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22 Sep 2015

Why mobility is the next big battle ground for TMCs

First up, a couple of questions:

When you travel for business, particularly domestic or Trans-Tasman, what do you remember about your trip? If you are anything like me you probably remember who you flew with and the hotel chain that put you up, but that's about it. Do you remember anything about the service and support that your TMC offered you along the way? Well, unless you had a problem the answer is probably a resounding 'no'. 

And, if you are responsible for running a business, would you agree that creating meaningful long-term value for your customers and maintaining a high-level of brand visibility is vital to sustaining a profitable long-term relationship? Well, unless you run a funeral parlour, the answer has really got to be 'yes'.

So what do these two insights have to do with TMCs and Mobile? As it turns out, quite a lot.

If you run a TMC and you service corporate customers you know a number of things to be true: 

  1. You don’t actually have a lot to do with travellers on a day to day basis, until it all goes wrong
  2. The margins are tight, particularly on domestic business and the cost of winning/losing customers is extremely high
  3. Business travellers are becoming increasingly demanding and place a high value on technology and the ability to self serve.

So, if you run a TMC and you subscribe to the story so far then there's a good chance that you'll be actively looking for ways to:

  1. Build ongoing brand awareness for your TMC with travellers so that know who you are and that you are there in the background looking after their interests
  2. Create meaningful value for travellers throughout their trip by offering them technology that improves their business travel experience time and time again, and keeps getting better
  3. Differentiate yourself from your competitors and give yourself an edge when it comes to pitching for new business / defending existing business.
  4. Defending price points in the market, which are under pressure from companies with global scale.

For sure, there are a number of different initiatives that could be framed up to address these issues, but the most obvious and powerful solution is to create a brilliant and remarkable branded mobile app and put it into the hands of every one of your customers.

Think about it for a moment: 

So, we believe that with the right mobile strategy TMCs can solve a number of really important strategic problems that are only going to get more acute over time as clients become more demanding and the global TMCs start to stretch their legs in the mobile space.

You only have to look at what's going on in the market right now to realise that mobile is rapidly becoming the next big battle ground for TMCs and something that TMCs can't afford to ignore. In many cases, regular travellers have a deeper more entrenched relationship with TripCase than they do with their TMC, and that should be a worry for TMCs as its a huge missed opportunity to build brand loyalty and create value at relatively low cost.

The good news for TMCs is that we’re entering a new generation of mobile travel apps where the apps are fully transactional and location aware. With the shift in functionality TMCs have the opportunity to wrestle control back from the app providers that are just out to make a fast buck. The problem with mobile of course is that it’s hard to do well and the costs involved both in creating and maintaining apps is non-trivial, which is why great technology partnerships are the key to the future success of Travel Management Companies.

Really, in the end, this isn’t about mobile at all, it’s a battle to win the hearts, minds and fingertips of travellers. At stake is the loyalty, retention and good will of travellers which is something that should matter a great deal to anyone that runs a TMC today.


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