<B> UDI Plays Two Cards</B>
<I>Corp. Outsources Data Analysis To Consultant</I>
By Mary Ann McNulty
<I>Charlotte, N.C.</I> - Pioneering new ground, United Dominion Industries last week issued dual corporate cards to its 1,500 frequent travelers and outsourced to a consultant the creation and maintenance of a data warehouse to combine all card data.
By September, the Travel Management Group of Alexandria, Va., will start generating the first reports culled from both American Express and Paymentech data. The consulting firm, at press time, was negotiating with two Virginia-based firms, International Software Products and Unisys, to physically take the data feeds. Known for their ability to consolidate agency data, neither company has consolidated card data.
Beyond providing standard card reports, TMG will provide UDI with analysis of the data. In some instances, it also plans to combine card data with agency feeds on segments booked and origination and destination, as well as feeds from UDI's general ledger to provide units with budgeted-to-actual spend comparisons.
Bucking the trend to consolidate with fewer vendors to lower administrative costs, United Dominion selected dual card issuers--American Express and the British Airways Paymentech MasterCard--as a means to satisfy its diverse traveler base. Since 1990, the company had tried card programs offered by Citicorp Diners Club, American Express and another unnamed MasterCard issuer. It tried individual bill and central bill programs. Administration of the latter was far too costly and complicated, although travelers liked it.
"We had a MasterCard program for the past two years, but found every aspect of the program, from statements, to billing errors and disputes, to customer service was very poor," said Nancy Self, corporate travel manager for UDI, a diversified manufacturer of everything from doors to atmospheric controls. The problems were with the issuer, not the MasterCard platform, she noted. "My name was going to be mud if I didn't come up with something good this time," Self said of the decision to rebid the card program.
Trying to assess exactly what travelers wanted, Self surveyed all cardholders in late 1997. She learned that 19 percent wanted an American Express card for its service, 45 percent wanted a Visa or MasterCard for its wider acceptance, particularly in the small towns that some UDI travelers frequent, and the rest had no preferences. However, 21 percent--primarily the most frequent travelers--said the ability to earn frequent flyer points on spend was very important to them. "Service and acceptance were our two main priorities," Self said.
Faced with these disparate demands, Self interviewed consultants and selected the Travel Management Group, Alexandria, Va., to help with the bid process. Earlier this year, UDI sent its request for proposals to eight banks, including some of the corporation's banking partners. It quickly narrowed the list to just four finalists, including Amex and Paymentech, a Dallas-based card issuer that Self had never heard of before. The latter's new BA MasterCard offers the frequency program that her travelers wanted.
Trying to reconcile the diverse needs of the company, the consulting firm began researching "whether it was feasible to get the key data elements that UDI needs from multiple vendors and put it together," said Tom Wilkinson, president of the firm. "This really required us to look at the data formats of the various vendors. It's not something that can be done casually; you need common nomenclature for the fields. It's a lot of work, but the option gives companies like UDI a means to meet the diverse needs of its internal customer population," Wilkinson said.
Believing they could consolidate the data, Self and TMG began talking to vendors and found them receptive to dual issuance. "Doing simultaneous negotiations with two vendors, you are able to get some concessions," Wilkinson said of the process.
"I'm willing to have the leverage applied," said David Cramer, senior vice president of Paymentech, "though it's kind of a different relationship than we're used to."
In the end, dual issuance and outsourcing its data warehouse is likely to cost UDI more than its previous card programs, but the company is banking on the fact that travelers will be much more satisfied with the programs.
Having dual issuers also gives UDI "the security of knowing that if either of these vendors falters, the other can step in," Wilkinson said.
Added Self, "We've already had an experience where one vendor couldn't make something work, so we asked the other vendor to step in."
But every traveler at UDI also has a choice now, Wilkinson said. "If they're not happy with A, they can go to B."
Except for two operating units, one of which opted to go exclusively with Amex cards and the other exclusively with BA MasterCards, all travelers were given a choice, Self said. About 20 percent of the cards will be Amex, with the rest BA MasterCards.
To communicate the dual decision to employees, Self prepared a matrix that compared the programs side by side, taking the data from the vendors' bid responses. Included was the cost of participating in the frequent flyer programs of each card issuer, $50 for the BA card and $75 for Amex.
All 23 program administrators for UDI's 60 locations also participated on a joint conference call that Amex scheduled, but allowed Paymentech's account manager to join to help simplify the roll-out.
Given the headaches from the last card program, the program administrators have been delighted with this process so far. They're particularly enamored of Paymentech's new Paymentnet software that allows online account maintenance, Self said. Questions and responses are conducted via e-mail now and almost everything is instanteneous, she added.
UDI is sensitive to the proprietary nature of some program aspects--such as late fees--but they are generally the same.