Buyers Benchmarking, Outsourcing Meetings
During the National Business Travel Association annual convention in Dallas last month, BTN editors discussed how buyers benchmark and outsource meetings with Sheri Bonsall, manager of corporate travel services for the Chubb Group of Insurance Cos.; Terri Carlton, manager of meeting services and corporate travel for BlueCross BlueShield Association; Kari Knoll Kesler, sourcing specialist for travel, meetings and promotions for ING Americas; Joni Miyashiro, travel program manager for Amgen Inc.; and Tracey Wilt, purchasing consultant for travel and meeting services for Xerox Corp.
BTN: Do you benchmark your meetings programs against those of other companies?
Joni Miyashiro: It's very difficult. We try to stay within the pharmaceutical arena, because they have similar types of meetings with high numbers of external participants. It's difficult to benchmark against another company that does not have the same type of meetings and has more internal events. You have to go out on a one-to-one basis and ask drilled-down questions about that company's meetings program. Even within the pharmaceutical industry, there's a lot of variation.
Tracey Wilt: We benchmark wherever we can, but it's hard because everyone uses different metrics for meetings to measure their programs. There are no standards: With airlines, you talk about average ticket price or cost per mile; with hotel, everyone's talking about average daily rate and room nights. You have to use your networking peers in the industry and start talking your way through it.
We're looking more for best practices and what would make sense for our company. We use lots of ways of getting best practices—through suppliers, peers, everything in the news—and I think it makes more sense to look for those best practices and how they can be applied to your company and how they make sense in your environment.
Kari Knoll Kesler: We're just thrilled to get our own data in some sort of good format. To get to the point where you can benchmark with other companies—and this goes back to why it's tough to start sourcing in a traditional model—if you can't even figure out what components you want to measure, and until you can figure out the data components or variables, benchmarking is a challenge. It ends up that the only real benchmark is a baseline: "Last year this meeting cost us this much per attendee," and that's the only metric that we talk about right now. You have to find a way to reduce that.
BTN: Have there been any changes in the levels of outsourcing in your programs?
Terri Carlton: The nature of our company is that we do not outsource. We've been approached a lot of times by various different companies. We conducted a study to see how much it would cost to outsource meetings and do site searches and contract negotiations, and we found that it's cheaper to do it in-house because of the timeframes we have.
A lot is related to legislation: if there's something going on in the government that affects it or we can't have a meeting until something gets cleared. It's very time consuming, and it's easier and less expensive to control it in-house.
Wilt: Actually, the majority of our business is with third-party suppliers. Eighty percent of our planners are admins, and it's not their core job to plan meetings. We have only a few experienced multiple-meeting managers. Part of that is because of core competencies. We're not a meeting planning company, so we should leave it to the subject matter experts to do that on our behalf. We have set up policies. If a contract comes in over a certain dollar amount, we want purchasing to review that contract. We've set what our terms and conditions are for hotel and airline contracts, and they have to work around those guidelines.
BTN: What types of third-party suppliers do you use?
Wilt: We have two suppliers that we source a majority of our meetings to, one that's local and one that's very large.
Sheri Bonsall: We pretty much do everything in-house, with the exception of international or event-based meetings. Then we will use the services of a third-party, like a destination management company. We have only a few of those per year. Aside from that, we'll use in-house resources.
Miyashiro: We use quite a few outsourced partners, despite the fact that we have our own meeting planning and tradeshow organization. We use probably about eight or so meeting planning companies, and there must be about 12 or more medical education companies that are involved in the content of a program. We have huge, extended partner relationships with a lot of players, and that is challenging.
BTN: But you handle all contracting internally?
Miyashiro: Oh yes, so it's co-sourced, if you will. A meetings manager oversees the meeting planning company, which goes onsite to do a lot of the detail and logistical work.
Kesler: All my planners are so involved in their various organizations, and they bring back statistics ad-nauseam about the average cost of this type of meeting. When you talk about sourcing versus outsourcing, I sort of feel like a boxing referee. They all stand around the perimeter and feel drastically opposite about it. I've got people that feel it's the biggest waste of money and that we're being taking advantage of by these companies, so many of which exist and are profitable, so it must be valuable to someone.
On the other side, some fully outsource everything they do, and those planners feel these planners don't know how to plan. It's a very political subject within our company, and I try to remain neutral because I haven't seen any data yet that tells me one answer is right, and it may be a company-dependent decision.
The other funny thing is that from the people on the side who claim that outsourcing to one incentive house is the worst thing that could ever happen, I get five consulting contracts for each one of their meetings, from five different independent consultants and the destination management company. Yet, they don't get that perspective, so I try to give them that perspective.
Part One of this roundtable discussion appeared in the Sept. 8 edition of Business Travel News.