Top key performance indicators to drive corporate travel programme efficiency
Managing a corporate travel programme without tracking its performance is like running in circles. Despite all your efforts, you won't see any tangible results or take informed decisions. That said, you can turn the guesswork into data-backed insights by tracking key performance indicators.
What are key performance indicators, or KPIs?
KPIs are quantifiable measures that offer insights into performance towards your desired goals. Whether your corporate travel programme is performing as per your targets, are you able to save more, is your business traveller happy, etc., can be analysed through by implementing KPIs.
For instance, if your target is to ensure 100% policy compliance, by setting and monitoring KPIs, you can track policy adherence and work towards the goal. Companies use reporting tools to track, monitor KPIs, and optimise performance accordingly.
Advantages of tracking KPIs
There are several pros of measuring KPIs in your travel programme, including:
• Data driven solutions
• Actionable insights
• Measure performance and effectiveness
• Practical view without any guesswork
• Improve accountability
How to measure KPIs for effective management
By closely monitoring various metrics and KPIs, travel managers, bookers, and decision-makers can ensure that their corporate travel programmes are not only cost-effective but also aligned with broader business and strategic goals. While implementing KPIs you can also create your own KPIs, depending on your policy, for instance, it can be limiting number of international trips. Regularly reviewing and adjusting your metrics and KPIs will keep your programme running seamlessly, ensuring that every trip delivers maximum value and contributes to organisation's progress.
KPIs in corporate travel programmes
You can set business travel KPIs to your corporate travel programme. These KPIs will become your go-to for insights and learnings. Some of the commonly used KPIs in travel programmes that are also leading indicators of efficiency are financial (cost savings), operational efficiency, and traveller experience. The right KPIs will also help travel managers, bookers, and decision makers to measure every element of the travel programme including number of flights, hotels, cars booked; out of policy bookings; success from negotiated rates, and traveller experience.
Monitoring the KPI data can highlight gaps in your business travel programme, helping you to make amends to drive policy compliance, follow set business processes and hit business goals. Moreover, KPI reports can give a view of unforeseen expenses and return on investment.
Four KPI categories to measure your corporate travel programme
- Financial KPIs: This key performance indicator gives visibility on costs and financial efficiency. By tracking financial metrics and KPIs such as total travel spend, net profit margin, savings from preferred suppliers, etc., you can maximise savings, align with business metrics, contribute towards gross profit margin, and drive business objectives.
- Operational KPIs: Want to measure how seamless is your corporate travel programme? This key performance indicator will tell you about processes, lead time, whether time to book flights and hotels has reduced, what is the success rate of your processes- you can measure performance and track progress of set processes as this performance metrics will reveal it all.
- Traveller satisfaction: Every travel manager wants to ensure seamless travel for their business travellers at every touch point. Whether it is giving them rich content at the time of booking, arranging ground transport or sending real-time notifications when they hit the road. In this view, some of the strategic KPIs to track would be traveller satisfaction, well-being, his/her experience, and response time to any disruption.
Sustainability KPIs: If you have to achieve sustainability goals, one of the ways to see how far you've come would be to track KPIs linked to carbon emissions and choosing eco-friendly options.
Now that we've covered the broad categories, here's a deep dive into the relevant and right KPIs to measure progress, achieve customer satisfaction, optimise performance, and help in achieving business priorities, revenue growth, employee engagement, and overall organisation's progress.
1. Total travel spend
This is one of the crucial key performance indicators to track. This KPI tells you how much your company is spending on corporate travel. The total spends tracks every penny that goes into business travel- from flights, hotels, car rentals, visa, to insurance. By regularly tracking this financial metric, you can get insights into overall budgets, spends, spot budget leakages, seasonal spikes, and identify potential areas for cost savings.
2. Cost per trip
While you measure performance by tracking total travel spends, insights can be derived from granular details like cost per trip. This key performance indicator gives an in-depth view of how much each business trip costs across different destinations, if there was a budget overshoot, and how to bring more control. This is one of the financial KPIs that can help in achieving business objective.
3. Cost of last minute bookings
Last minute bookings can happen due to urgent meetings and events, but they can also blow up your travel budget. How do you ascertain it? By tracking how many trips were made in the eleventh hour, how much did they cost, and how do they affect net profits, you can plan better for unforeseen circumstances. This is one of the most relevant KPIs that you should have on your key performance indicators dashboard.
4. Traveller satisfaction
While cost is always a given, another crucial key performance indicator to track is the experience and satisfaction of your business traveller. Ultimately, your employees are travelling to different locations for meetings and events and the onus of their smooth travel lies on you. Here, gathering their sentiments, experiences, response time to queries, and any negative experience is crucial and can be done through surveys, feedback forms or even ratings. This kind of performance tracking can help you gauge suppliers, and internal processes, helping you to tweak your corporate travel programme and optimise performance.
5. Policy compliance KPIs
Whether or not your employees are booking trips through the right channels, using the booking tool, making reimbursements, uploading receipts, overstaying without permission or not adhering to set spending limits. All this information can be viewed and analysed by tracking the policy compliance key performance indicator. This is one of the important KPIs that'll give you insights into proper channels of booking, if guidelines are followed, how disciplined are the travellers, etc. A high compliance rate will mean the set procedures are adhered, if not, you can plug the loopholes as non-compliance can affect business performance, costs, organisational goals, and even human resources.
6. Result of negotiated rates
Corporate travel programmes often rely on preferred suppliers to get negotiated rates air, hotels, and car rentals. Tracking how much you are saving from preferred suppliers becomes one of the strategic KPIs to track because it shows how effective your negotiated agreements are. This key performance indicator can justify continued partnerships or you can renegotiate the deals, if you are not saving a single dime. Track this KPI over time to see if savings are consistent or if adjustments need to be made to preferred supplier agreements.
7. Trip length:
Long trips can be a business decision but unnecessary extended stays can be highlighted if you add this KPI to your list. Tracking the average trip length provides insights into whether your business trips are optimised for both cost and efficiency. This key performance indicator can expose travel budgets leakages and highlights opportunities for optimising trip lengths without compromising business objectives.
8. Carbon Footprint
Sustainability is becoming a key concern for businesses and tracking the carbon footprint of your corporate travel programme is crucial than ever. This metric helps you measure the environmental impact of your company's travel activities, enabling you to make informed decisions about reducing emissions and promoting sustainable travel practices.
Ready to take control of your corporate travel programme? FCM can help you to develop KPIs, KPI dashboards, set critical metrics, track metrics, get KPI reports and achieve strategic goals. The performance data will optimise performance and ensure employee satisfaction as well.