By: Will Tate, GoldSpring Partner
Let's explore the true cost of free.
We’ve all experienced it. The lure of free – from free drinks in casinos, to the free resort stay that comes with sales pitch on vacation. But how often do we experience it in the world of business travel?
Follow the money.
It’s pretty easy to recognize and go along with some of the “free” in our industry. We understand and readily accept that no TMC fees and free meeting planning services hinge on the fact that buyers are bringing volume to the table that translates into incentives for the provider.
But the lines get blurry if we go a little deeper. Consider the following issues, just to name a few:
- The value of your data, especially considering emerging technology, and whether
exchanging it for “free” is really costing you down the line. How can you tell?
- Unknown directed spend by providers, especially in light of today’s emphasis on traveler
experience. Is there leakage you’re unaware of and who may be benefiting?
- Inherent bias in travel product selection for your program when the advisor is part of our
industry’s supply chain.
Exactly when is this happening and how?
Transparency is a big issue in all of the above because of complexity. It can be tough to parse the flow of money between the buyer, the TMC, the suppliers and all the third-party players. What’s
to be done?
Pinpoint the cost of free.
As a buyer, remember what you bring to the table and how valuable it is in our
think through, even at the deepest levels,
where your volume (money) ultimately lands
and who it benefits:
1. Define Components: Do a whiteboard session, going broad and deep to define the components and processes that make up your program. You may be surprised at what’s revealed.
2. Detail Levers: Map out where and how the money flows, what value you’re bringing at each turn (volume, data, etc.), and how you may be enabling profitability for other players.
3. Describe Limitations: Looking at the whole picture, consider the limitations others may be placing on your program due to bias or lack of transparency.
4. Diffuse Issues: Issues can arise when surprises occur. Opting for “free” often takes away your ability to apply pressure where needed, demand visibility and have power at the negotiation table.
5. Defy Convention: Are there other ways of doing things? Where are you following the same old path and what can be changed up to create more visibility and keep more dollars in your pocket.
Choose wisely.
Knowing the ins and outs – and the true cost -- of options available to travel buyers today can often be too complicated and dynamic to take on alone. But an independent advisor can sort it out for you and simplify the process.
It may be easy to rely on existing relationships for advice due to the pace of managing travel today and the decision fatigue that comes along with choices at every turn. But be sure to consider the experience and potential bias of an organization – even unintentional or subconscious -- that’s working to solve a problem on your behalf. Especially if it’s offered for “free.”
