To "win the hearts and minds" of the North American market, travel booking and expense management provider KDS is taking an unconventional approach to growing its business, CEO Dean Forbes last month told The Beat.
"Any law for building a fast-growing [software-as-a-service] company will tell you that the companies that grow fast do that by spending nearly 40 percent on sales and marketing," Forbes said. "That won't be true for us in North America. More than 50 percent of spend in North America will go to looking after clients."
For KDS, looking after customers means investing in the hiring of customer service and account managers. Forbes credited KDS general manager of the Americas Mike Concannon for suggesting the alternative approach following his appointment earlier this year.
"It took us a few iterations to get through this principle of, if we serve customers better than anyone else we can grow faster than if we sold to more customers than anyone else," Forbes said. "It doesn't mean we care less about customers in the rest of the world, but that's what we're hearing here [in North America]__we're not hearing that so much in Europe."
Forbes said the market has shown a willingness to conduct business with companies that focus on customer service. Several companies have expressed to The Beat dissatisfaction with service quality and efficiency from one of the United States' largest online booking players, Concur Technologies, and concerns about the effect SAP's proposed acquisition of Concur will have on service.
While KDS is a major player in Europe, in America it's an "emerging challenger," Forbes said. But KDS hopes to gain ground in the United States by partnering with "selective" travel management companies that share a similar "innovative, forward-thinking and entrepreneurial mindset," Concannon said in August.
Following a partnership agreement with Travel and Transport announced in August, Forbes claimed KDS in October signed a new U.S.-based TMC partner, the identity of which he said KDS would reveal at the end of November. KDS since 2013 has partnered with Carlson Wagonlit Travel through a similar agreement.
Competing With A New Concur
While IBM's retirement of its Global Expense Reporting Solutions tool presented KDS an opportunity to enter the North American market, SAP's potential acquisition of Concur won't affect KDS, Forbes claimed. "I don't think it makes a big difference," he said of the SAP-Concur deal.
Clients who prefer to standardize their technology with their enterprise resource planning systems were "always difficult customers" for KDS, as the company is not part of a larger company that offers an ERP solution, Forbes explained. KDS has at times has been the topic of acquisition rumors, but Forbes said the company prizes its independence.
"Our independence is an absolute strength for us, and it's something I've fought hard to protect over the last three years I've been with this company," Forbes continued. "Remaining agnostic and independent allows us to take a role with a customer that few others [can] take."
Independence has come at a price, Forbes admitted, as KDS has had to decline incentives from suppliers in exchange for preferring specific providers. However, "for anyone who doesn't fall into what's actually quite a small community of radical SAP fans, we're going to be a more natural choice," he said. "There are a group of customers who are SAP wall-to-wall radicals and don't want anything else. They were never great customers for us."
Likewise, when asked whether KDS's relationship with SAP would be affected, Forbes reiterated he didn't think it would change. "We have a lot of customers using SAP, including Shell, which might be our largest global travel customer in terms of countries deployed," he continued. "We do a lot of work with SAP to make sure our integration is as good as our customers need it to be, and that is driven by customer requirement."
As a whole, the Concur acquisition is good for the industry as it raises the profile of T&E applications, according to Forbes. "That customer understands that they're spending 6 percent to 8 percent of [revenue] on T&E ... but committing them to action and the necessary investments to do it is sometimes a challenge," Forbes said. "[The acquisition] brings the SAAS discussion back and puts T&E back on the minds of people. It's great for awareness."
Some travelers who seek a seamless and efficient trip experience have resorted to using consumer mobile travel apps for booking without travel manager awareness or consent. Many travelers and travel managers desire an all-encompassing "Holy Grail app" that will allow travelers to perform such tasks as easily booking every aspect of a trip, making changes in case of disruptions, viewing itineraries, checking corporate card balances and executing expense reports on the go, as well as capturing all data regardless of the source and tracking travelers for duty-of-care purposes.
Who will be responsible for building this one-stop app?
While Forbes agreed this hypothetical app needs to be built, he was unsure of who would step up with the needed resources to do so, much less exactly how or when it would happen.
"[This] one app will have to be super-usable for the traveler to divorce the eight things they use, and 'super-usable' is the enemy of corporate policy, duty of care, all the back-office and information the TMC needs," he said. "Super-usable and those things don't easily go together.
"If [KDS] creates it__which we will, actually__to make it great, we have to make choices that have to be controversial to some of my business partners."
The corporate travel industry has progressed, according to Forbes, by individual companies that have tried to balance moving their businesses forward while not upsetting their partners. However, to progress further, Forbes said, the industry in the future will have to be more decisive.
As an example, Forbes said some TMCs may require ground transportation content to filter through their back offices in a specific manner. After potential months of discussions with KDS to find a solution and get such content to the TMC in a suitable manner, the traveler is "pressing the life out of Uber," Forbes said.
"This is where I can just put Google content into every KDS Neo timeline," Forbes explained. "The traveler is happy with it, and the travel manager will live with it, but I'll probably lose some friends in TMCs, but that's one example of how we'll get to a workable, highly usable, fully integrated app."
Additionally, KDS partners with SnapCar, an Uber-like on-demand car service for business travelers that operates in France and has plans to expand to other markets. SnapCar co-founder Yves Weisselberger also is the founder of KDS. SnapCar's other co-founder, Dave Ashton, previously worked for KDS.
"It's just one example to get to things corporations want," Forbes said. "We'll do it, but there will be some discontent."