that hasn't been done as effectively as possible. Providing customers with this full transparency, control over the spend category is critical."
The global corporate meetings market is $124 billion, excluding air, or about $76 billion in the United States, Sedky said. Amex reviewed research from various industry sources, including the corporate card industry, PhoCusWright, A.T. Kearney, StarCite and industry associations and "very comfortably believe" the market potential "will be over $100 billion.
"So it is a big, big market," Sedky added. "We do not have good information that tells us how much of this business is currently effectively managed. The best estimates are less than 5 percent. One of the reasons that this is a strategic imperative for American Express is that it's a huge growth opportunity for our company."
In the alliance, American Express "will own the client contracting process, sales process, strategic client management process, while Maritz will focus on the operational and service delivery end," Sedky said. Amex and Maritz will "equally share in the governance" of the alliance. The partners will combine their existing technology, people and even clients for MaXvantage, yet continue to serve any existing nonstrategic meetings management customers. For example, customers would continue to engage Maritz to operate one-off product launches, sales or incentive programs, Duffy said. Some employees will swap employers to support the alliance, which officials have talked about possibly being headquartered in Philadelphia, Duffy said.
"Payment reconciliation and data flow back into a management information system" will be a critical component of any offer," Sedky said. "Being Amex, we will clearly advocate for the Meetings360 platform" that it developed with StarCite, "but at the same time, we won't exclusively use that. We're open to multiple forms of payment."
While the agreement is for North America, both American Express and Maritz said it would allow them to operate global travel and meeting needs of their North American-based clients. Both companies will "leverage the American Express footprint to differentiate ourselves in the marketplace" as few companies can and "offer the same solution with similar type results to our clients on a global basis," Sedky said. The global reach was a key attraction of American Express to Maritz, which sold its European meeting interests several years ago and ended service relationships it had, Duffy said.
A decade ago, American Express and Maritz also announced an alliance on meetings, but Duffy said "that was more of a marketing alliance or sharing of leads" and she questioned "whether there was as much of a commitment around it as there is from MaXvantage." The duo "started these discussions before October, the AIG situation and a lot of the crises in our industry and the downturn in the economy," Duffy added.
Maritz and American Express also work together in a "very successful 12-year-old joint venture," called American Express Incentive Services, said Duffy.
In addition to the core offerings, Sedky said, the alliance will offer as value-adds to its customers any of the special pricing that American Express negotiates on both the card and travel sides or that Maritz negotiates with suppliers.
Most recently, Maritz has negotiated four agreements with virtual technology vendors, Duffy said, as they are increasingly asked to integrate one or more technologies into live meetings, or recommend a solution to replace a live meeting. Last month it announced "Maritz Live," which is "project management wrapped around a virtual event." The technology platforms, project management and consulting expertise will be available to MaXvantage customers, she added.