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February 1, 2017

Do Incentives Change Employee Behavior?


There comes a point in every company’s infancy where their travel spend exceeds their expectations. When a company grows, there are more customers to visit and employees to travel. This can be a scary moment for the executive and finance team watching T&E spend increase and what options do you have?

      1. Unmanaged Program or Single Point of Booking: This leaves the company with little control over their employee spending and no way to completely track booking trends. As a small company this might make sense, but most will need a way to watch spending and have their employees under one booking roof. Companies then turn to onboard travel management solutions.
      2. Strict Policy Program: In the hopes of lowering costs, improve reporting, and in the long run streamline the travel process, companies bring a travel management platform to impose policy. While strict policy seems like it would lower travel costs by forcing employees in one box, this actually does the exact opposite with the platforms available in the market today.Employees feel trapped in a system that causes them frustration and a negative experience around traveling for work. When employees do not adopt the current solution in place, they find ways to use alternative sites and book outside the system. Resulting in displeased employees and a broken system.
      3. An incentivized program: But do incentives work to change employee behavior compared to unmanaged travel or strict policy.

Built to be a complete travel management, TripActions solves the challenge of high travel costs, employee experience, and reporting on the basis of incentives. The theory that incentives change employee behavior is the basis of our technology, so we sought to prove incentives work.

(Spoiler alert: they do!)

We first measured the median cost per booking when an employee chooses to save company money vs. the price otherwise. This graph is pulled from our actual customer bookings and shows that indeed, median cost is lower per trip when an employee chooses to save.

Knowing that the cost will be lower if an employee opts to save, how do you get employees to that point? The team ran a test to prove that incentives truly do affect user choice and therefore the amount of money a traveler ultimately spends per a trip. We ran a test internally and showed some customers the option to earn rewards for selecting cheaper trips, while others did not see rewards available when booking.

The median cost of when a user saw rewards was $277. Contrastingly the median cost per trip when a user’s rewards were turned off was $442. That is $165 per trip that your company could be saving.

Proving, people do spend less when given the option to earn rewards.

If incentives encourage people to chose lower rates and therefore decrease the cost per a trip, what does that look like in our actual customer savings?

2017 to date, our customers are already seeing 34% savings in the hotel bookings alone.

One of our users, Rohit will be traveling from the UK to Palo Alto, California and staying for 13 days. He originally searched for a hotel with a price tag of about $423 per night but the fair price for his search was about $312 per a night. He chose to save and booked a hotel comparable in comfort and convenience to his original search that was priced at only $192 per night.

By saving his company $2,107 throughout his stay, Rohit earned $500 in gift cards!

The more we invest in our technology, the more savings we drive for companies. Our test proves that incentives do affect employee behavior and ultimate dollars spent on a trip. Between all the business travel management options on the market today, TripActions’ incentive based program creates a win-win for the company budget and employees.

What would saving 34% mean to you, your boss, your company? Let us know in the comments below or email us at [email protected]!

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