Mary Ellen George
Barely four months after BCD Travel Consulting emerged from BCD Travel's global sales division, the company last month changed the consulting unit's name to Advito and formalized its services to encompass travel management strategy, policy and governance, sourcing and process automation. Management.travelmet with Advito general manager Mary Ellen George to discuss the firm's rationale and the reasons large travel management companies are promoting their consultative services more than ever. An excerpt follows.
Why create a separate division?
One of the things our customers are telling us is that consulting can add a lot of value and they want to be sure they're getting unbiased, neutral service. While we are a BCD Travel operating unit, we felt that this [re-branding] would send a strong message. As BCD Travel Consulting, it was still kind of fuzzy for our customers to understand this is a dedicated team of people. We're staffing up to about 70 people providing consulting, so we think different branding sends the message that we're neutral advisors. Consulting is really emerging as a big opportunity for TMCs, particularly as procurement people are asking a lot of complex questions and looking for benchmarking. While account managers have been able to answer some of those questions, it's getting more complex.
How can a customer feel like it is getting the right advice on choice of TMC or online booking tool when Advito is owned by BCD Travel, and Resx provider TRX is majority-owned by BCD Travel parent BCD Holdings?
Advito is not entering into the TMC area. Credibility is the biggest thing we have to sell for consulting, and we have a 95 percent reengagement rate from our customers, which shows that we truly are not trying to take people down a path of our own interest. Advito is an owned entity of BCD Travel, but similar to the way we launched TRX--where TRX was TTG, then was spun off and started servicing some competitors of [BCD predecessor] WorldTravel, and eventually became its own separate daughter company--that could be the path this takes. The analogy could be that we make it a separate BCD company.
To some extent, this development seems to be a reflection of the changes in the industry's economic models, where ten or 15 years ago, TMCs were paid by vendors and that has shifted to clients. Is this a way for TMCs to still make money when the transactions have become a commodity?
The economics definitely have shifted. With procurement, on the TMC side you see more and more service-level agreements, where a lot of the TMC profit can be generated through performance. Procurement people are willing to pay based on value. Hence, it's sort of the same thing with consulting. "If you can shave x amount off our total cost of trip or cost of stay, then I'm willing to pay you a piece of that." That is where the opportunity is that we're all chasing. It is a traditional consulting model, with an hourly rate where you pay more for senior than junior consultants. Pricing also depends on the scope and needs of each account.
Is there a way that clients can leverage a BCD Travel relationship to get better pricing from Advito?
We're really not playing that game. We're a separate business unit, and I'm charged with making a profit, so if we give it away, it devalues what we're doing and customers will start doubting the value. It's a change for our organization, but it's all about the value you're delivering. If you're going to save them seven digits, they're more than happy to pay a piece of that.
What services are clients most interested in?
Meetings management is still a big savings opportunity. People have been batting it around for a number of years now, and they are finding they do need to engage dedicated resources and figure it out. It's a big opportunity. So now it's really happening, especially in Europe.