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Communicating a specific message to a specific audience

IN-DEPTH: Oodles.com’s founder Steve Sherlock on prioritising marketing initiatives

Car rental comparison site Oodles.com is developing business via a “bottom-up” approach, where each customer is acquired profitably in the short-term.

“Bottom-up marketing approach is what we think our brand will thrive on into the future,” says Oodles.com’s Steve Sherlock.

Citing an example, he said, “Initially we had just one Rio Tinto employee making bookings via Oodles.com. Now we have literally dozens of Rio Tinto employees using the site. This was a classic bottom-up development in which we infected one person and they infected the others. If we had tried to approach Rio Tinto Head Office we would have had little or no chance.”

Sherlock, who is scheduled to speak at the forthcoming Sales and Marketing in Travel Asia Pacific conference, to be held in Sydney (November 18-19), spoke to EyeforTravel’s Ritesh Gupta about prioritising marketing initiatives. Excerpts: 

How can one look at prioritising marketing initiatives? Other than return on spend, and for how long there can be a steady stream of profit, should one also look at improving the lifetime value of the customer?

Steve Sherlock: A steady stream of profit would be nice, but right now it’s not our focus.

There are plenty of examples of companies that have not made profits, but have gone on to sell for oodles. That is the sort of trajectory we are hoping to follow, in the sense that we are investing a lot of money on R&D and building our brand, and we expect to profit from those efforts down the track.

It’s important to note, however, that our R&D is very much geared toward maximising the “lifetime value of the customer”. 

We have put a lot of work into identifying and understanding the most frequent renters and the tools they need (but are not currently getting from other providers). As a result of this research we’ve developed a unique proposition. We’ll see how we go down the track in terms of profiting from this frequent-renter positioning.

It is recommended that fully-integrated marketing with brand, conversion, retention, with a solid media mix should always be the goal. What do you think are the major obstacles in working on the same? 

Steve Sherlock: Fully-integrated media mix I think is a bit of a cliché. We try to look at it like this, if you provide a unique solution to the target audience’s problem, then build a brand synonymous with that solution, customers will come direct to your site, and hence you will enjoy a better conversion rate. Provided we keep doing that beyond our clients’ expectations, then we’ll get the retention.

Do you think companies need to understand their risk profile and strategic goals, develop marketing plans/investments in the proper priority, and encourage a culture of testing new ideas and optimising existing programmes? 

Steve Sherlock: The answer of course is ‘yes’, they need to do all of those things. How do they achieve that? Well in our case the key is never losing site of our strategic goals.

Even though it’s vital every company understands its strategic goals, I believe that if you ask most businesses to identify their goals, they will struggle to give you an answer that isn’t – at best - slightly confused. 

In our case, we want to communicate a specific message to a specific audience and this underpins our entire marketing approach. I believe that if we are consistent and disciplined with this focus, we will build a loyal group of followers. 

What is the best way to prioritise resources, be it for SEO, SEM, PR, brand marketing, social media, CRM etc?

Steve Sherlock: PR number one, social media number two and CRM number three. 

These are all brand building as far as we are concerned. 

SEO and SEM are important ways to get traffic and sales, but they often result in not very targeted users. Often SEO and SEM visitors book 1.8 times a year, whereas we actively target frequent renters, like myself - I rent over 50 times a year because I don’t own a car. 

Do you think the successful businesses of the future still need to follow the twin brand marketing strategy - i. e. with acquisition and conversion strategy throughout? 

Steve Sherlock: The most successful brands will be those that acquire a client at close to zero CPA. 

Why? Because they will have a unique proposition that can’t easily be substituted, and as a result they will build up huge followings who spread the word for them.

Marketers acknowledge that it is essential that brands are aware of and monitor conversations that are happening about them in real time, so they can understand how their customers feel and can also protect their reputation where necessary. What are you doing in this arena and what do you see as the best way to respond to such monitoring of conversations?  

Steve Sherlock: We don’t get anxious if someone wants to talk about us and not to us, because we figure there is only one thing worse than being talked about, and that’s not being talked about. So we don’t systematically track the chatter.

Having said that, we do appreciate direct dialogue and we even reward bug reports with a $20 gift voucher. Recently via twitter, for example, a client alerted us to a bug, we fixed it and sent him a voucher and he tweeted about it saying “now that’s #customerservice”.

Ultimately, at Oodles.com we look at social media like a relationship, which means we have to be accountable, adjustable and ultimately acceptable.

