Profiles In Travel Management: New Process Finds Co. Low Fares
Company: Broadcom
Headquarters: Irvine, Calif.
Semiconductor manufacturer Broadcom last year internally implemented a new process to find the lowest possible airfares. The initiative, which spread companywide in North America in October 2008 and this year expanded to Europe, yielded immediate cost savings and higher compliance and online booking adoption.
The large-market company reduced its domestic average cost per mile 13.4 percent and international cost per mile 9.4 percent in the second half of 2008 from the same period in 2007.
Former Broadcom travel manager Bryan Holmes, working with travel management company Carlson Wagonlit Travel, built the process that expanded agents' search criteria to include broader time windows with connection options and alternate airports. In addition, when applicable, agents are required to search fares from consolidators, airline Web sites, leisure online booking sites and metasearch site Kayak.com.
For tickets of more than $300, Broadcom applies a 14-step "low-fare finder progression" to find savings of at least $100 on domestic and $200 on international tickets or validate that the reserved fare is the lowest possible.
The progression methodology starts from a two-hour window and gradually expands the search filter to six, 12, 24 and, if necessary, 72 hours, and includes other such criteria as a connection option and alternative airports.
The system kicks online bookings from the company's preferred Cliqbook tool that exceed $300 to an agent. The fare search process helped drive online adoption as travelers could stay off the radar screen by keeping their bookings as low as possible, said Holmes, who added that most of the Irvine, Calif.-based company's online bookings are under the threshold because of its heavy travel along the West Coast.
Supporting the process are e-mails to travelers and their supervisors once a reservation is made. The e-mail also has the lower fare options returned by the agent and the time window of the reservation, a reason for declining that fare, if appropriate, and a link to information about the low-fare search process.
Holmes said the e-mail communication platform had been in use for several years as part of Broadcom's Sarbanes-Oxley compliance efforts. He worked with CWT to build on top of the current platform because "there is a benefit of simplicity, especially in this age where all information is available."
A two-month training and change management process transitioned agents to the new search methods. One agent worked full-time with the new methodology when it launched in March 2008 with select Broadcom groups, including executives and senior management. One agent was added per week to the program.
In the first four months of the program, all ticket requesters received an e-mail about lower fare options to accustom travelers to the process.
Although the process for the most part requires more agent time, Holmes said the added cost is negligible in comparison to the potential savings of lower fares, especially when air accounts for about 50 percent of the travel budget while agency costs are about 2 percent to 5 percent.
He also noted that because of agent search efficiency, process standardization and traveler buy-in, agent productivity has not declined—a common concern when agents start searching multiple content sources. "Even if you double the time for them doing the search, it's not all that much time," Holmes said. "The agent is accountable for the logic of the process, not necessarily every single step."
For example, if an agent knows the company's negotiated fare on a specific route is unbeatable, they can skip most of the steps and do a quick Web search to validate the fare.
A learning curve also existed with Broadcom's preferred carriers. What some saw as a roadblock actually became an opportunity to drive marketshare, said Holmes, who left Broadcom last month. "You have more control of getting marketshare. Even if the traveler is a frequent flyer with another carrier, if you give us a great fare through our discount, the traveler is more likely to go with you because it is going to be more visible that they are making a bad choice from a cost perspective."
Holmes' innovative low-fare search strategy isn't a reinvention of the entire booking process. Instead, it's a change in mindset and behaviors for agents, travelers and himself as a travel manager. "We are not the cops," he said. "You are information providers. We are not responsible for the choices travelers make. Even with a rigorous policy, there are workarounds and exceptions, and we are not part of the approval path or the final decision making. We are not accountable for the decisions they make, but we are accountable for providing the best information possible."