My First TMC

Ask yourself why. That's what Dart Container travel services manager Cheryl Benjamin's advice boils down to. What is it you want from a TMC? What are you lacking? What are you trying to solve for? For example, how are your travelers making bookings? Now, how do you want it done? Centralized, everything through one location? What technology do you require, then? An online booking tool? Mobile capabilities?

Also think about where the company is headed, she said. Is it growing such that it soon will need a global TMC? Or for a U.S.-centric program, will a regional TMC that specializes in smaller clients do the trick? And consider whether the company holds contracts with suppliers or instead hopes to access the rates TMCs have negotiated with suppliers. Sykes director of global finance and travel services Al Mazzola additionally advised small and midsize enterprises to consider what kind of reporting they want from their TMCs, and Ritchie Bros. Auctioneers travel administration manager Michelle Grant added access to real-time data and, if it's important to your company, VIP service.

With your needs and expectations outlined, Benjamin recommended chatting with TMCs: "There's nothing wrong with talking to someone at various ones before they even jump into the RFP process because they may find out, 'Wow, they're huge and we're a $1 million account. Maybe that's not the right fit for us.'" Grant advised that you identify a challenge in your business and ask how the TMC can help. Even "ask to make a couple of test bookings with each agency and compare the service, pricing options and counselor knowledge," she said, and ask for references.

But how do you know what TMCs to talk with in the first place? "Pull on other travel managers you know," Benjamin said. "Start asking questions. We're more than happy to share our experiences, good and bad." Look for compatriots among local membership organizations: "Our Michigan chapter of GBTA [has] an informal little benchmarking group that's probably 30 some people," she said. "If we have a problem, we toss it out there in an email, and you're going to easily get 15 to 20 answers."

Of course, you also can pay a consultant for its expertise in the matter. Partnership Travel Consulting CEO Andy Menkes, himself a consultant, explained the service options: Under the most basic service, the client does most of the work and the consulting company provides RFP forms and helps with analysis. Or a company can outsource the entire project, in which case, the consultant likely will base fees on the number of countries the travel program covers and accessibility of company data for the consultant.

So is all this worth it? "You're not going to see ROI in Year One," Menkes said, but assume a 30 percent savings on travel costs in the first year and 20 percent each of the next two years. Deduct the cost of an RFP, including a consultant's fee if that's the way you went, from those three years of savings, "and in every case, there's going to be an ROI."

When the time comes to select a TMC, Mazzola recommended comparing TMCs' costs per ticket and the costs to change a ticket, as well as whether they offer 24-hour service for such changes. Menkes cautioned, though, "The cheapest TMC is not necessarily going to give you the best service."

Here, his advice circles back to Benjamin's: Look for a TMC that can best serve your company's objectives, he said. "Company A may say, 'I'm all about costs, and I want to be as online as possible. I want to be 100 percent online, and I want my fees to be under $10.' Then their best bet may be an [online travel agency]," Menkes said. "Client B says, 'I'm a professional services firm. A fair amount of our work is billable. We want to give our clients good value for their money, but the experience of the travelers is critical to me.' That's a completely different metric. … You want somebody to drive down your costs? Well great. Pick someone who has a low-cost center, somewhere outside the U.S." There also are TMCs that specialize in high service levels and value adds like upgrades. And yes, they'll do it for SMEs, he said.