Sales and Marketing in Travel Asia Pacific

Steve Sherlock is scheduled to speak at the forthcoming Sales and Marketing in Travel Asia Pacific conference, to be held in Sydney (November 18-19).

For more information, click here: http://events.eyefortravel.com/smapac/agenda.asp

Or Contact:

Reece Gladstone
Regional Director, Asia-Pacific & Middle East
Email: reece@eyefortravel.co

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Expedia stresses on rate parity and inventory parity for its customers

Expedia, Inc.’s CEO and president Dara Khosrowshahi spoke about recent discussions with Choice Hotels during the online travel company’s third quarter earnings call.

“...As far as the discussions that we’ve had with Choice, we are not doing business with Choice right now on a chain basis. We don’t have a vast majority of Choice hotels on our side,” said Khosrowshahi, as per the transcript on Seeking Alpha. He declined to comment further on negotiations. 

But he added, “First of all, our primary goal is to have the broadest, deepest set and highest quality set of inventory for the benefit of our customers. And this doesn’t signal any kind of change in our overall philosophy as far as how we work with our hotel partners and what we’re looking at. It’s not really an issue of economics; it’s more than issue of our wanting rate parity and inventory parity for our customers.”

“When our customers come to Expedia, we want them to know that they’re getting the best prices and certainly, we are insistent on that. And to the extent that Choice doesn’t want to work under those terms. We won’t be doing business with each other. Those are the terms that we work with our others strategic partners, they’re comfortable where they were comfortable with it. So, its nothing usual from what I would say is typical practice for us in most of our other OTA competitors so to speak.”

“The good news for us and kind of for Expedia shareholders is that when we look at the recapture analysis, when we look at our bookings in Choice, markets versus or markets where we have Choice presence versus markets where Choice doesn’t have much of a presence, it looks like we’re recapturing the vast majority of the bookings. So, as far as the financial impact for us, it is minimum to none. And hopefully, we can get to a place where we can or put Choice on go forward basis. But right now, really is not a big deal.”

Choice not ready to “literally give up control of its inventory and pricing”

 AboutAnywhere.com applauds Choice Hotels’ stance

“Growing tension between hoteliers and OTAs”…NONSENSE!

The Prisoner’s Dilemma, the Stockholm Syndrome, or a Case of Both?

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“Travellers are clearly responding to our improving value proposition”: Expedia CEO

Online travel company Expedia Inc reported a 23 percent increase in its third-quarter profit. The company reported a profit of $117 million up from $94.8 million a year earlier.

“Travellers are clearly responding to our improving value proposition, as we broaden our fee cuts and increase the depth and breadth of our global supply,” said Dara Khosrowshahi, CEO and president of the company.

Gross bookings from Expedia, Inc.’s international businesses were $2.12 billion in the third quarter, accounting for 36 percent of worldwide bookings.

Gross bookings rose 9 percent as transactions increased 26 percent. Domestic bookings increased 8 percent and international bookings were up 11 percent. 

Hotel revenue increased 3 percent on a 27 percent rise in room nights stayed including package deals and an acquisition. Revenue per room night fell 14 percent amid lower average daily rates and traveler fees. Air revenue fell 8 percent as per-ticket revenue declined 28 percent amid the elimination of booking fees, partly offset by a 27 percent increase in tickets sold. 

“Expedia’s overall strategy remained simple. We focused on improving our traveler value proposition and we are moving barriers to purchase. We made further progress here during Q3 by broadening our fee reductions to many international points-of-sale and eliminating most of our worldwide change and cancel fees,” said Khosrowshahi.

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‘The number of consumers who can be converted from lookers to bookers is increasing’

Recent research from EyeforTravel’s soon-to-be-released European Online Travel Report found that the number of consumers who can be converted from lookers to bookers is increasing.  By 2012 the European online travel market is expected to have a value of more than €91 billion, growing at a CAGR of 11.4% 2008-2012.

All online European travel markets under review showed an increase in online sales figures, whereas offline figures for the UK, France, the Nordic region, Middle Europe, and Southern Europe have decreased.  Although offline figures for Germany increased until 2008, they are predicted to decrease substantially in the years to come. 

However, as per the findings of the first eTravel Benchmark survey in May 2009 and various EyeforTravel studies, the online travel industry as a whole has some way to go in order to compete with ‘best in breed’ companies for website engagement and customer service.

Online travel sites need to work harder at improving the entire end to end website experience if they are to build trusted, long-term relationships that encourage customers to buy from them time and time again, according to the eTravel Benchmark study.

