Trick Your Employees Into Happily Spending Less on Business Travel
(Bloomberg) — Companies in the U.S. spend $300 billion annually on business trips, in part because the people doing the booking don't care how much anything costs.
Corporate credit cards, business travel policies, and airline miles all incentivize employees to spend as much as possible on work trips. "If you're a corporate traveler, to try to get the points, you spend as much as humanely possible. If you work for a company that allows you to fly business class, you're taking the most expensive, most luxurious ticket that is not going to get you in trouble," said Dan Ruch, the founder and chief executive officer of Rocketrip Inc. "That doesn't make you a bad person; that makes you human."
Employees at Aon Plc, a financial services company, expense several hundred million dollars a year on corporate travel. It's Jason Cesta's job to get them to spend less. Cesta, who runs Aon's global travel program, is tackling the problem from multiple angles. He's nudging employees to opt for video calls instead of flying across the country for meetings. He's encouraging shorter, more efficient jaunts. And he's tricking people into wanting to fly coach instead of business class.
For the past eight months, 100 employees at Aon have used Rocketrip, software that incentivizes them to spend less on hotels, flights, and cars for business trips. Every client gives Rocketrip a year's worth of historical data on its employees' spending habits. Using this, the company's travel policy, real time market pricing, and the employee's itinerary, Rocketrip spits out a prediction of the booker's expected behavior. That number sits at the top of the screen as the employee books a trip. Then it dares them to beat that price. Potential savings are listed next to the lower-cost options.
It's a game: For every dollar saved by forgoing a rental car or staying in an Airbnb, instead of a ritzy hotel, the employee gets to keep 50 cents. The money doesn't go straight into the paycheck: Points can be redeemed at the Rocketrip website for Visa gift cards or credit at about 40 retailers, including JCrew Group Inc., Best Buy Co. Inc., and Amazon.com. Aon pockets the other half. Rocketrip takes a 2 percent cut of Aon's total annual travel budget on the promise that it can reduce overall spending by 20 percent to 30 percent.
So far, Aon has experienced around 5 percent in savings, mostly from long-haul trips. "Our numbers are a bit skewed because of the small sample size," Cesta admitted, explaining the gap between its results and the savings Rocketrip promises. Still, to Cesta's surprise, executives will downgrade their flights to redeyes or add connections for cash. "I’m happy with it," he added.
The software works by manipulating behavioral economics. "We’re not a travel product, we’re a behavioral change product," said Ruch. "We get employees to do things they wouldn't otherwise do."
Ruch got the idea for Rocketrip from a conversation with Mike Tangney, the global travel manager at Google Inc., who started a similar program at the tech giant. The basic idea is the same, but instead of offering cash, Google offers its employees such future travel perks as upgrades. Ruch liked the idea but thought cash rewards would push more people to participate. (Tangney, who now advises Rocketrip, declined to comment.)
Aon has made Rocketrip available only to a sliver of its 72,000-person workforce, but the program has grown from 40 to 100 participants through word of mouth in just a few months. The company wants to use it mainly to collect data on how its employees book travel, in order to refine its policies.
"To be blunt, there’s a lot of friction in corporate travel programs; there’s not a lot of give and get," said Cesta."This is an opportunity to do a little bit of a give."