Account Profitability Discussion CBTG October 24, 2013.

Account ProfitabilityDiscussion

CBTGOctober 24, 2013

Balboa Travel’s Structure

Strategic Solutions

Group

Account Management

Vendor Relations / Air, Hotel, Ground SME’s

Sales Support / Proposal WritersMarketing

Communications’

Team

Balboa Travel Breakdown for Profitability Review Monthly/Quarterly

• Level 1 Air sales over $4M annually• Level 2 $500K-$4M• Level 3 Under $500K

Tiered level based on air sales & transactions

Online adoption level percentage

Resources required

Top performers overall based on profit per transaction

By account managers’ portfolios

Accounts within the first 6 months of the contracted period (whether new or renewed)

Targets per Transaction Income

Expense

Profit: Account management - the bottom line

% of Income (point of sale, overrides, commissions)

% of Air Sales

Other?

What drives the biggest impact for your agency? • Top 10 accounts? Top 20? • Review the middle third of your accounts as a comparison

ACCOUNT NETAMT NETTRX INCOME PER

TRX EXPENSE PER TRX

DIRECT MARGIN

DIRECT % OF INCOME

DIRECT % OF AIR SALES

DIRECT MARGIN /

TRX

GROSS MARGIN

% OF INCOME

% OF AIR

SALES

ADOPTION %

Short Form for high level analysis

Long Form for drill down Accuracy in allocations Problem areas or spikes / Impacts of new vendor programs Areas for future revenue opportunities Best practices / Upsell / Account management incentives

SALES BREAKDOWN

AIR AMT AIR TRX EXC AMT EXCH TRX REF AMT REF TRX VD AMT VD TRX NONAIR AMT NONAIR TRX

SOURCE BREAKDOWN

AGT TRX AGT AMT TOUCHED

TRX TOUCHED

AMT UNTOUCHED

TRX UNTOUCHED

AMT

TTL ONLINE

TRX

DOM/INTL

DOM AMT DOM TRX INTL AMT INTL TRX

TRAVEL TYPE BREAKDOWN

CORP AMT CORP TRX LEIS AMT LEIS TRX

MTG AMT MTG TRX

TOTAL SALES BOOKINGS

NETAMT NETTRX HTL BKGS CAR BKGS

Client Profitability AnalysisMonthly/Quarterly

PROFITABILITY

DIRECT MARGIN DIRECT % OF

INCOMEDIRECT % OF AIR

SALESDIRECT MARGIN /

TRX GROSS MARGIN % OF INCOME

% OF AIR SALES

ADOPTION %

EXPENSE BREAKDOWN

GDS EXP SB FEES 24HR SVC AGT LBR PRODUCT SOL TKTING / QUALITY

DATA SOL ACCT MGMT TOTAL

EXPENSE EXPENSE PER

TRX

INCOME BREAKDOWN

AIR COMM OTH COMM HTL COMM CAR COMM OVRD INCOME PER

TRX FEE INC SEG INC TTL INCOME

Client Profitability AnalysisMonthly/Quarterly

Long Term Clients

Considerations on Lower Profit Accounts

High Profile ClientsHigh Transaction

Clients Easy

Meeting & Group Travel

Right Vendor/GDS Mix

Right Geographical Area

Longer Contract Period

Incremental income vs. infrastructure

© 2013 Chambers Travel Group

Account ProfitabilityCBTG24 October 2013


Name of who is presenting - Date

10

Senior Management Finance

Commercial Department

Business Management

Who, When, What & How

WHO



11

• Finance, responsible for producing;− Daily Trading Figures

• Turnover / Volume / FE Income / Income per Transaction− Monthly Sales & Earnings Reports by Customer (Month & YTD

• Turnover / Volume / FE Income Fees, Comms & Markups− Produce monthly internal and Qtrly Client based Management Fee

Reconciliations• Senior Management, review

− Daily Figures on email• Week back view in Weekly Mgmt meeting

− Monthly review of Client Sales & Earnings lead by DOBM• Business Management, review

− Monthly Sales & Earnings by customer− Produce periodic Profitability Summary (Qtrly, Annually)− Present each month at SM meeting on portfolio

• Commercial− Advise on changes in supplier income and preferred suppliers

WHO



Customer base

12

Preferred Suppliers

Opportunity

National/Multi-

National

Turnover & Volume

Strategic>£750K

SME<£750K



• Based on trading 01.09.12 – 31.08.13

Categorisation Split

13

SME Strategic SME Strategic

Sum of Full Year Trading

0.253288390162286 0.746711609837715

Sum Total In-come

0.253839038800887 0.746160961199113

Income as % of Turnover

0.0770273914304627 0.0768036180400272

# Clients 167 42

5.00%

25.00%

45.00%

65.00%

10

50

90

130

170



Categorisation

14

Segment Turnover £ Categorisation

StrategicMulti-National AA>£2M A£751K - £2M B

SME

£501K - £750K C£251K - £500K D£50K - £250K E<£50K E-Touch



15

Customer base - Split

<£50K per annum

£50K to £250k per

annum

£251K - £500K per

annum

£501K - £750K per

annum£751K - £2M per annum

>£2M per annum

MN Client

Customer Segmentation SME STRATEGICCategory Name E-Touch E D C B A AA

Number of Managed Customers 71 58 26 11 17 9 16% of Total Customers 34% 28% 13% 5% 8% 4% 8%

Apx Annualised Turnover of Category £1,724,331 £6,318,826 £8,447,538 £6,905,859 £20,198,464 £33,078,706 £15,895,686

% of Total Customer Turnover 2% 7% 9% 7% 22% 36% 17%Apx Annualised FE Income £111,633 £459,929 £584,740 £630,328 £1,631,441 £2,587,911 £1,159,489% of Total Customer Income 2% 6% 8% 9% 23% 36% 16%% Gross FE Income to Turnover 6.47% 7.28% 6.92% 9.13% 8.08% 7.82% 7.29%

80% Income comes from 20% of the Customer base



16

AnnualRe-Price & Re-

Sign

Daily

Daily Figures

Quarterly

Reconciliation & Review

MonthlySales &

Earnings by Customers Rpt


WHEN



17

BE IncomeOverrides, GDS Sector Credits

FE IncomePOS Fees,

Mgmt Fee Inv, Comms, MarkUps

Profile

Mix and use of Preferred Suppliers


WHAT



18

Monthly Sales & Earnings Report



19

WHEN & WHAT



20

Net Margin

2%

Total Gross Margin Target

12%

BE MarginTarget

3%


HOW



21

Customer Analysis (example)



22

When the pain is OK

Long Term Clients

Brand / NameHigh Transaction

Clients Easy

Meeting & Group Travel

Supplier / GDS Mix

Right Geographical Area

Longer Contract Period

Incremental income vs. infrastructure


Thank You

Account Profitability Discussion CBTG October 24, 2013.

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Transcript of Account Profitability Discussion CBTG October 24, 2013.