FEATURE SME SECTOR
IT’S AN unavoidable truth that size does matter. Try as they might, a small or medium-sized business cannot achieve the discounts offered to their larger counterparts from the supply chain. And arguably, that is only fair. The supply chain and intermediaries,
however, are falling over themselves to woo this lucrative market segment because what SMEs lack in spend they make up for in sheer numbers. There are some 5.2 million businesses
in the UK with less than 250 employees. They are the engine that drives the UK economy and will drive the future world economy (see panel, p40). A hotel supplier, for example, will strive
to secure a good spread of different sized corporate clients – and mix of
whereas SMEs are more flexible, open to ideas and can be managed more easily so you can bring real value to them.”
Defining an SME There is no typical SME account and they can vary in size from a tiny tech start-up with just a few employees to firms with 500 staff. By annual travel spend they could be categorised as under £3million, £500,000 or as low as £50,000. What unites them is lack of resource,
cash flow constraints, no dedicated travel manager, unmanaged or lightly managed travel spend, no centralised mandated programme and often no TMC, preferring to book direct. They are, effectively, Managed Travel 2.0 adopters, without the label or the intention. The consumerisation of business travel
has put SMEs in the driving seat as they are familiar with booking their own travel and communicating with suppliers. It underlines the seismic shift in marketing and communications from B2B to B2C. “Suppliers and intermediaries have to
convince the traveller and not the buyer,” says Torsten Kriedt of BCD’s consultancy arm, Advito. Furthermore, cloud-based technology
has leveled the playing field between different sized corporates, with low-entry access to automated systems.
Corporate insight Jann Thompson is global travel manager EMEA at Liberty Global, the world’s largest international cable company. Thompson remembers struggling as an SME in 2000, trying to secure deals. “I had come from a large company so
rates too – rather than rely on fewer, larger corporates. An SME is invaluable to the supply chain. “There are more £1million accounts out
there than £10million accounts,” says Warren Dix, director of sales & marketing at Hillgate Travel. “And we’d rather have ten £1million SME accounts than one £10million account. The larger clients can be demanding and give you headaches,
I knew what deals were out there so it was frustrating,” she recalls. “Suppliers said, ‘sorry, you haven’t got enough volume’, even though we were using London-Amsterdam flights like a bus. Thank God for BA On Business and KLM's Blue Business schemes!” Today, Thompson rewards suppliers
who offered deals 15 years ago, such as Accor Hotels, but she’s still frustrated as in some of the 14 countries that Liberty operates in the business is still an SME. ➔
THE BUSINESS TRAVEL MAGAZINE 35
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