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Rapid Growth, New Travel Changes

Using a Wealth of Data and Sharp Supplier Negotiations to Save $850,000 a Year

Situation

Every company wants to grow – that’s what we’re all in business for – but growth can lead to unplanned obstacles. Take a U.S.-based laboratory equipment company, for example, that had grown rapidly through acquisitions in just a few years. Becoming a major industry player was good news, but with operations in more countries, their growing pains included fragmentation, air supplier contracts that didn’t match their new travel patterns and annual air spend that had increased to $27 million.

Solution

Confronted with a large, evolving air program footprint, the client’s internal sourcing team knew they needed help to put their own best foot forward at the negotiating table with the airlines. American Express Global Business Travel took a close look at the client’s current supplier relationships: using our data repository, covering $170 billion travel and expense spending per year, we generated a fair market share report that looked at various key city pairs, and built benchmarking reports to see how the client’s existing contracts measured up. Our Air Sourcing analysts identified savings opportunities and developed an optimal sourcing plan, including customized negotiation strategies for each airline.

And we didn’t stop there. Deep insight put the client in the pilot’s seat during air contract negotiations, but American Express Global Business Travel stayed close throughout the process. We joined calls with the airlines and provided advice to help the client make smart decisions that got them the supplier discounts they required. This collaborative effort during negotiation helped the client improve their relationships with the airlines and ultimately build on the sourcing traction they already had.

Outcome

When they came to American Express Global Business Travel, the client’s sourcing team had already achieved a 4.6% net effective discount with their suppliers on their own – but everyone can always use a little help. With our sourcing insights, negotiation experience and longstanding supplier relationships in their back pocket, they had the confidence to negotiate contracts aligned to their evolving travel patterns, for a total savings of 7.7% (an additional $850,000 per year).

Rapid expansion doesn’t need to be scary – we can help take the guesswork out of crisscrossing the globe, and doing it at the right price.