Nothing beats word of mouth for business travel providers seeking new clients. Established players count on referrals, with the most gratifying coming from former users recommending them to new employers. New entrants incentivize to evangelize. The lucky business travel startup hooks a big fish corporate account and rides the wave of publicity. Downstream from big corporate, new entrants going after unmanaged business travel are making what resemble business-to-consumer plays. That requires an ad budget.
There is diversity in the approaches.
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“These companies have to do more marketing than trade shows and trinkets,” said Atmosphere Research Group’s Henry Harteveldt. “They start with search engine optimization (SEO), but can’t just do that and search engine marketing (SEM) and a Facebook page. They need to be more comprehensive.”
The throwback in the crowd is Upside’s radio ad campaign. Upside is going after unmanaged business travel. Asked during a recent American Society of Travel Agents conference whether the Upside ads were working as well as those Priceline ran back in the day, Jay Walker, founder of both, said:
“It’s very different. When you have William Shatner telling you that you can name your own price for airline tickets — and of course the vast majority of airline tickets are purchased by leisure travelers — you’re going to have a much bigger uptake. Upside’s radio ads are targeting unmanaged business travelers. There are maybe 10 or 15 million of them and they already have their way of doing things. That being said, it’s going really well. It’s very hard to stand out in the U.S. with any kind of advertising budget. The smallest Pringles variation of a flavor spends $10 million. We are using radio personalities — everyone from Howard Stern to Rush Limbaugh, which is a very broad range — to tell people there’s something new and exciting. Radio is very efficient, and cost-effective. Ninety-five percent of American adults listen to the radio once a week and they listen to it because they want to.”
Darned right it’s hard to stand out. Nevertheless, Walker said, “digital media is also quite good.”
It’s not for everybody, but some startups spend on Google and Facebook. The duo takes in nearly half of global ad spending. They accounted for 77 percent of the nearly $12 billion in U.S. online ad growth last year, according eMarketer data published this week in the Wall Street Journal.
“One thing I can say that we’re not doing is, for example, performance marketing up against the behemoths,” said Choon Hong Peck, co-founder and CEO of ETA Inc. “There’s just no chance we can perform well in that kind of environment.” Big budget advertising also is out for others including Pana and NexTravel (which is focused on midmarket rather than small firms).
Advertising is one of the least effective means of lead generation for TMCs, according to a survey this year by ASTA and The Company Dime. More than 60 travel management company executives participated.
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Where some startups and TMCs meet in digital marketing is on original content. That helps with generating more business from existing clients as well as finding new ones.
“You have to give information for customers to come into your shop now,” said Mike MacNair, a Direct Travel senior vice president, also speaking at the ASTA event. “The ways to do that electronically are more cost-effective than ever before. Having those tools and going back to existing customers to remind them of why they’re managing travel is important. In the SME market, that person wearing multiple hats has no idea how to remind all the travelers why they should be doing this. Infographics, stories, tales, blogs, white papers … they’re all really important to have.
“It’s the triple sale,” he continued. “You should be managing travel, you should be managing travel through me, your people should be using the system I just sold you. It’s a hard sale.”
MacNair and other TMCs like the United Kingdom’s Click Travel for years have blogged about the merits of managing business travel. As with TMCs, some startups do this more than others.
Companies in the unmanaged category, naturally, do not employ a travel person. “They try to inform themselves,” said 30SecondsToFly co-founder and CEO Felicia Schneiderhan at the ASTA event. “They Google ‘how to write a travel policy.’ It’s important that we are present in the results. We have invested a lot of our energy into content marketing and search engine optimization. We have a special advantage in this field. Nils Cartsburg, my CMO, founded his own SEO agency a decade ago.
“This is how we get to the SME market,” she continued. “If we didn’t have this very scalable, very cost-effective channel, it would be very difficult. You can’t throw money at SEO and expect results. It needs to grow organically. SEO is very effective but takes a long time.”
Compl.ai just hired an SEO specialist. But like TripActions and others, it also is focused on leveraging networks, contacts and intel to better target potential clients and create referrals.
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“We’re in closed beta primarily with companies in Texas where we get to grab coffee and find out what’s working,” said Compl.ai CEO Daniel Senyard. “It’s direct selling to fill up with companies willing to go along for the ride. We kind of bridge finance, travel and HR. There’s a plethora of conferences we can spend a lot of money going to but we’re zeroing in on micro-communities. Where are the CFOs and HR pros gathering once a month or per quarter to discuss trends or have a luncheon? We think it’s more cash- and focus-efficient to sponsor a luncheon than to go to a big conference.”
TripActions includes spending on SEO and SEM (even on Instagram) as part of its marketing mix, but also commented on local networking. “In markets we’re operating we discovered CFOs have their own communities, their own mailing lists, etc.,” said CEO and co-founder Ariel Cohen. “When CFOs started to see the savings, they started to talk about it in their communities and we started to get inbound requests.”
In the ASTA research, sales was the No. 2 source of new business for travel management companies after referrals. In later interviews, startups generally didn’t talk much about sales teams, with the exception of Pana. Noting that SEO is not a primary strategy, CEO and co-founder Devon Tivona said:
“We look pretty similar to a traditional TMC in our methods. We’re a huge fan of sales and believe in that as a way to grow our business. We leverage a massive amount of data in all our outreach, based on our proficiency as tech people. There’s so much publicly available information about all potential clients out there in the world. I know their last fund-raise, their growth rate, what technology they use, traffic data on their website, their social presence, etc. I have a list of 5,000 companies with seven or eight attributes I’m focused on.
“We do an immense amount of data collection and then when we reach out to a prospect, we demonstrate our knowledge. A typical email might say, ‘Hey I saw you raised a Series A and you likely hired x people and we’ve seen with other clients that travel management at this stage …’ It’s such a higher-level conversion rate versus the blanket email.”
“I think that’s smart,” said Harteveldt. “It shows some ingenuity and allows a company to be more focused and collect the info they need and want, as long as it’s not inappropriate. There’s that proverbial fine line between cool and creepy.”
Compl.ai’s Senyard agreed that blanket emails are inadequate. He said he has tried using lists bought from business journals, but they produced a “very bad response rate.”
Another strategy is channel partnerships. Travel and travel tech suppliers, expense management providers, accounting software firms and even banks offer possibilities. TMCs can fit, as well. Some startups use them simply to support customers and provide fulfillment. Others see TMCs as useful for lead generation, or as resellers.
Pana and TripActions work with Bruvion Travel and S.R. Travel, respectively, but are considering adding more. 30SecondsToFly moved from a small corporate agency partner to Christopherson Business Travel.
“We wanted to be a technology company from the get-go,” said Schneiderhan. “We never wanted to be a service company. That’s not what we are good at. It was very important for us to find good partnerships with travel agencies to add what our technology couldn’t provide. Our artificial intelligence cannot replace an agent. We are still far away from that. Working with an agency means we both need to adapt. Our business partners needed to adapt their workflows around how our tools and interfaces work. That’s a risk for us. As a startup, speed means life or death. Partners need to adapt quite quickly.”
NexTravel has added TMC partners since launching with Atlas Travel & Technology Group, including Adelman and W Travel. CEO and founder Wen-Wen Lam said the company is “doubling down” on partnerships. Reseller relationships have allowed NexTravel to defer building up its sales team, though that is in the works.
Upside considers TMCs part of its “ecosystem.”
Disclosure: ASTA and The Company Dime have a research and events partnership.
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