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Guest Post: Understanding the value of SME loyalty programmes

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Guest Post: Understanding the value of SME loyalty programmes

Reap repeat business, financial benefits and personalised rewards, says Natalia Kalinowska, company director, Comarch UK

Big businesses are adept at managing their travel. Travel managers, agents and personal assistants will search and book travel plans. And because of the budgets they have to spend, airlines deploy dedicated account managers to look after and engage with these large companies.

SMEs, however, don’t have the same budgets or resources in order to have the same dedicated individual in house and the airlines or big hotel groups cannot justify assigning dedicated account managers to manage them. SMEs are less likely to have a clear strategy for business travel.

A significant number (70% of UK SMEs) use Travel Management Companies (TMCs), according to Corporate Travel Management’s Stuart Birkin. Others might let employees book travel themselves, either with an airline that will earn them personal rewards, or finding the cheapest deal on any carrier. There’s no incentive for the business to be loyal to a single airline.

Given that SMEs account for 99.9% of businesses in the UK, the airlines are increasingly recognising the need to engage with this channel.

SMEs still travel during a downturn

A tough economy is the time when big businesses cut back on travel. But our experience shows that the smaller business segment is more robust during a recession and, due to the enormously diverse type of business they conduct, the level of travel doesn’t fall away as much as the major corporations when times are tough.

That means they’re a sales channel that airlines and hotel groups need to take seriously and engage with to encourage loyalty to a single brand, rather than leaving them to just shop around for the cheapest deals.

Creating an SME loyalty scheme

SME owners are always going to be more careful with their spending than bigger businesses. But as with any firm, financial cost isn’t the only factor to consider. There’s also the human cost.

While business travel can be rewarding, it isn’t necessarily a perk – particularly if you’re travelling the cheapest way possible. It can be hugely stressful. You’re away from home for extended periods of time, and often exhausted from the journey. It can be a significant time out of the business – and associated cost to the business – if you can’t work effectively while you’re away.

Creating a programme that makes the journey a bit smoother and the experience less stressful needn’t cost a fortune, and it can make the world of difference to a smaller business that needs its key people to keep in touch. Things like letting people check in with a wearable device, identifying their preferences quickly by analysing their data and offering them the room on their preferred floor, or remembering their meal preferences all help ease the journey, and make the trip more productive for the business overall.

Offering the business points towards future travel (or upgrades for more senior people) means that not only is the travel experience positive for the individual, but the business gets a financial reward too. That could mean the difference between booking with an airline that offers the cheapest seats right now, and the one that gives the business the best value and service over a longer period of time.

Create loyalty, not just repeat business

Understanding the difference between loyalty and repeat business is important. Research has found that repeat business is often the result of apathy rather than loyalty. Loyalty is about more than just points – it’s about the whole experience, from comforts that make travelling more pleasant, to offering personalised services. Things that are simple to do, and incredibly effective.

Airlines are creating great SME schemes

Airlines are starting to realise the benefit of courting SMEs. OnBusiness, the loyalty scheme of British Airways and Iberia, tailors its benefits to SMEs. The benefits are specifically designed to help growing companies make the most out of their budget. In addition, to British Airways and Iberia, customers can also collect and use points on American Airlines. OnBusiness points can be exchanged for flights or seat upgrades (which the scheme administrator can give as a perk to their employees). Administrators can also manage their company travel using a simple online tool that tracks who is earning points and where, so no one misses out. Employees continue to earn their individual air miles so no one misses out.

Skybonus is a SME scheme operated by Delta, Air France, KLM and Alitalia, which offers the traditional points for flights and upgrades in addition to exchanging points for smaller comforts like drinks and headsets.

Working with TMCs

SMEs don’t just use TMCs to save time when booking their travel. They use them to find the best deal around. That should include the best loyalty schemes. Working with the TMCs so that they understand the benefits of different loyalty schemes mean that if the TMC is tasked with finding a good deal on travel, they’ll take into account all the benefits to the business, not just the most immediate cost saving.

A great loyalty programme will generate repeat business for the travel company, financial benefits for the SME, and personalised rewards for the individual. Just because market conditions are tough, it doesn’t mean business travel has to be, too.

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