Connecting People to Spark Industrywide Change
This article was originally published on LinkedIn.
In the air travel industry, debit memos are a big, expensive problem.
Debit memos occur when an airline believes a travel agency has not paid the correct fare for an airline transaction. Essentially, debit memos are a surprise bill an agency receives after buying a ticket for one of their clients.
As you might imagine, this is not the easiest subject matter to discuss — debit memos can be contentious, and it’s not uncommon to experience disagreement and frustration throughout the resolution process. So bringing dozens of people into one room to work through issues and pain points surrounding debit memos might sound like a recipe for disaster.
Thankfully, ARC’s Debit Memo Working Group (DMWG) takes the challenge in stride. The DMWG is a place where truly collaborative, impactful work happens: Members of this group leverage their differences to enhance understanding, solve problems and even build camaraderie, ultimately discovering opportunities that benefit the entire industry.
The Debit Memo Working Group consists of more than 80 individuals representing airlines, travel agencies, global distribution systems (GDSs), technology providers and other organizations throughout the air travel industry, including ARC. Each member of the DMWG comes to the table with unique perspectives, organizational goals and challenges related to debit memos.
The group has collaborated for more than five years to achieve two major industry milestones: standard debit memo reason codes and the newly published best practices for debit memos. Here’s how the DMWG made those milestones a reality — and how other organizations and working groups can generate their own momentum to spark big change.
Find a Common Goal
In a room full of individuals from a variety of organizations large and small, there are plenty of things we don’t all agree on. To create real progress, it’s essential to discover what we have in common — to focus on our shared experience and a mutual goal.
The members of the DMWG can agree on one thing: Life would be better without debit memos.
Debit memos take time and resources for all parties to research and process. There’s a lot of back-and-forth communication, and sometimes the process can be drawn out over weeks, months or even years. Airlines prefer to be paid up front, and travel agencies prefer to charge their customers the correct fare upon booking. Debit memos create uncertainty and complexity, two risks any business would like to mitigate.
As a result, we have a shared goal of reducing the amount of debit memos in our industry. We may not be able to eliminate them all, but there are plenty of ways to reduce the frustration, deliver more clarity and enhance understanding among all participants. This is where we can make a difference.
Determine High-Impact Opportunities
With more than 225 airlines and 12,000 travel agency locations doing business together through ARC — each organization with its own internal processes and personnel handling debit memos — the debit memo environment is complex. When we get together as a group, we focus our efforts on opportunities with a high impact that will benefit the industry as a whole.
Since the group’s inception, the DMWG has prioritized the need for industrywide standardization and clarity. If the DMWG could establish a consistent language for the reasons debit memos were issued, travel agencies and airlines could increase efficiency, communicate more clearly, and ultimately resolve debit memos faster. This would also give agencies better insight into their most common reasons for debit memos and help them improve.
After months of concentrated effort, the first list of standardized debit memo reason codes was published in March 2016 — followed by their implementation in ARC’s debit memo tools, Memo Manager and Memo Analyzer, which are used by thousands of agencies and hundreds of airlines.
Following this achievement, the group agreed that the processes around debit memos could be better defined, so the DMWG began work on a set of best practices for the industry. After many meetings and workshops, the DMWG voted to approve those new best practices in December 2017, and ARC recently published them for industrywide use.
Now, as we look to the future, we’re prioritizing our next steps based on their potential to reduce debit memo volume. At our last meeting in October, we closed out the day by gathering ideas for initiatives that could reduce debit memos by at least 10 percent, which could represent as much as $12 million in unexpected costs for agencies and lost revenue for airlines.
Collaborate, Listen, Repeat
These initiatives were by no means simple to develop or implement. For both the standard reason codes and the best practices, we held many conference calls, small-group workshops and large-group collaborative sessions. Through these forums, we exchange ideas; propose solutions; revise, rework and repeat until we come up with a set of solutions that the group can collectively get behind.
This is where the DMWG really shines. The members of this group have an ability to engage in honest conversations on somewhat heated topics — while actively listening and showing an incredible amount of respect. We won’t agree 100 percent on every best practice or initiative, but we’re making progress together.
One of ARC’s greatest strengths is its ability to connect people throughout our industry to do impactful work together — and as a result of the DMWG’s collaboration, we’re already seeing a reduction of several memo types, as well as better awareness of how to avoid memos altogether. Our ongoing mission remains to decrease the amount of memos in the industry, creating a brighter future for all of us.
To see the latest work of the Debit Memo Working Group, check out our Best Practices for Effective Debit Memo Resolution and Prevention, which outlines suggestions for travel agencies, airlines, GDSs and ARC to create a more efficient debit memo environment. To learn more about the Debit Memo Working Group and its ongoing work, click here.