Lippincott Williams & Wilkins Leverages Sisters' Spend

<B>Lippincott Williams & Wilkins Leverages Sisters' Spend</B>

By Megan Hjermstad

Lippincott Williams & Wilkins, a publisher of medical, nursing and allied health information resources, last year began to look more carefully at controlling travel spend and realized that, by combining spend with its sister companies, it could leverage that combined buying power for better deals.

Prior to the consolidation, Philadelphia-based LW&W was using two or three agencies and was not carefully monitoring whether or not reservations were coming through the corporate agencies. Its parent, Dutch publishing company Wolters Kluwer, had 12 different U.S. divisions using more than 20 agencies in North America, and many travelers were booking with outside agencies or leisure Web sites.

"We were looking at ways to save money and consolidate. Travel was very ripe for that. We identified someone in each company--either an executive or a travel manager--and put together a travel team to create the Wolters Kluwer travel program," said Donn Greenberg, manager of corporate purchasing for LW&W. The team consolidated Wolters Kluwer's estimated $12 million air spend and rebid its agency, airline, hotel and car rental contracts.

Last April, the team sent out a request for proposals for one travel agency in North America to more than 10 agencies, narrowed them down to four finalists and ultimately selected Northwestern Travel Management.

Northwestern Travel Management began implementation of Wolters Kluwer last August, which it completed at the end of third-quarter 2000.

Although one of the Wolters Kluwer subsidiaries had been with Northwestern Travel Management for years, Greenberg initially thought Wolters Kluwer would select a mega agency, such as Rosenbluth International or American Express.

"We were looking for someone that could work with us, and would treat us as a big company and work with our needs. Us going into a Rosenbluth that is handling mega companies would be negative because of our size. We're at a size that we're able to get service at Northwestern Travel Management," Greenberg said. "We've become one of the big fish to them."

Wolters Kluwer now has mandated use of Northwestern Travel Management for all corporate travel. "One of the biggest issues is keeping everyone within the program. Savings in the program is tied to volume. If somebody pulls out, that hinders our deals, so we need to make sure we have compliance measures in place," Greenberg said.

Greenberg said one of the biggest challenges was addressing the unique needs of the different divisions, which have implemented one travel policy that reflects their individual cultures and needs. "Our employee bases are very different," Greenberg said. "Some are more demanding then others. My division travels the most internationally, other divisions might have more meetings and incentives. I don't think Northwestern Travel Management had any idea of the magnitude of the different cultures."

Wolters Kluwer is being serviced out of Northwestern Travel Management's Minneapolis call center, where a dedicated team of eight travel counselors recognize the specific travel needs of each of the 12 divisions. "We have learned to be able to go with the flow and roll with the punches and recognize that everyone's needs are different," said Chad Boeddeker, corporate account manager at Northwestern Travel Management for Wolters Kluwer.

Northwestern Travel Management now is providing consolidated reports and individual reports for each division. Wolters Kluwer receives any commissions and overrides and pays the agency a fee that is tiered-based on Internet-booked reservations, agent-assisted bookings and full-agent reservations.

Concurrent with the agency transition, Wolters Kluwer rolled out Worldspan's TripManager and now has a companywide adoption rate of 17 percent, although usage varies from division to division.

"It is the company culture to try to get travelers to go online. We are working with them to move online and offering tiered pricing to provide a solution to combat the Pricelines and Expedias of the world," Boeddeker said.

Greenberg said the consolidated buying power of the entire company has made a big difference in its air deals, although committing market share has been challenging because travel is far flung. "With the help of Northwestern Travel Management, we now have pretty aggressive air contracts," Greenberg said. While LW&W's biggest market is on the East Coast, its sister companies are located in the Midwest, in cities such as St. Louis, Minneapolis and Chicago. In its three-month review of one contract, Wolters Kluwer was told it

wasn't delivering the market share it promised, so it was forced to move the business to another carrier.

Nonetheless, Wolters Kluwer has negotiated better air deals. Boeddeker said one carrier that in the past offered a discount for one division of Wolters Kluwer now has agreed to a new contract, doubling the net discount based on the company's consolidated spend. "By moving to a consolidated corporate program, the discounts are significantly higher than what I could have negotiated as a small company," Greenberg said.

Since each company is based in a different city, with different branch locations, each division is negotiating hotels in key cities on an individual basis for now.

"We don't have a chain, and we are not sure we are going to be able to secure one because a lot of hotel chains are not really receptive to the idea," Greenberg said. "They want you to contract at an individual property level."

Wolters Kluwer now is working on consolidating its corporate credit card program and will select a single vendor for corporate card and purchasing card.