Three tips to cut costs on business travel for your sales team
After a pandemic confinement period, your sales team's trips to win over customers in faraway places have become a day-to-day routine. Business travel has regained momentum and has undoubtedly contributed significantly to strengthening your customer base. Now you can find an ideal customer on the other side of the world.
But here's the dilemma: to increase company revenues, you need your sales team to pursue these high-value clients, and that entails travel expenses —airline tickets, client dinners, transportation, and various other costs. These corporate trips and their associated expenses are responsible for some of the largest cash outflows in your company.
However, fret not! In this blog, we give you the keys to keeping your sales team's travel expenses under control. Follow these three practical strategies that will enable you to optimize costs, maximize benefits, and maintain your company's financial balance. Ready to embark on this journey of savings?
Identify Travel and Entertainment (T&E) expenses
Before we dive into the best strategies for saving on your sales team's travel expenses, it's vital to understand what these T&E expenses (Travel and Entertainment) actually entail. Here's a simple way to explain it to you..
Imagine your sales team conquering the world, seeking out those valuable clients. T&E expenses encompass all the costs incurred during these corporate trips. They can be expenses made by your team using corporate credit cards, company cards, or even their own money (later reimbursed). These expenses cover a wide range of items, such as airfares, accommodations, meals, transportation, and everything necessary during your employees' stays at their destinations.
Here's the reality: T&E expenses often rank as the second-largest expense in a company. Yes, they are that significant! So when it comes time to cut corporate spending, it is crucial to take measures to control and optimize travel-related expenses. This is where travel and expense management services come into play, helping you establish tighter expense policies, reimbursement conditions, and ensuring compliance with regulations.
What is a Travel and Expense Management System?
Before delving into how to reduce your sales team's travel expenses, let me explain what a Travel and Expense Management System is.
Imagine having a powerful tool that efficiently manages your sales team's travel expenses. That's precisely what such a system does. It not only associates these expenses with costs but also with growth. Let me explain why.
While globalization and the internet have expanded our reach, they have also limited human interaction in many ways. In this era where capturing your clients' attention is the greatest challenge, relying on your sales team to sell through emails and phone calls puts them at a disadvantage. In-person meetings are crucial for your team to close deals effectively with prospects.
When your sales team travels to meet a potential client, it demonstrates determination and perseverance, leading to higher conversion rates compared to telephonic communication.
Now, broadly reducing T&E expenses can be a risky step. Excellent travel and expense management services identify corporate T&E expenses that contribute to growth and consistently track them through concrete data analysis.
How to reduce your sales team's T&E Expenses?
Now comes the interesting part. As you seek to reduce T&E expenses, you must focus on finding ways to trim them without affecting revenue-generating travel opportunities.
1. Free your salespeople to sell
Did you know that your sales team spends 65% of their time on low-priority tasks instead of selling? Instead of converting valuable prospects into customers, they deal with tasks like filing travel and expense reports, and remembering to keep hundreds of small receipts for reimbursement.
When your sales team spends more time manually handling tasks that can be easily automated, you essentially pay them for tasks that do not generate revenue or growth.
Let your sales team focus on what they do best and automate these secondary tasks using expense management software like Tribal Travel, which provides corporate cards for travel expense control and automated travel and expense reports. Eliminate the additional burden of keeping physical receipts by utilizing digital receipt capture technology.
2. Establish proactive expense controls and monitor transactions in real time
You may have a well-established expense policy, but you need to ensure your managers stay informed about your sales team's expenses to enforce it effectively. The problem is that expenses often take an average of 6 to 8 weeks to be processed for reimbursement. That's too long! You don't want to discover policy violations after the expenses have already been incurred.
Who benefits from this? Certainly not you or your company. What you need is real-time updates on your sales team's expenses to control unnecessary spending as it happens. Imagine having a system that provides you instant information on your salespeople's transactions. That would be fantastic!
With a T&E corporate card like Tribal Travel, you can set expense categories to ensure your employees don't make any unauthorized expenses. Additionally, you can monitor transactions in real time, keeping you aware of expenses as they occur. This allows you to take immediate action if you notice any inappropriate or excessive spending.
3. Reward revenue, not spending
Here's an interesting idea to change focus and motivate your sales team differently. Instead of letting them use their personal credit cards and enjoy benefits and rewards for spending more, why not incentivize them to spend within reasonable limits and reward them based on the revenue they generate?
Think about it: rather than encouraging them to spend as much as possible for reward points, you can set revenue goals and provide bonuses to your team when they achieve them. This way, they will be motivated to focus on generating more revenue and closing successful deals rather than overspending.
Imagine the satisfaction of your sales team when they see their efforts and performance translate into additional bonuses. It will be a great incentive for them to strive even harder and achieve outstanding results!
Reducing your sales team's travel expenses not only leads to significant financial savings but also allows you to optimize resources, maximize benefits, and maintain a strong financial balance in your company. By following the above advice, you are on the right track towards efficient T&E expense management.
Remember the importance of identifying T&E expenses, implementing an appropriate travel and expense management system, and fostering a culture of control and financial accountability in your team. By doing so, you will reduce costs and create an environment where your sales team can thrive and achieve higher revenue goals.