Management strategies: the value chain

 

Some say that Arthur Miller’s Play Death of a Salesman still resonates strongly today. The narrative is of a man using out-of-date, out-of-touch business practices in a modernised world. The fact is Willy Loman, the lead character, would still recognise the sales patter, pitches and techniques if he walked into an office in the 21st century. The mindset has changed little since the 1950s. 

 

“Yet sales is now starting to rebound from at least two decades of negative perceptions and is being increasingly recognised as one of the most critical functions for driving business value in both large and small organisations,” says Nick Porter, chairman of the Association of Professional Sales.

 

The travel management industry is still anchored in sales. Today, travel managers are sold systems and services; they, in turn, sell managed travel programmes to their corporation – and their business travellers. It’s a merry-go-round of pitches, RFPs (requests for proposal) and presentations. 

 

Yet most of what we understand and practice was formulated in an age of information asymmetry – between sales people and those they sold to. At one point a rep could recite from a brochure and make a sale. It was an age of glossy sales collateral, of Filofaxes and rolodexes. Reps knew things and people that travel managers didn’t know; that’s why they bought their services. 

 

Fast forward and the biggest arbiter of change has been the internet, with its vast libraries of online content, and technology platforms in general. Today, there is no information disparity; with the click of a mouse you can find almost anything your service provider can find. 

 

“The salesman isn’t dead. He or she is now just evolving into a different animal,” says Ken McLeod, director for industry affairs at Advantage Travel Partnership. 

 

Nowadays, sales teams throughout industry are judged less on the volume of calls they make and leads they generate. Performance is increasingly based on the number and quality of the social engagements they build and how they’re influenced. There are lessons to be learnt here (see box below).

 

“Due to this new environment, travel managers have had to change the way they operate by creating a fluid and dynamic circle of influence,” says Julie Jones, senior member services manager at the ABTA. 

 

“What’s important is keeping pace with changes in this business environment. With new cohorts coming into the workforce, such as generations X and Y, they will be looking for more freedom, not less, which presents new challenges.”    

 

In many ways Arthur Miller’s play is as relevant right now as it was when he penned it back in 1949. In the play the main protagonist Loman admired a truly effective salesman who was well-liked and remembered by his business associates. In an age in which social media, social selling and relationship-building online is now crucial, this insight is almost prophetic.   

 

“It is not enough to be a talking sales brochure anymore,” says Jake Spence, director at sales training provider Durhamlane. “Customers are seeking value beyond the product. They need a partner who helps them make the right decision and increases their revenue. Successful salespeople have fundamentally changed their mind-set from ‘selling something to someone’ to ‘deeply understanding the customer’s needs in order to help them grow their business’.” 

 

In many ways, the profession and selling as a business process are increasingly moving up the value chain, while those who buy travel are looking for more value beyond just a binary transaction, such as the purchase of a hotel room, air ticket or a managed programme. They are focused on services and solutions rather than products. 

 

As one travel buyer puts it: “It’s not about savings anymore. It’s about bringing procurement into line with the changing landscape.” Those involved with travel programmes increasingly want real insight and market intelligence, as well as partners who can help them bolster their business. This takes a whole new level of competence. 

 

As Paul Broughton, regional managing director for UK & Ireland at Travelport, says: “You need to go beyond the pure features and benefits of a solution. You need to gain an understanding of people’s challenges and what keeps your customer awake at night, and focus on those needs and wants, making sure your proposition can help solve these issues.”

 

It seems sales people are increasingly becoming more like business consultants, which could explain why business consultancies including PwC, McKinsey, Boston Consulting Group and Deloitte are having to hard-sell their services. Everyone in the value chain has to offer genuine insight. 

 

“It is about being agile, as well as accepting that change is constant and that the evolution of technology will enable better value-added service in the digital age. This will be crucial going forwards,” says Advito director Michael Silvey. “It’s about enriching the traveller experience in order to guide them to make the right decision.” 

 

Certainly, travel buyers are trying to glean information from everywhere, including traditional channels such as TMCs, airlines, hotels and technology providers. In other words, they have an ecosystem approach to education and achieving their own levels of insight when it comes to the latest thinking on corporate travel. 

 

“Over the years the ability of a travel manager to turn to others for advice has increased rapidly,” says Advantage Travel’s McLeod. “Years ago, travel managers sat in the background; now they have a prominent place at the table, not just in negotiation, but also in influencing industry trends.” 

 

The success of a travel buyer is also increasingly dependent on the services they procure. 

 

“Everyone has to provide more value than they did previously, while still putting the traveller at the centre of things,” says Concur UK managing director Chris Baker. 

 

“Suppliers, including airlines, hotels and new incumbents, are all now looking to sell directly to the corporate traveller. The redefinition of the distribution channels in the corporate travel space means that sellers need to be more savvy in order to please the corporate and the traveller at the same time. Otherwise, the leakage we see in some of the older travel programmes will continue.”

 

Insightful data from booking systems are certainly helping travel managers become savvier. Those who provide it are moving up the value chain, as are those that help managers maximise the return on trips for the corporation, while eliminating unnecessary travel costs. 

 

“Everyone is looking for more thought leadership from sales people; they’re looking for someone with the ability to understand and offer opinions on a bigger picture, rather than on a single solution alone,” says Travelport’s Broughton.  

 

“They’re also looking for someone who has an understanding of all levels of an organisation as well as the ability to build trust and relationships rather than just a one-off transaction.”

 

New legislation, such as GDPR (General Data Protection Regulation), which will be enshrined in law by May 2018, and other legal constraints, means that any procured services need to be conducted in a more intelligent fashion so they’re compliant with 21st century legislation. 

 

Strangely, technology is helping information asymmetry in the travel industry, but it is also hindering it, with more automated services and fewer sales people.

 

“As far as suppliers are concerned, the reduction of quality in personnel able to provide answers, especially in the airline industry, demonstrates that carriers, for instance, are putting less emphasis on building relationships and more on cutting costs,” states McLeod. 

 

Certainly, moving up the value chain is the best thing that can happen to the sales profession in the years to come. In some industries, automation, advanced algorithms and artificial intelligence are already starting to eliminate low-value functions performed by sales people. Expect it to come to managed travel soon. For example, online chatbots are already filling the knowledge gaps that travellers have.

 

The good news is that in a more complex environment where there is so much information, offering a solution that intelligently interprets what’s valuable and what’s not remains a largely human-to-human process, and this should not be underrated. It’s certainly good to know that there is life in the salesman yet. 

 

 

•Expect more value: It’s less about products and more about services and solutions. Everyone is moving up the value chain. Expect nothing less from your travel suppliers. 

 

•Ask the questions: How can your travel providers add value to you as a travel manager? How can they offer insight and intelligence so you can, in turn, sell your services?

 

•New legislation and changes to the law will mean that your suppliers will need to sell in more value-added services in order to be compliant. 

 

•Selling is more about partnerships and realising your business goals as a travel buyer.

The best sales teams will realise this. The worst will not.

 

 

•Information asymmetry has gone; you need to offer thought leadership to those you sell into, including travellers that you want to be compliant, and to those you report to.

 

•As a travel buyer you need be an influencer and create a circle of influence. 

 

•Successful sales people understand all levels and functions of an organisation, as well as how it ultimately ticks. As a travel manager, you need to as well. 

 

•Sales were originally binary transactions, but not any more. The ability to understand and offer opinions on the bigger picture, trends and services, above and beyond the product, is crucial.

 

•In the age of the experience economy with mushrooming social media, the ability to build trust and relationships, rather than one-off transactions, is essential.