In the shadow of the heavyweights of the CAC 40, French SMEs are hard at work, criss-crossing Europe and the world to conquer new markets. The crisis is here, of course. But unlike larger companies, small businesses have not slowed down their international expansion. "There's a real dynamism in small businesses that you don't find in very large structures."said Henri HourcadeThis is the opinion expressed by the Director of Corporate Sales and Agencies at Air France-KLM, in the latest Avexia Voyages survey on the business travel market for French SMEs and carried out in collaboration with the research firm Concomitance.
A number of figures published by INSEE illustrate this positive trend. In 2012, the combined export share of mid-sized companies (31 %), SMEs (22 %) and micro-businesses (4 %) was slightly higher than that of large companies (43 %). In this context, 45 % of SME-SMI export sales were generated both in Europe and worldwide, and 16 % exclusively outside the continent. After the Asia-Oceania zone, which attracts 30 % of these exports, Africa (29 %) and North America (26 %) are the other markets favoured by medium-sized French companies.
It's hard, however, to lump this heterogeneous mass of SMEs together under a single label. The number of employees, the corporate culture, the type of business travel... Each SME has its own profile, its own organisation and its own objectives. As a result, it is usually the volume of travel expenditure that is used by business travel professionals to classify their customers. "The notion of an SME depends on the company's business travel budget. But this budget is not necessarily proportional to its size."reminds Jérôme ForgeouxSome large companies travel very little". Generally speaking, the travel budget of small and medium-sized French companies varies between €300,000 and €3 million a year, according to a range established by the French Association of Travel Managers (AFTM) in the preamble to its white paper "Structuring Travel Management within SMEs" published last September. Across the Atlantic, the criterion for classifying these structures differs slightly, based not on the total travel budget, but on air travel alone. Small companies spend up to 2 million dollars a year, while medium-sized companies spend up to 12 million dollars.
The Low Cost Effect
In recent years, the airline sector has witnessed one of the most profound changes in the travel habits of SMEs and SMIs. The rise of low-cost airlines on the European market has rapidly won over this more flexible clientele, often in search of fare opportunities. "SMEs and SMIs generally pay a great deal of attention to cost controlunderlines François BacchettaManaging Director of easyJet France. According to the studies, we are using between 35 % and 40 % in these structures."This is a higher penetration rate than for large companies, which often have negotiated agreements with scheduled airlines. "But here too, travel policies are undergoing radical change, adds François Bacchetta. Our offers for business travellers help us to change behaviour."However, the traditional airlines are not out of the game and are resisting the interest shown by SMEs in low-cost flights. Air France, for example, is basing its offer on the Bluebiz frequent flyer programme, dedicated to small businesses with no negotiated contracts.
Among the advantages of Blue- Biz, companies can collect Blue Credits - the equivalent of miles for ordinary travellers - which can be converted into award tickets and discounts on season tickets. "It would be simplistic to present BlueBiz as a response to low cost, since the Voyageur Rewards programme, which preceded it, was launched a good ten years ago. This was at a time when low-cost airlines were not yet positioned in the business segment, and when easyJet had little presence in the French market, reminds Boris DarceauxHead of Business Markets at Air France. We use this programme as a marketing and sales tool to win the loyalty of these SMEs and SMIs who are focused on the best price, thanks to the savings generated by Blue Credits, the discounts offered on season tickets and the corporate recognition offered to these companies on the Air France-KLM network."This positioning has been rewarded with double-digit growth in the number of subscribers. In the very near future, new developments are expected to further enhance the BlueBiz programme.
In the wake of low-cost airlines, the siren song of 'best buy' is now echoing in other sectors. In the hotel industry, for example, the rise of new alternatives could well change the game. Home-stay specialist Airbnb already claims more than 10 % business travellers. And this was even before Airbnb sent out two strong signals aimed at business customers: the launch of a business portal and the conclusion of a partnership with Concur. The American giant is not alone in this niche: Morning Croissant and Magic Event have taken up the baton in the French market, targeting the corporate market from the outset, and more particularly the SME-SMI segment.
Be your own Travel Manager
These new offers are shaping new behaviours. With the advent of online booking, business travel management appears to be more decentralised than ever. Business travellers, equipped with their smartphones, can become their own travel managers, especially in smaller organisations where travel policies are less formalised. "The democratisation of tourist travel and the arrival of internet offers have transformed the relationship between the business traveller and the business trip."says the AFTM in its white paper.
