Turning the Page on Yesterday's TMC SLAs

“As much use as a chocolate fireguard” is a phrase beloved of older Brits to describe a pointless activity or object—zebra crossings in Italy, for example. Arguably travel management’s most blatant chocolate fireguards, and as anachronistic as the metaphor itself, are service level agreements stipulating how many times a phone may ring before a travel management company must answer it.

Yet phone rings and time taken to answer e-mails, said Guy Snelgar, principal consultant for Sage Travel Consulting, remain SLAs that “you see all the time, even though they are largely meaningless. Me answering the phone and you saying ‘I need to speak to Carol about my booking’ and me saying ‘Well, Carol's not around at the moment, but I'll get her to call you back as soon as she's free,’ has delivered no value to you whatsoever. However, I've ticked my box that I picked up before six rings.”

SLAs of this kind, Snelgar concluded, “are structured to measure the things that are easy to measure, not the things that matter.” 

SLAs are not inherently useless. They just have to be the right ones. Goldspring Consulting partner Will Tate distinguishes between old-school tactical SLAs that set targets for service response and quality standards, and strategic SLAs that “move the program forward.”

Tactical SLAs, said Tate, are “functions where artificial intelligence will be in place—or is already in place—and will become moot because they are fulfilled 100 percent of the time. If you need something simple, AI via phone or chat will return that to you instantly, like ‘I’ve forgotten my hotel booking’ or ‘I’ve lost my invoice, can you send it to me?’”

What, then, do modern SLAs look like? 

Wayne Lappage, the United Kingdom-based global commodity manager travel and expense for Yunex Traffic, takes his inspiration from colleagues sitting in direct procurement. “Their SLAs are far more advanced,” said Lappage. “They aren’t around issue resolution, compliance, price variation, but more about the value that supplier brings to our organization. That's what I want to see my SLA about.”

Tate believes travel managers and their TMCs should have three to five SLAs in place at any one time, swapping in new ones as needed.  “If you set 20, you aren’t going to achieve them,” he said. Instead, “if you achieve an SLA three quarters in a row, there’s no need to keep measuring it,” and it can be replaced.

As for what kind of SLA might move a program forward, Tate gives the simple example of boosting the attachment rate—the percentage of transport bookings where the related accommodation is booked at the same time. Higher attachment rates improve compliance with the program and often save money directly because the traveler has booked earlier. A concerted effort by a TMC to boost attachment might involve measures such as a communications campaign. “It’s super-simple to measure,” said Tate, who believes improvements in almost all aspects of TMC performance are measurable.

Tate goes further, advocating targets for TMC creativity. “Put a condition in requiring three credible improvement ideas every quarter that come at no extra cost,” he said. “If the TMC is wise, it will bring ideas that it can calculate, control and celebrate. If it has a stack of wins like that when it’s time to re-bid, it’s probably going to win.”

Lappage is taking a similar line with his TMC, rating each quarterly business review out of five, with a targeted average score of three across the year. After his first meeting with his account manager, “I went, ‘Look, it's great, but you're telling me what I know,’” said Lappage. “’You're literally just copying and pasting analytics. What I want to see is the so what? The data is telling me this, I recommend you do this, this is the new technology we're bringing in. So for this QBR,  I'm rating you as a three or even a two.’

“Now she's delivered. She's come back and spoken about enhancements with rail technology and possibly changing our rail supplier in the UK. She's pitched other technology to me: good solutions that enable me to go back to the business and say our supplier is being proactive and has hit the nail with this benchmark, and I can see what we need to do for the next 12 months of our programme.”

SLAs can also be about gauging operational performance, but at a much deeper level than measuring communication response times. A critical metric for Lappage is how well the TMC fixes problems that invariably arise, such as system faults or interrupted flow of invoices, leading to delays in expense claims. His SLA requires corrective action within two days and root cause analysis within four.

“They have to come back in four days to say ‘This is what we're going to do to fix it so it doesn't happen again,’” said Lappage. “That's far more valuable than someone saying ‘We've answered the phone in two minutes.’ Fabulous: we've only phoned you three times in the last six months. I feel it's far more meaningful for the TMCs as well, because they're actually showing what they're good at.”

Another important SLA, in the view of Lutz Nauert, senior vice president for global program management at BCD Travel, is traveler satisfaction. “A satisfaction survey or a Net Promoter Score that is asked for immediately after a booking or call gives a much more impactful reflection of service quality,” he said. BCD surveys as standard, but clients can opt out. The response of rate for customers who allow surveys varies from three to seven per cent. BCD also measures the complaint-to-booking ratio.

Nauert added that BCD is considering how to evaluate service provided by its AI tools. It already measures internally how many e-mails can be answered by an automated response from a bot. When a bot offers flight schedule suggestions to a traveler, “how often are they accepted and what’s the impact against the standard average fare?” asked Nauert. “Those statistics are relevant and super-interesting for a client because they speak about the capability to steer traveler behavior.” Nauert believes such metrics also provide evidence of the value delivered by both the TMC and the travel manager.

Lappage has his sights set on exactly what Nauert is talking about. “I would love in my next RFP to target the TMC to utilize AI to really start doing smart recommendations in the online booking tool and handling a lot of the simple tasks,” Lappage said. “If it manages to find a solution, that TMC has delivered massively for me, and that is a huge value proposition. And that's a meaningful discussion that I can have within my business to say ‘This is why we're partnering with this agency. They’ve automated four manual tasks, freeing up time on their side to deliver excellent service and on mine to be more strategic.’”

Lappage has found some TMCs receptive to his SLA proposals, whereas others are a “closed door.” Snelgar warns that refusal by a TMC to back a service claim with a measurable SLA is a red flag. When it comes to more progressive SLAs to improve a travel program, a TMC’s openness to such ideas has arguably become a key selection criterion in its own right. 

“There is some extreme variance in the market right now as to the way that TMCs are approaching this,” said Sage Travel Consulting founder and managing director Carol Randall. “We've recently run a request for proposal and one TMC was outstanding. It had really thought about this and focused upon what the customer actually wanted. But there were others where the responses were quite shockingly awful.”