Buyers Bear Down

<B>Buyers Bear Down</B>
<I>Last In A Five-Part Series On Online Adoption</I>

By Jay Campbell

"Culture change just isn't everyone's bag."

That's how one expert on corporate online booking adoption explained the reality of woefully low adoption rates by corporate users of online booking tools.

Indeed, it is a tougher task to get travelers to use such products than it is to buy them in the first place.

Established U.S.-based booking vendors now are reporting average online adoption rates of 5 percent to 18 percent, with Sabre reporting market leader GetThere's second-quarter rate of 10 percent.

While the flailing economy is boosting some corporate usage of online tools, it is clear that the four individuals profiled in this series were atypical. What these profilees all had in common was a clear sense of strategy, internal empowerment and good timing.

"The important thing here is not what we think, but getting the message out to all those travel managers who believe a 10 percent to 25 percent adoption is okay because it's what everyone else is getting," said Doreen Baca, director of corporate travel services at Gateway Inc. in San Diego. "This is work, and it takes a lot of planning to achieve success."

Make no mistake, travel managers do not bear all the responsibility. As with any project, senior management support is a must. The bright side of the current economic environment appears to be that many in the executive suite are starting to take notice.

"For the first time, I am now getting calls directly from CFOs, CEOs and presidents who are asking me, 'What should we do?' " said Gadi Maier, president of GetThere. "The move to mandates is fueling extraordinary savings, the technology has truly come of age and the economy is driving right behind it. Now, it's not 'if' on the technology, but 'How do we get adoption higher?' "

While in a certain sense it is the easiest tactic to increase adoption, even mandating can be complicated. Implemented by such high-profile companies as General Electric, Microsoft and Oracle, online booking mandates can get the job done quickly--perhaps too quickly.

"Jumping from an adoption rate in the teens to a 70 percent or 80 percent level can be a nightmare to implement and support, resulting in irreparable harm to overall traveler and travel arranger acceptance," wrote Belmont, Calif.-based consultant Norm Rose in his updated Corporate Self-Booking Tools: An Analytical Study (see story, page 50).

A smoother strategy is to start with a particular business unit or type of trip--such as "domestic" or certain city pairs--for a mandate to self-book travel.

According to Patrick O'Halleran, formerly a travel manager with Honeywell and now a director of interactive travel at American Express, this gradual approach to mandates is most prevalent. "When you go gradually, the opportunity to get buy-in from users is greater," said O'Halleran. "With a full-blown mandate, you get swarmed with calls and questions, and you have a kick back against it."

Peter Harrison, head of GetThere's adoption consulting unit, cited the example of Islandia, N.Y.-based Computer Associates. Midway through 2000, Computer Associates mandated the tool for a large annual conference. After that succeeded, the company moved the mandate to simple roundtrips and, later, to all domestic travel. Now it reports 65 percent adoption, Harrison said.

"Mandates overall are a very positive development, but the implementation of the mandate requires careful planning and execution," added Rose. "A simple mandate, in fact, may cause more resentment from the traveler population and, in some cases, it could even create an underground resistance movement to fight the corporate rule."

According to a survey of 34 of GetThere's 100 highest-adopting accounts, which GetThere will send to clients this week, 27 percent of clients now use a mandate but another 45 percent plan to have one in place this year.

Another approach--which can and, some say, should take place alongside a mandate--involves making the cost of bookings visible to travelers and budget heads through chargebacks. In this scenario, travelers and/or departments must expense the agency fee, which is tiered based on the level of human interaction. Some vendors, including American Express, facilitate the charging of these fees to individual corporate cards. In that scenario, O'Halleran pointed out, "it will be hard for travelers to ignore the variance." This examination of the cost savings ties in with the business case travel managers make to senior management for the initial purchase of corporate online booking software.

"Number one, the system has to have some return on investment for the company, and to quantify that, you have to renegotiate your agency contract and make sure you have a descending rate on the percentage of bookings coming through," said Cindy Heston, manager of worldwide corporate travel at Thomson Multimedia in Indianapolis. "Even the users understand that, when you guarantee a certain return."

The establishment of dedicated e-fulfillment centers by many of the largest travel management companies is helping to reduce the cost of processing online bookings, allowing these vendors to automate quality control and file finishing and provide more flexibility for tiered transaction pricing.

Among GetThere's 34 respondents, which ranged from $5 million to $450 million and averaged $60 million in U.S.-booked air volume, 73 percent said they had established tiered transaction fees and, on average, online bookings were 46 percent lower than offline bookings. Also, in terms of savings, GetThere said 78 percent of the study's participants reported an average of 17 percent lower airfares when booked online.

While mandates and charge-backs are designed to push adoption beyond the initial stages, Harrison said that for young programs, "You definitely need to hand-hold travel arrangers and communicate with frequent flyers after getting your execs involved." This can be targeted as well, according to American Express, perhaps focusing on frequent travelers to repeat destinations, travel to top U.S. cities, tech-savvy employees and/or travel arrangers.

Companies that implemented a special focus on travel arrangers--for example, training travel arrangers first before rolling it out to the general travel population--represented 54 percent of GetThere's 34 surveyed customers. Another 38 percent plan a similar focus by year-end.

For some, particularly less technology-oriented companies, training and education also are key. "Showing travel arrangers and users the how-to part of making a reservation establishes a foundation for usage growth," according to a paper by Amex's Interactive Travel Group. "Ask your vendor about training options, for instance, in-house sessions or Web-based programs. Post FAQs, system guides and corporate guidelines on your intranet."

Worldspan suggested "brown bag" sessions in order to familiarize travelers with the system, and help desks for in-process assistance.

Bob Lichtman, a partner in Incline Village, Nev.-based Corporate Solutions Group, also noted the importance of ease of use and service. "Make certain that system log on/registration is easy and trouble-free, routinely check the system for speed and integrity and offer internal help desk support if possible," Lichtman said. "Moreover, work with the agents so they solicit use of the system, educate the agents on the potential savings to the client and make certain they convey a positive attitude on the system."

Then there are incentives. At Thomson, Heston skipped the sweepstakes, loyalty points and vacations and went straight for the cash. "Since we had sold it on return to the company, the human resources department supported a financial incentive for secretaries and administrators," she said. "During the first quarter in place, they shared in the savings as the company did. The following quarter, online booking was a requirement and they were some of our biggest supporters."

Thomson's administrators already had been trained on the product, which, at the time, was Worldspan's Trip Manager, and were informed that, "If the group as a whole didn't reach its target, they wouldn't get a dime," said Heston. She also recommended "making friends with the IT department."

Though they are a commonly suggested adoption tactic, not everybody agrees that incentives work well. "Incentives are one of the least-effective things you can do," said GetThere's Harrison. "In general, they are hard to put together and hard to get approved. Plus, while they seem to spike adoption rates, there is not as much of a lasting impact, but there are exceptions."

Other vendors, however, did advocate the use of incentives. American Express suggested gift certificates and free lunches and Worldspan noted that these rewards particularly are useful in the early stages of implementation. In general, open communication--with agents, travelers and senior management--often is behind the best adoption rates.

Even after the rollout, travel managers should show these parties the results using the reporting tools many booking vendors provide. Lichtman suggested that messages should be brief, detailed and frequent. Online booking still is a relatively new process, so user feedback also is invaluable.

The most successful implementations always will feature a serious commitment by the travel manager and the company. Perhaps that, too, takes a little financial reward. Worldspan even suggested the corporate travel manager's own pay and bonuses could be based on online adoption.