We recently talked about a recent Morgan Stanley survey that highlighted how 2019 travel budgets aren’t growing as much as previously predicted, and what this could mean for sales organizations.
With 60% of economists predicting a recession hitting the U.S. before the end of 2020, corporates will need to give serious thought to how their business travel budgets will be impacted. In particular, how could reducing travel and expense (T&E) spend negatively impact both revenues and corporate culture?
Harvard Business Review recently developed a very interesting report which tackled this issue (you can read it here). The report revealed that while 62% of organizations view business travel as critical to building closer relationships with suppliers, 69% of them reduced travel budgets, with more than half of them restricting travel frequency and selected less expensive travel and accommodations.
There are several potential consequences of these actions. The most obvious is that reducing the number of face-to-face meetings can hurt sales. Relationships built over email and the phone will never be as strong as those based on in-person meetings, and given that the relationship with the prospect is estimated to account for as much as 70% of a purchase decision, cutting out meetings could impact sales numbers at a time when an organization can least afford to lose deals.
Another challenge, which we have discussed before, is the impact on morale of reducing the class or hotel grade or airline class of service. While infrequent travelers may not be too concerned about having to take a connecting flight instead of direct, those who travel most frequently will likely take a far more critical view of it. With these frequent travelers often being an organization’s top revenue generators, reducing their quality of life during an already trying period could lead to turnover.
The HBR report takes insight from a range of experts – including academics, analysts and industry insiders – to address how organizations can better optimize their travel budgets during economic downturns. The report particularly looks into how data and technology can be used more effectively to maximize the value generated by business travel. It’s critical reading for any corporate travel, finance or HR leader who needs to stretch their travel budget as far as possible.
Click here to download the report, and see how your organization can insulate its travel budget against future financial crunches.
Our choice of Chrome River EXPENSE was made in part due to the very user-friendly interface, easy configurability, and the clear commitment to impactful customer service – all aspects in which Chrome River was the clear winner. While Chrome River is not as large as some of the other vendors we considered, we found that to be a benefit and our due diligence showed that it could support us as well as any large players in the space, along with a personalized level of customer care.
We are excited to be able to enforce much more stringent compliance to our expense guidelines and significantly enhance our expense reporting and analytics. By automating these processes, we will be able to free up AP time formerly spent on manual administrative tasks, and enhance the role by being much more strategic.