<B> Group Program Proves ROI</B>
<I>Managing Meetings At: National Life Of Vermont</I>
By Chris Davis
One year after an efficiency evaluation forced National Life of Vermont to justify the bottom line worth of its centralized meetings program--and saved the program from being outsourced--director of travel and conferences Lynn Averill has an agenda of ideas left over that she plans to institute in 1999.
Averill credited the six-month Efficiency Improvement Process study conducted by National Life with focusing senior management on reducing meeting program costs. As a result, her department--now two staffers leaner than it was before the company-wide audit--is working toward insourcing all meetings-related travel reservations, as well as negotiating volume-based meetings contracts with hotel and air suppliers.
The largest potential change in Averill's plan is the insourcing of all group air travel bookings, which until now have been handled by Accent Travel, a Williston, Vt.-based Carlson Wagonlit affiliate. National Life already has insourced all transient air travel, and Averill said the planners in her department will be trained to handle the rest.
"There are three of us remaining who are going to be trained to book air," she said. "We're also going to see if it makes any sense for us to at some point be able to support our transient travel reservationist from here, since we have no backup. We'll get trained on the system and see what happens."
Averill said the department, which plans all of National Life's meetings, also is planning to limit the number of preferred airlines from which employees traveling to meetings can choose.
"We let our travelers use whichever they want, basically," she said. "But the airlines are very interested in volume, so we're seriously looking at requiring booking through the airlines where we have most of our volume and dropping one or two others."
United Airlines and US Airways service the nearest airport to National Life's Montpelier headquarters, in Burlington, Vt. National Life's annuity subsidiary, Life Insurance Company of the Southwest, is based in Dallas, making American Airlines a player in the department's airline plans as well. Using other airlines beyond those three "doesn't make much sense," Averill said.
Averill also is trying to have as much of the company's annual meeting schedule set at the beginning of the year as is humanly possible, for added benefits in leveraging hotel volume. "The more volume you can deliver to a hotel chain at one time, the better," she said. "We've been looking at the whole year, and deciding up front how many of these we should negotiate with each hotel chain. It makes a big difference if you present each chain with five or six meetings, rather than one at a time."
She credits senior management with throwing its support behind her program following the Efficiency Improvement Process study last year. Company executives now are more aware of the possibilities of reducing their meeting costs by accessing the negotiated rates the travel and conferences department is leveraging--and more amenable to taking the time now to plan for 1999.
"We went to management with that as one of our ideas, and they were willing. Now we get a lot more information up front," she said.
All in all, there's been a lot of change at National Life since last year, when the very future of the internal meetings department was in doubt--and Averill had to prove that the department was worth keeping at all. When the outside auditors who consulted on the project placed no monetary value on negotiations or relationships, Averill proved that the group's professional negotiating ability and relationships with suppliers saved the company hundreds of thousands of dollars.
"As I went through the process, it was important that management knew that our department had some expertise and that we do save the company money," she said. "After every negotiation with a hotel or an airline for a conference, I outlined exactly what the savings were--what the initial room rate was, what we finally ended up with, for example--for every piece of the contract. We found hundreds of thousands of dollars that we saved the company a year. And there was no commission that we had to pay to an incentive house."
While it's difficult to put a dollar amount on supplier relationships, Averill also highlighted the advantages that 25 years of planning experience have given her. "Our auditing department did not want to put a value on relationships, but they are so critical in this business, even beyond contract negotiations," she said.
"Our chairman and president just needed two rooms for one night in New York City in December. Get real, right? But I have a relationship with a hotel there and we got them in. They have a six-night minimum stay at $370 per night. These are the types of things that you can't attach a dollar amount to, but management has to understand that these things are important."
Averill documented how National Life saved money through waived hotel attrition and cancellation penalties and reductions in the amount of necessary deposits all because of the department's relationships with its suppliers.
The key to convincing management of the planner's value, Averill said, is regularly supporting your claim with hard financial evidence. "I report any negotiations we do to my boss every quarter," she said. "You can document all you want, but you have to make management aware while it's happening."
Even though the travel and conference department survived the efficiency evaluation, Averill is planning to continue to increase the savings the department provides to National Life.
Averill's department plans about 100 meetings a year, mostly sales and training seminars, including a number held onsite. Though its group travel program isn't massive, the lessons Averill learned through the evaluation process can serve any corporate planner well.
"When you're forced to look at how you do business, you ask, 'Why do we do this?' And suddenly efficiencies come to light," she said. "The big message from management was that if there was any way to generate revenue, no matter how much, do it. So we changed the way we do business."
Though the efficiency evaluation--which led to an approximate 20 percent reduction in National Life's workforce--was completed a year ago, and though the department's changes were developed during a stressful time financially, Averill said the department has no plans to change its cost cutting methods as the economic picture improves.
"In all businesses, everywhere, somebody's downsizing or laying off staff," she said. "We don't want to have to go through this again.