OP-ED: How To Win A Corp. Account

<B> OP-ED: How To Win A Corp. Account</B>

By John Caldwell

<i>John Caldwell, an attorney, is president of Caldwell Associates, a travel management consulting firm based in Washington, D.C.</i>

<hr><b><center><FONT COLOR="#2D6E33">Click here to respond to the following editorial on the BTNOnline Bulletin Board

<hr></b></center>Since the last round of commission cuts, an extraordinary number of accounts, both large and small, have been evaluating their travel agency relationships.

Clients are looking for a travel agency partner able to provide (1) sophisticated technology with solid support, (2) experienced, motivated and loyal personnel, and (3) an ever broader range of consultative services. They are willing to pay, but only for real value, not for what they can do better themselves or through other third parties, such as technology providers. They are often suspicious of travel agency claims made in bids and presentations, and the "cloud" of overrides still raises questions of conflicts even in fee-based deals.

Clients want to be understood, but not oversold or lectured. They expect an honest relationship based on flexibility, and in some cases, menu pricing, but with demonstrated, verifiable costs per item of service.

While the quality of travel agency bids and presentations has improved over the past few years, some real opportunities exist to raise the bar:

Be aggressive, but avoid overstatements. No one expects you to be too modest, but exaggerated claims undermine credibility. Examples include (1) saying at presentations you have just renewed a long-standing client relationship, while negotiations are pending, (2) overstating geographic consolidations, such as "we have consolidated X globally" when in fact you only have Europe or the U.S., (3) inflating estimates of hotel commissions by assuming 100 percent use of the travel agency for hotel bookings, and 100 percent commissionable hotels, and (4) assuring the client they will receive full attention from an account manager who is already juggling 10 other clients. Clients appreciate honest portrayals, upbeat, but without hype.

Listen first, then respond. This effective habit applies dramatically in this industry. There has been a tendency to talk too much without active investigation of and listening to the client's needs. Listening includes pre-bid research, learning about the company and its culture, and reading the RFP carefully. Be flexible during the presentation to adapt to the committee's interests, rather than rushing through what you assume everyone wants to hear. Agendas change, and the presenter needs to be able to adapt quickly. Senior client management may not take the time to let you know in advance what their questions will be. Try some "dry runs" for presentations, anticipating the full range of questions you might encounter. Keep in mind that committee members may have related expertise in the subjects you are addressing, so you will face rigorous scrutiny. Do not underestimate your audience.

Don't expect a huge profit for showing up. Clients in most cases want their suppliers to be profitable and strong. At the same time, however, they are reluctant to open the check book based solely on claims of superior service. Be prepared to bet your return on demonstrated delivery of excellent service. Advising the selection committee that you only have to make X and don't care how you get there does not go down well. Moaning over recent losses due to commission cuts also produces a negative impression. Clients expect you to manage their business, but without automatic guarantees of profitability. Year one should be for rollout, testing and adjusting, and the real return should begin in later years on demonstrated performance on objective metrics. This is the same in other service industries, so there is no reason that you should be too surprised.

Benchmark your competitors and other industries. Most large service companies have learned and borrowed shamelessly from competitors. There appears to be little benchmarking within the industry and more of the "not invented here syndrome." An example is telephone centers where other service suppliers seem to have made more progress in managing call volume peaks and valleys, without sacrificing the "touch and feel" of knowing the customer intimately. Roll over telephony in itself has not been the best answer yet.

Know your costs and explain them. Clients do not have a hard benchmark to verify that an 800 number call or international rate desk should cost what you propose. Suspicious selection committees assume there is a markup on everything. Overhead sometimes masks subsidies for items the client does not want to pay for and sees as adding no value. Examples include company cars, overseas networks where the client is consolidated with another company and undefined "central support." Clients understand that overhead costs are necessary, but they expect you to explain the benefit to them in the level you wish to charge.

Attitude can be everything. The tone set during negotiations can win or lose an account. More listening at this stage is wise, even when you are a finalist. Flexibility is critical since an overbearing approach, especially to financials, can be fatal. There is risk of creating the impression of a "bait and switch" if new costs materialize at the negotiating table, or if you take a different stance from the one you took in the bid and presentations. Avoid pushing back too hard, even if the client is taking a hard line. There is more than one way to say no. You need a reasonable explanation able to withstand scrutiny. For example, if you offer CRS revenues to other clients, be careful if you now tell the new client you have a policy of holding back these revenues.

Be consistent throughout the country. Even if you are regionalized, your basic profile needs to be updated and made consistent bid to bid. Having huge differences in your bids eventually will become known and cause you problems. It sends a message that you are different companies only loosely affiliated by common ownership.

Be professional in losing. There is no excuse for unprofessional behavior during transition to a competitor. Sophisticated clients always will check lost account references, and it will come back to haunt you if you pull people too quickly, allow service to deteriorate or delay profile transfers or release.

Surprisingly, there are still some instances of burning bridges in this very small industry. As a successful company, you expect cooperation fully from the incumbent and you should do the same if you lose. Clients have long memories on this issue.

None of the above assumes clients are perfect or make no mistakes. Not every company is right for every agency. Being client selective is also a good practice. At the end of the day, everyone wants longer term relationships built on openness, trust and mutual respect.