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Concur's Perfect Trip hits turbulence on a bumpy ride to revolutionize business travel

Stuart Lauchlan Profile picture for user slauchlan August 4, 2014
Summary:
Concur is seeing take-up of its Perfect Trip message among enterprise business travellers, but it's paying full fare as rising expenses send it into the red.

airline-middle-seat
As the conference season looms in the fall and we start wrestling with schedules, I’ve been cocking an ear to what seem to be increasing numbers of business travel horror stories from colleagues.

A middle row economy class seat on United from London to San Francisco complete with no seat-back TV and a 1970s level of customer service from a flight crew that were delivering it first time around? Shudder!

Mind you, that pales in comparison with one hack who was recently invited on a corporate trip where the US travel firm decided the best way for him to travel wasn’t on the direct flight, but the one that went via Iceland before having to change at an airport in a square state in the mid-West and then on to the final destination. (He didn’t go.)

Frankly business travel has always been a bit of a gamble unless you know exactly what and when you want.

With that in mind, I was interested to note that travel and expenses management firm Concur yesterday reported that amid some rather downbeat fiscal results, the shining star was the increasing take-up of its Perfect Trip concept.

CEO Steve Singh argues that joining up the disparate and often broken processes involved in planning and expensing business trips is an idea that resonates across industries:

We’re reinventing one of the larger industry verticals in the world, corporate travel. By delivering a compelling set of services on an open platform that allows every member of the ecosystem to benefit from the work of the others all for the benefit of our mutual customers.

The momentum we’re seeing across our industry to work together to deliver on the Perfect Trip should now be obvious and undeniable and that drum beat will only get louder from here.

The ultimate measure of industry transformation is whether customers embrace the vision. Last year we added 4000 new customers. This year we’re seeing roughly 1500 new customers join the Concur family every quarter and as we look ahead to the next few years we expect to be welcoming 5000 new customers to the Concur family every quarter.

Steve-Singh CEO Concur
Beyond the marketing hype of a neat brand, what is the Perfect Trip according to Concur? COO Rajeev Singh explains:

The idea of the Perfect Trip is simple that traveler should have the data and tools they need, when they need it to optimize the value of their trip.

The concept of the Perfect Trip is encapsulated in three simple ideas, it should be connected across suppliers and systems that talk to one another automatically and in real time.

All of the suppliers and systems I touch should be aware of whom I’m, who I work for, what my preferences are and at what context. And this is for obvious reasons so I can get corporate discounts, so my company knows where I am, so my expense report can filed automatically.

It should be effortless, When my United flight lands, I should be asked if I want Uber to pick me up and take me to the hotel. In fact while I’m walking to the car, I should be checked into the Westin hotel that I'm staying at and have my room keys automatically sent to my smartphone or smartcard.

And the Perfect Trip should be transparent, I want to see all the choices that matter me, that have the data I need to make my own decisions for my travel needs. And that’s what our customers want and that is where our industry is headed.

Sounds great - apart from the bit where he’s flying on United whose hugely personalized customer care levels were cruelly exposed this week when this went viral:

United_Airlines_Apology

Partnering

But it’s a vision that Concur can’t deliver on its own, hence a lot of work that’s gone into growing a network of partner firms in the travel and hospitality sector:

While the vision for the Perfect Trip may have started with Concur it has been borrowed, built upon and advanced by leaders across our industry. In fact the vision that everyone can advance and everyone owns. And as members of the ecosystem add their ingredient, their value, they have the opportunity to benefit as they should all while advancing our industry and giving everyone else the opportunity to benefit.

Over the past few months we have announced a number of transformative partnerships with companies like Starwood Hotels, United Airlines, Airbnb and Uber, in each instance we’re working with our customers to manage spend that is happening outside of their traditional corporate systems.

We’re making the business travel experience effortless for you and me as travellers and we’re helping our supplier partners have a more personalized relationship with a broader group of customers than traditional channels can afford.

Now when you link your accounts at suppliers like Starwood, IHG, Marriott, United, Airbnb, or Uber, to your Concur account, you will get your corporate rate no matter where you book. You will get personalized recommendations that will make your trip planning experience better.

Singh says that the Concur is now working with twenty global travel management companies:

We’re pleased to see partners overwhelmingly embrace the opportunity to work together across an open platform to deliver on a vision that customers are embracing, the Perfect Trip.

Delivering on the vision of the Perfect Trip will take the cooperation of the entire industry working together to seamlessly share data to efficiently hand off critical customer information to enable development of new solutions that increase the value of the services we all deliver but when the customer experience is made radically better our industry moves to embrace the opportunity.

But his CEO namesake admits that it’s still early days in terms of customer take-up:

Obviously, we’re in the very early stages of market penetration no matter how you define the market, unless your definition of the market is the five largest companies in the United States. We have tremendous growth opportunities in the US enterprise market, in the enterprise segment of each of the EMEA markets, the enterprise segment of Japan, the enterprise segment of India. In fact the enterprise business continues to be the largest single driver of growth across all the different opportunities that we’re investing in.

Those enterprise deals are coming in though, he insists:

This quarter we signed one of the largest technology companies in the world as a client. We signed one of the largest manufacturing companies in the world as a client, one of the largest consulting companies in the world as a client. So we’re seeing tremendous growth there.

But all of this is coming at a price with sales and marketing expenses up 27.0% year over year to $71.2 million as the firm seeks to evangelise its big idea, while general and administration expenses rose 23.8% year over year to $25.9 million. The result was a third quarter net loss of $32,000 compared with a profit of $2.8 million a year ago, although revenue for the third quarter climbed to $178.4 million from $138.7 million year-on-year.

My take

Concur’s itinerary here is for a long haul flight and that’s going to take time to land at its final destination.

But it's a good idea that addresses a very real need so it's to be hoped that Wall Street gives it the time it needs to deliver on its vision.

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