Faced with these developments, what place is left for traditional market players, and in particular business travel agencies? Travel agencies seem to have retained their relevance in the SME-SMI segment. The Coach Omnium barometer notes that "Nearly eight out of ten SMEs delegate part (30 %) or all (48 %) of their business travel budget to an agency for practical reasons (45.3 %) or for reasons of cost (22 %). And when they entrust this item entirely to an agency, the latter specialises in business travel in seven cases out of ten.". The duty to protect is undeniably one of the agency's main arguments for attracting this clientele. "Our strength lies in ensuring passenger safety. It also means guaranteeing good information without forcing our corporate customers to work in a single way."insists Julien ChambertSales and Development Director at Avexia Voyages. The pivotal role played by the agency also makes sense by centralising expenditure rather than having it scattered all over the place. "If we allow travellers to book anywhere, anyhow, the risk is that we will no longer be credible when it comes to negotiations, warned Régis Chambertfounder of consultancy firm RC2, during a conference devoted to the SME market at the latest IFTM Top Resa trade fair. To save 30 euros on a hotel room on the one hand, you can lose 50,000 euros on the other under a contract that allows reductions of 10 or 20 % on travel expenses. You have to be careful."
Trusting an agency means economies of scale, but also, quite simply, saving time and energy. Using a specialised intermediary means you can delegate the time-consuming aspects of preparing trips, and above all the adjustments that need to be made in real time in the event of a strike, for example, or even a volcanic cloud...
While SMEs place their trust in agencies specialising in the SME segment - Avexia Voyages, Selectour Afat, Havas and, more recently, VoyagExpert, to name but a few - these players themselves regularly praise the attitude of their customers. "We like them a lot, particularly for their speed of decision and their ability to take risks, underlines Jordy Staelenco-founder of 3mundi. It's easier with these small and medium-sized businesses that love innovation and want to stand out from the crowd. So we can test new products and new projects."
Core target
The SME target is attractive. Today, new players are setting out to conquer a dynamic, and therefore highly competitive, market. "On the whole, key accounts are less volatile than SMEs, which are often more demanding, as they are always on the lookout for better rates and services."says Hélène MoestaHead of Corporate Sales at Opodo Corporate. Two years ago, the booking site launched its business version on the French market, demonstrating the rapprochement between the leisure and business spheres. "SMEs are our core target, and over 70 % of our customers previously used a leisure website, in this case Opodo, continues Hélène Moesta. This does not mean, however, that they did not work with an agency: this is the case for many companies which, in the absence of an exclusive contract, seek to 'challenge' their preferred intermediary in order to find a better offer.". The fare-service combination therefore remains the number 1 issue for SME travel management. This equation with several unknowns - traveller comfort, choice of service provider, monitoring of return on investment - should prompt many managers to reconsider the facts of the problem.
SMEs can also take a pragmatic approach to getting things moving within their companies: "Few things can win management's attention faster than a rising expenditure curve, and many SMEs are in this situation when it comes to business travel"summed up the journalist Jay Boehmer in the Small & Medium Enterprise report published by Business Travel News last April.
The latest American Express Small Business Barometer confirms that, for 44 % of VSE-SME managers, managing their company's finances remains the biggest challenge. To meet this challenge, payment solutions specialists are regularly working to adapt their offering to meet changing demand. "SMEs and key accounts alike are now managing all categories of expenditure, including indirect or strategic purchasing, which is something that VSEs have been looking at for some time, note Christophe BrouttierVice President, Professional Cards and Small Businesses at American Express. But today, some very small businesses, particularly in the medical sector, are getting in on the act."Backed by its strategic position at the centre of gravity of the cardholder-merchant-supplier triangle, last year American Express renewed its commercial partnership with Air France through a corporate payment card co-branded with the BlueBiz loyalty programme.
Control and optimisation
New products are regularly added to the catalogue of payment solutions offered to SMEs. The launch of Ticket Travel Pro last September provides a new response to the quest for budget optimisation and control expressed by SME-SMI managers, while in early 2015 BNP Paribas will be launching a dedicated mid-market payment card, which will optimise ticketing payments while providing accurate expense reporting.
Depending on its profile and objectives, an SME-SMI needs to choose the management system best suited to its travel habits by identifying the right partners, as well as the key contacts in-house. Because the key to managing a travel budget effectively is to carry out an in-depth (re)organisation, which should lead to a clear path being mapped out. In the absence of the budgets needed to create a dedicated post, the appointment - and training - of a "travel advisor" appears to be one of the priorities highlighted by the AFTM. In addition, the introduction of a corporate travel policy (PVE) is a must. However, the maturity of SME-SMIs varies considerably from one study to another. According to Coach Omnium, 80 % of SMEs had such a policy in 2012. Conversely, Julien Chambert, Director of Sales & Development at Avexia Voyages, believes that "barely 15 % of SMEs have a formalised EVP documented in our tools. In our experience, many SMEs have internal travel policies that are not formalised. Few travellers travel, but when they do, they look at the cost. A travel policy takes on its full value in larger SMEs. And the larger the company, the greater the need for and use of the EVP.". Growing: for so many small businesses, this is precisely what business travel is all about. That's why it's so important to develop a mature approach to travel.
