Reed & Mackay Building North America Business with 'Steady Stream' of Clients

Reed & Mackay's Keichline discusses:

• Building talent and client growth in North America
• Investing in technology for better service outcomes
• Easing AI trepidation

It's been nearly a decade since UK-based corporate travel management company Reed & Mackay began its expansion into North America, and the TMC today still sees the market as a "huge focus" with a "lot of opportunity," Reed & Mackay North America CEO John Keichline said. That has included a significant boost in staffing in North America last year and its hiring of longtime Ovation Travel Group executive Isabel Torres as a new operations managing director for the region in recent weeks. Keichline, who has led Reed & Mackay in the region since 2018, spoke recently to BTN executive editor Michael B. Baker about growth opportunities in the region, Reed & Mackay's investment focus and changes since its 2021 acquisition by Navan, the former TripActions. An edited transcript follows.

BTN: How has Reed & Mackay's growth in North America been progressing?

John Keichline: The company started in 2015 in North America, and at the outset, it was handling UK clients that had U.S. entities. We were picking up all of our business through that. We started to get a lot of traction from clients here, U.S.-based clients, and then we started to get U.S.-based global clients, so we were repaying our colleagues who had been giving us business for several years. Then Covid hit, and that set everything on a pause. Coming out of that was a challenge that first year. Clients did not realize how quickly business was going to come back. Despite lots of conversations about a slow uptick, it ramped up very quickly, plus signing new business, and plus we had just been acquired. Over the past year, we're 30 percent larger from a staffing point of view year over year. We're continuing to add talent to the organization. We just hired Isabel Torres, so we're attracting top tier talent, someone we think is really going to help drive our growth going forward. Years ago, someone like that probably would not have joined little old Reed & Mackay U.S. We're definitely seeing a steady stream of new business, and our client retention rates are still remaining high, the 97 percent range, and our [customer satisfaction] scores are doing very well. 

BTN: Where are you seeing opportunities: From previously unmanaged clients or winning clients from other TMCs?

Keichline: It's a mix. The smaller portion of it is unmanaged. It is coming mostly from competitors, from other companies that are looking to us for the service you provide.

BTN: What type of service are you using as a selling point?

Keichline: The big thing that we're seeing is that continued need for a dedicated type of service, that high-touch service. There are a lot of things happening with technology—AI, online booking tools—and those are fantastic, and we embrace that. A big portion of even Reed & Mackay's business is done online, not just with our parent company Navan. But there's certainly that market of professional services companies, law firms, professional services firms that still want that high-touch service, and being able to continue to provide that is something we're focused on. We're not moving to that call center environment. We're staying very much about dedicated service for our clients, and we don't see that going away, especially as more complexities are coming through the travel world with things like [New Distribution Capability] and different content. Also, they're facing a lot of economic challenges, so they need more guidance, and that's what we're here to provide.

BTN: How has the acquisition by Navan changed what you can offer?

Keichline: Buying power for one—having those senior level, high-level partner relationships has helped us. That allows us to bring different value to our clients, because of that buying power. From a tech point of view, we have our own tech stack, and we continue to invest in that, but working with a company who is a disruptor and the knowledge share, speed of innovation, we've learned a lot from them. The investment was a big part as well. Coming out of the pandemic, a lot of companies had been through a very tough time. The investment they were giving us allowed us to bolster our staff and invest in our technology. Reed & Mackay has always been nimble but methodical in our thinking, and a company like Navan helps us drive that innovation more quickly sometimes, just the way that they operate. That ongoing investment that they're giving us and the financial backing really helps. It's just all about helping us to provide better services for our clients, and we can do it based on the client need. 

BTN: Were there benefits from Navan's other acquisitions?

Keichline: Those acquisitions have been a little bit different because they've integrated, whereas we remain a separate brand. The brand, the people and all the things we do are completely separate. Those were more acquisitions that helped to bolster them in other markets, but they've integrated those companies into Navan.

BTN: We've seen some big consolidation moves this year, with American Express Global Business Travel's announced acquisition of CWT and Steve Singh acquiring Direct Travel. Is there more of that to come?

