Shopping around for the cheapest fares at the last minute isn’t the most effective way for SMEs to get the most from their travel budgets.
Unlike large corporates, which can leverage their substantial global buying power to negotiate travel deals with airlines, small and medium business have limited scope to stretch their spend, says Paolo De Renzis, Head of Sales for British Airways across the Middle East, Africa and Central Asia.
Their travel needs also differ. Global research that British Airways commissioned across fast-growing markets such as India and China and established economies like the United States and United Kingdom shows that SMEs think short-term and are always looking for the best deal. They crave flexibility.
“This is almost the antithesis of the typical airline offering,” explains Paolo De Renzis. “Airlines want to encourage early booking, so they can fill flights. They discourage changes, particularly on discounted fares, as this makes booking patterns more predictable.”
As a consequence, SMEs, which shop around for the cheapest fares at the eleventh hour and are then penalised if they need to change bookings, can end up paying over the odds for travel.
“It’s understandably frustrating, particularly if you’re a dynamic company, wanting to conclude deals, open up new markets or extend a visit to a trade show to sign up some new business,” continues Mr De Renzis.
Although British Airways had traditionally considered the corporate market the mainstay of its business sales, some years ago it began to realise the potential of the SME market. This was particularly manifest in fast-growing economies, where companies seeking to expand into new markets needed to travel more.
“In many cases we already had the ideal on-board product, in World Traveller Plus, our premium economy cabin, which appeals to business travellers whose budget doesn’t stretch to Club World. What we didn’t have was a viable commercial offering, so SMEs kept wasting money on last-minute travel and we kept missing opportunities.”
The solution the airline came up with was On Business. The programme rewards companies for their loyalty, while taking into account some of the particular needs of SMEs. More recently, based on the feedback from customers, it fine-tuned the programme to make it more user-friendly to this growing and increasingly important customer base.
The new programme has been made more flexible so members who want immediate savings can choose an upfront discount off flights, if they consider this a better option than collecting points for redemption flights.
It has also been simplified. Rather than points being awarded for distance flown, every time an On Business member makes a booking they earns points on the spend. An online account-management tool enables members to maximise the potential of the programme and effectively use accumulated points. It can be configured to provide customised reports, enabling members to track who is earning where and when.
Points can be used for cabin upgrades or special offers. They can also be used up to one day before travel to make date and time changes to redemption flights.
On Business now works across British Airways, American Airlines and Iberia, allowing members to collect and spend on all three carriers. It works in parallel with the Executive Club, British Airways’ loyalty programme for frequent flyers, so on a single flight both the company and the individual traveller could accumulate rewards towards redemption flights.
De Renzis argues that the programme delivers real bottom-line benefits to businesses, citing the GBP 30 million a year on flights that the On Business programme has already saved customers.
“On Business is designed to deliver a loyalty dividend, which over time should enable businesses to achieve savings that would not be possible by last minute shopping around for the cheapest fares,” he says.