When Montreal-based Groupe Encore began managing corporate travel for Abitibi Consolidated in 2002, the firm wasn’t exactly embraced with open arms. In fact, Abitibi’s 17,000 employees got downright defensive when they were suddenly asked to justify their travel expenses and get pre-trip approval from line managers. “When faced with massive change and greater transparency, we expect client’s employees to push back, but we keep demonstrating the benefits,” says Encore president Monique Mardinian. “Abitibi wanted a travel management firm whose expertise would make the most effective use of its travel budget, rather than a firm that simply booked tickets and rooms.”
Indeed, for most companies, corporate travel is the second or third hightest controllable expense, yet few fail to control those expenses, says Mardinian. Enter Groupe Encore. Delivering smart, personalized, cost-effective travel programs that produce bottom line savings has won Groupe Encore such blue chip clients as Cineplex Odeon, L’Oreal and Ericsson and helped grow the company’s 2004 revenue to $80 million.
Mardinian first spotted the opportunity while studying acturial science and working as a bookkeeper for a traditional travel agency in Montreal. She noticed that corporations were spending millions on business travel. “Their admin assistants and purchasing people were in charge of the travel and didn’t know anything about the business and financial side of travel,” says Mardinian. In 1987, she purchased a small, money-losing agency and began pitching to clients a more measurable approach to travel. “I knew that expertise could improve the effectiveness of their travel, save them money and make this travel agency different.” She had no collateral or real experience, but she had plenty of passion.
Unlike traditional agencies, Groupe Encore gets right into its client’s business, even placing employees on the customer’s premises. Four of the seven Encore employees dedicated to Abitibi, for example, are located in Abitibi’s headquarters. “Permanently based in the client’s office, Encore employees become the go-to travel experts and impact the company’s travel culture daily,” says Mardinian.
Encore staff monitor travel patterns and behaviour such as frequent destinations and length of stay, and provides recommendations and policies to maximize efficiency. For example, a $10,000 trip isn’t the smartest tactic if the potential ROI from the sale is just $16,000, so Encore may suggest skipping the trip. Or, if data shows a client consistently and frequently traveling to China, Encore may suggest the option of relocating an employee there fulltime to save time and money.
The firm also runs educational seminars on best travel practices and foreign country protocol training while its proprietary software system, Encore TIPS (Traveler Interactive Profile System,) provides travelers with on-line access to their trip itinerary and travel preferences as well as credit-card and passport information.
Also unique to Encore, says Mardinian, is the company’s billing structure, in which a percentage of the travel budget saved covers Encore’s fee. Over five years, says Mardinian, Encore can reduce annual travel costs by 50%.
“We are the only travel firm that puts its skin in the game,” says Mardinian. “We take all of the risk, because before we see a dime from the client, we invest in technology and hire staff, including MBAs, consultants and financial analysts, that will be dedicated to that client.”
With 12 offices in Quebec, Encore is now focused on building its presence in Ontario. In 2003, the firm acquired H.A. Maclean, a four-office travel agency based in Toronto; Mardinian plans another strategic acquisition this year. Encore recently struck a joint venture with Boston-based Barber Travel, a corporate travel specialist with 64 offices in the U.S. and Europe, which will enable Encore to offer its services throughout North America.
These should help Mardian’s long-term goal of reaching $100 million in revenue within 10 years. “‘No’ is not in our customer service vocabulary, she says, “We give them more than they know they want or need — this ensures loyalty and deepens the relationship.”
© 2005 Kara Kuryillowicz