Customer captivity is difficult to create with customers who can just click around to find a substitute product or a cheaper price. The online travel business is a classic example of customers made disloyal through brutal competitive pricing and thousands of ways a traveler can get information and book trips.
In a recent interview, Stephen Kaufer, President and CEO of
Innovation through customization
Giving users personalized results is key to customer captivity. Kaufer explains why via the example of recommending a hotel. Without customization, the overall #1 hotel in New York City, for example, would be shown was shown as the #1 hotel no matter who you were, no matter where you lived, no matter what your preferences were; that hotel had the best reviews so it earned the #1 spot. “I would look at that hotel and say, hey I’ve no doubt that it is a great hotel, but it is the right hotel for me?”
TripAdvisor’s software can help to answer this question because it knows a lot about bookings and knows either a little or a lot about the person booking. From the booking perspective, even if the traveler has never visited the site before, the software knows where the traveler is located because it can map a computer to a country. “So if you are an Italian that can make a difference in terms of what hotel we choose to recommend, because Italians love this particular neighborhood or love this particular hotel based upon the reviews that we have. And that’s if I know absolutely nothing about you.”
“But usually, I know something about you, because I’ve seen what other hotels and what other cities and what you’ve done on the site in previous sessions. So now based upon your past browsing behavior, I can change my sort and say, the best hotel in NY is ranked just for you as #1. The overall ranking is #8. By showing you #8 first because of your past browsing experience, the site looks like it has made a better match.” TripAdvisor’s platform can then explain why it picked the property it did, and then gives the traveler options to add even more information about preferences that might not be so obvious from browsing history, like preference for boutique hotels. “And so without you doing anything in some cases or by explicit action in other cases, we are turning the one-size-fits all order to be a personalized just-for-you order.”
Customization works to bring in more revenue to TripAdvisor in the long term through customer loyalty. “Why do people come back to TripAdvisor?. Well, because we really did a good job helping them plan their last trip. So if we really are able to put the right hotel in front of you and let you have a better vacation, and you are nice enough to give TripAdvisor some credit for helping you find that hotel, then you are more likely to come back to TripAdvisor for the next trip.”
Acquisition to improve the customer experience
TripAdvisor has cooperative arrangements with almost every kind of company in the travel space – including attractions and restaurant reservation platforms. So with those partnerships working so well, why would you buy the cow when you can get the milk for a (much smaller) fee?
“TripAdvisor is arguably already the site where the world goes to figure out what to do when they are traveling, “ says Kaufer. “So being able to integrate the capability of looking at and then booking various tours and activities is a natural thing to want to do while on TripAdvisor.” In fact, because TripAdvisor, unlike some of the online travel agencies, has a tremendous amount of information that is valuable once on the trip, travelers use the app over the extended time of traveling for deep engagement with the traveler.
Kaufer says that before they bought Viator which books visitors into attractions, “We only had a light weight integration. We didn’t have what I as the consumer wanted. I visited Madrid with my family last spring. I wanted to take them on a Segway tour, I had never done that before. I could look on TripAdvisor, there were five different Segway tours. One was bookable online, but four others weren’t. And I had to call them up. It wasn’t a fun experience.”
By purchasing Viator, TripAdvisor expects that the experience in the future to be different, where the times, tours and prices are compared on line, and then the visitor can make the booking.
“By investing in that business, combining it with the traffic we already have of people looking for things to do, we think we can really help consumers not only figure out what to do, but to make their reservations in advance if they want to.”
Restaurant bookings grow the business in scope
In purchasing two restaurant review and booking sites -- lafourchette based in Paris and the Dutch Iens -- Kaufer says that TripAdvisor is investing in a business category that is not only a good one on its own, but one that increases functionality for the TripAdvisor platform.
“So, if you live in Paris you use lafourchette to make your reservations. If you live in Istanbul, what do you use? Well, there is kind of nobody in Istanbul. Hmmmm. That’s an open market opportunity for a product category that we feel is a winner. And so rather than start from scratch, we purchased lafourchette and have given them expansion objectives into markets that don’t have anyone serving their markets now.”
The company “put together a swat team here to do a nice integration for the TripAdvisor traveler.” Kaufer says that because “we own both sides of the integration, it was pretty quick and straight forward to make a compelling integration to leverage the TripAdvisor traffic.”
Two additional acquisitions were made by TripAdvisor in the last year-- Vacation Home Rentals and TripBod.
This is the second article based on an interview with TripAdvisor President and CEO Stephen Kaufer. The first is TripAdvisor Mobile Strategy: Forget Ads On Those Tiny Screens, Instead Optimize For Clicks And Commissions
