SMEs remain an untapped market in Europe

More than 99 per cent of European businesses are SMEs, yet the vast majority plan to change telecoms service provider at the end of their contract period, according to research published recently. The message is that the SME sector represents an enormous opportunity for CSPs to grow their revenues – but it is an opportunity they are not taking.

B/OSS specialist Comarch commissioned analyst firm Telesperience to examine what European SMEs think about telecoms services, with 298 European SMEs responding to the study.

The key finding was a surprisingly low level of loyalty among SMEs, with 80 per cent of the respondents planning to change service provider at the end of their contract period for a variety of reasons.

The main factors that annoy most are poor service quality; the inability of CSPs to resolve problems quickly and effectively; lack of clear pricing and well-designed tariff plans; as well as inaccurate charges.

Comarch said this is a worrying finding given that CSPs are seeking to increase spending from the SME sector. According to the research, 100 per cent of European providers see the SME sector as a growth opportunity, with 56 per cent seeing it as a significant growth opportunity.

However, 89 per cent admit they are currently not fully meeting the needs of SMEs, and 44 per cent say that SMEs have substantial unmet needs.

Part of the problem is that service providers have not segmented their customer bases enough to know which users are SMEs, and as a result, only around 44 per cent of providers have programmes that explicitly target them.

Operators should take note that low price is only rated as the fourth most important attribute out of six when selecting a service provider, with service availability, quality and tariff plans rated as more important. The ability to have itemised and archived bills and spending controls are more important. And clear pricing is the most important pricing and bundling feature with unified communications the most appealing value-added service for European SMEs.

Interestingly, the average EU business has six employees and 2.3 communications service providers, but many of the European SMEs that Telesperience spoke to said they would like to have a single supplier of telecoms services, which represents a great opportunity for CSPs to increase the amount of money SMEs are spending with them by taking revenue from rivals.

The main message from this research is that CSPs need to ensure they get basic operational processes and features right as these are often the ones that SMEs value most.

Consolidating SME spending is a significant opportunity, but successfully doing so requires CSPs to understand the dynamics of the SME market in different EU countries, as well as the needs of individual vertical sectors.

Download the full report here