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Articulating the value proposition of a TMC post COVID

David Chappell
Sep 24, 2021 2:48:51 PM

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MIDOCO, in conjunction with the Advantage Travel Partnership, participated in this panel session on the 22nd of September 2021. 

Following on the last discussion in May focussing on the re-evaluation of the value proposition of a TMC, this panel discussed the options of articulating the value proposition of travel management companies.

A very well received and lively conversation with buyer, TMC, reporting, duty of care and technology providers all represented, the panel discussed the role of collaboration and the need to engage with each other on a more integrated level.

The Session was moderated by Steve Dunne, Digital Drums leading the discussion with: 

  • Bex Deadman, BlueCube Travel
  • Audrey Muir, Baillie Gifford
  • Jason Andrews, Crisis24
  • Chris Lewis, Travelogix
  • David Chappell, Midoco Midoffice & Umbrella Faces
It was a word that was said throughout the panel session. Collaboration.
 
It is becoming increasingly clear that Covid-19 has caused a fundamental shift in the focus of Corporate Buyers. Not purely away from costs as a driver, but more so to include as equal considerations that which may previously have been considered “soft” factors, such as risk, sustainability and Duty of Care.
 
It seems evident that right across the value chain, from the TMC-Customer relationship to the Supplier-TMC relations, that all parties need to engage with each other at a new, more integrated level. It is no longer enough to be able to trade with a customer on a purely transactional level, TMCs must look to enhance their position as part of the decision process right across their customers’ businesses, and not solely with the people making the purchase. The whole of the Corporate must understand and be involved in what the TMC is bringing to the table.
 
It is a change driven by the myriad complexity that Covid-19 has layered onto the public. Both in reality and in perception. Travellers are once again looking for an experienced, informed hand to be able to guide them through the mechanics of booking. Gone are the days of “need travel, book travel, go travel”. The layers of additional checks and balances required from Corporates and governments can make even the simplest of journeys feel daunting to arrange, and particularly at scale.
 
The panel agreed that agencies must now be involved at all levels in the decision process, from viability to cost to risk assessment – with the latter now making itself felt before a trip enquiry is even initiated. Now the agent must be able to succinctly access and articulate the status-quo of a given destination so that their customers can make informed decisions about whether to travel, in a world where rules and requirements are ever-changing.
 
This in itself is not entirely new, but it would seem that the onus that need to be placed upon it is very much changed. For example, whereas a travel programme in 2019 (a.k.a. 2BC: Before Covid) to Europe would have been considered low risk, now it is equally as risky as any other Covid destination worldwide, and potentially as volatile to change in status as any area globally. This is very much a change of mindset and often a daunting prospect to companies that hitherto had no exposure to a risky programme. They will invariably look to their agent partners to help them navigate these unfamiliar waters.
 
Technology partners in this new world must play their part too, by offering up new solutions and ways of enabling agents to remain efficient whilst performing increasingly more complex tasks as the travel facilitator. It is not enough to say they are simply connected to a TMC, they must actively talk with them about how their technology can help in ways that perhaps the agent had not considered, until now.
 
By engaging in both directions within the value chain – towards customers to properly understand their need and drivers in purchasing travel – and towards suppliers to understand latest technologies and offerings that could help in this – the Travel eco-system has never been more interdependent. What’s more – this change is coming, regardless of whether an agent chooses to engage with it or not. It would seem a likely outcome that those who don’t look to build these deeper, for integrated strategic relationships within their customer and supplier bases may not fare so well as those that do so proactively in this changed landscape.
 
There was a final key requirement discussed amongst the panel too – the ability to be able to return that additional value to the end customer – to be able to talk about the hows and the whys of their behaviours, and not just the what-did-you-buy.
 
Here we need to evolve our own understanding of what it is to capture the decision making process and to be able to return that to the customer in a meaningful, insightful way. It would seem that capturing reasons for travel, for authorisation, sustainability and risk assessment have never been more important.
 
It was almost a year to the day since many of the panel members met to discuss another important part of this final piece, that of how an agency might actually charge for the services rendered in this changed landscape. It would seem that since that conversation that the relevance of a subscription model, but not a reliance on it, is now a viable option in being able to demonstrate value. That is not to say that subscription models are to dominate or revolutionise TMC pricing strategies, but more to add that they are now understood models that should be available to the end customer, if it works for both parties. This in itself represents a changing mindset towards the financial reward for a TMC from the Corporate towards one that is traveller-orientated and less volatile than pure pay-to-fly fees. This in turn perhaps reflects the changing sentiment of the market - that in times such as these that the value of an agent has never been more important to the customer. 
 
So, in the end the panel was united in agreement. That collaboration across the spectrum of travel – from buyer to agent to supplier - is an essential path that TMCs need to walk over the coming months and years. The pivoting of the market after Covid-19 into new priorities of the Corporate reshapes much of the service required from the TMC. This  re-evaluation of the TMC proposition has, in turn, given us a unique opportunity to re-frame the conversation about value and the very reasons behind why so many agents are so good at what they do.
 
This will only be achieved by engaging and collaborating with customers and agreeing with them what is important for their travel programme on a deeper and more fundamental level than just airlines and fees. With the right systems to support it, processes to enable it, engagement to articulate it and crucially, people to be at the heart of it, it seems there is plenty of opportunity for agents to remain as critical components in their customer’s programmes – and more so, to be ones where their value is fully understood.
 

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