Keichline: It's hard to predict. Consolidation is happening quite a bit in the TMC world, but it happens in all industries. We don't tend to worry about predicting what are competitors are going to do from a consolidation point of view. For us, it's been making sure that we've kept the value of the two companies from the time we were acquired. At the time we were acquired, the market was probably looking at us like we were eventually going to be integrated and the Reed & Mackay brand will go away, but it hasn't. We're really focused on providing that great service to bring something different to the market. Yes, of course we keep an eye on our competitors, but predicting it is almost impossible.

BTN: You mentioned ongoing work on your tech stack. What is happening with that?

Keichline: Our portal, R&M/Book, which is our booking tool, is going through a complete redesign. It will be launched in a matter of weeks. A new version will go out. Closely behind that will be a redesign of our mobile app as well.

BTN: Are you seeing in shift in client demand for different pricing models, or are you still largely transaction-based?

Keichline: It is mostly transaction-based. Clients like that and pay as you go. There are some clients who will pay a management fee, they want specifics around what we're providing and the number of people, but the transaction fee model is definitely still highly prevalent and accounts for most of our business. Coming out of the pandemic, we started to see the subscription model—that's to protect the TMC, but why would a client sign up for that? If we look at the market, we want to stay competitive. We're not necessarily the cheapest, but we want to be competitive. The pay-as-you-go model works for the market.

BTN: What will Reed & Mackay's focus be for investment: staff, technology or training, for example?

Keichline: There's certainly a lot of investment in tech, because there are lots of changes in the industry. Sustainability is becoming a big part of the industry, so how do we build or tech to support that?  We do see that while there is still that big need for the high-touch service, online is probably going to get more and more prevalent as the younger generation goes into more senior roles, and they're used to doing things on an app or online. So, we see we need to drive that and make it very convenient for the users. The people part of it is another part of the investment, and being part of Navan helped us just with things like benefits. We're a small company and our benefits being better helps us to attract and retain talent. For us, it is how do we get the best people and how do we take care of our people in the best way?

BTN: What about internal tech—not just what is forward facing to the client—and how does that kind of investment inform the trajectory in the North American market for Reed & Mackay?

We need to work and invest in our internal tech, making our people more efficient and make them want to remain working here. If we can make it really easy for a consultant to service their clients, with everything at their fingertips, they're going to like doing their job. It's a stressful job, but if you take that stress away by investing in great tech, that's going to be really important. As a company, Reed & Mackay started in the UK, they started to go global in 2015. We've seen big opportunities here in North America, and it's huge focus for the company. The UK market is still our largest, but there's a lot of opportunity here, so the investment luckily for me tends to be coming towards North America quite a bit, making sure we have the best tech, the best people and the best infrastructure to deliver the best service. If we don't, we're not going to grow. It's a big country, but it's a small community to be dealing with law firms and financial services firms, so we can't afford to get it wrong.

BTN: When you explore AI, are you looking more at internal use cases or client-facing ones?

Keichline: In the short term, it's internal. We've had a lot of discussions about that. We could provide that type of information at the fingertips of consultants, and that's where we see it coming. Navan has a tool they use for booking. We're not there yet. That's probably a long way away for us. For us, it's about how do we use AI to help our people? It's that fine balance. You don't want to scare consultants to feel like they're going to be replaced. It's very easy for people to say, "Well, no one is going to use an agent in a few years." I don't buy that. I think there will be a smaller portion of it, but the way we position it to our teams is, make yourself valuable. Make yourself indispensable and drive that service model. To help them do that, by utilizing AI and embracing it as opposed to be fearful of it, can really help us. If you think about the types of questions they get on a constant basis and all of a sudden you start to build a profile where [someone] calls a consultant, and all of that pops up: "How was your trip to Rome last time? Did you want to stay in the same hotel? Were there any restaurants you liked?" Having that information pop up can be valuable. So, I think there's a lot of opportunity internally to use AI. Let's not be afraid of it. Let's embrace it for what it can do, which is help our people be more efficient, so they are providing a better service.