As Vicky Brock, Highland Business Research says ‘It shouldn’t be this difficult. […] what we have found is that compared to a straight e-commerce business this [usability, analytics and conversion] has been technically far harder to achieve for the tourism businesses.’

The reasons for these levels of under achievement are multiple and Vicky Brock will be speaking about them at EyeforTravel’s Travel Technology Summit at World Travel Market 11-12 November on the session ‘Usability – Fine tune your booking path for maximum conversion’.

In an interview earlier this year, Cameron Jones, Director of Business Development EMEA, Expedia highlighted ‘Small tweaks in marketing messages/copy and relevance of placements can have enormous upside for driving incremental transactions. There is a critical list of key placements that we at the Expedia Affiliate Network know will drive conversion the minute they are implemented so we look for these when we first audit a new partner’s site.”

Brock and Jones will be joined by Eleonora Lamanna, Web Analyst & Online Functionality Manager, Hertz Europe to share best practices in usability for travel sites.  Throughout the 2 day summit speakers from KLM, Octopus Travel, TripAdvisor, TUI, Tripology. Lufthansa and more will present their views on the latest developments in e-commerce.

As 2010 looks set to show flat growth in the global travel industry overall, it’s vital the travel industry gets the basics right to achieve optimum conversion from those travellers who are looking to book.   In these times, failing to perform well is more than just a missed opportunity, it’s potentially commercial suicide. 

For more information about EyeforTravel’s European Online Travel Report contact tim@eyefortravel.com or visit http://www.eyefortravelresearch.com/reportsales/

For more information regarding EyeforTravel’s Travel Technology Summit contact gina@eyefortravel.com or visit http://events.eyefortravel.com/wtm/travel-technology-and-marketing/

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Arrange Your Exchange

ArrangeYourExchange.com, the company which allows holiday home owners to exchange mongst themselves, will be pitching at The Get Funded Show@World Travel Market this November.  Having already put in place an expert team, ArrangeYourExchange.com is looking for the funding that can turn their vision into a lucrative reality.

ArrangeYourExchange.com enables its client base to leverage their holiday home so that they can experience alternative holiday locations for a fraction of the cost compared with using traditional travel related services. This is done whilst maintaining the full benefits of owning a holiday home. It offers a cost effective way to travel to Europe and beyond through an extensive selection of available holiday homes and eliminates the ‘consumer pain’ of holidaying in the same location time and time again.

Niall Doyle, Director of ArrangeYourExchange.com spoke with Tom Ellum, Director of The Get Funded Show about some of his motivations, challenges and why he is looking forward to pitching at The Get Funded Show on 11-12th November.

Tom Ellum: Tell us a little bit about your company – what made you decide to start it?

Niall Doyle:  Having owned a holiday home in Sardinia for the past five years I had grown tired of holidaying there every year and wanted to experience new locations and cultures. However, I didn’t want to ‘waste’ the use of my holiday home by not holidaying there. So, born out of my ‘consumer pain’, I decided to develop an online holiday home exchange service that could offer flexibility and choice to holiday home owners.

ArrangeYourExchange.com was created for the 2.8million holiday home owners in Europe many of whom are tired of holidaying in the same location year after year.

TE:  When was your eureka moment, most challenging moment and most enjoyable moment?

ND:  Put simply, we’re eliminating the need for agreement between holiday home owners to exchange, and as a result have also eliminated the laborious ‘leg work’ that had previously been associated with organising an exchange.

We decided to commission independent market research focussing on what holiday home owners across Europe wanted in an exchange service. The results were very encouraging and revealed that 71% of holiday home owners would use an online holiday home exchange service with 63% prepared to use a ‘credits based’ system based on the type of holiday home, its location and when it is made available to exchange.

So we set about developing a website that recognised the needs of holiday home owners wishing to exchange their holiday homes to experience new destinations.

Unlike existing holiday home exchanges with Arrange Your Exchange, it’s not necessary for holiday home owners to agree to exchange their properties with each other – we’re developing an algorithm that allows our members to earn credits for posting availability of their holiday home before exchanging those credits for other properties without the need to directly contact the holiday home owner.

TE:  And some information about the team?

ND:  Our team comprises of myself - over ten years experience in sales & marketing – (with another five years of holiday home rental experience), along with a director in Ireland’s largest 100% Irish owned tour operator serving 45 destinations worldwide (employing over 100 staff in Ireland and over 120 staff at destinations overseas). In 2007 it had a turnover in excess of €100m.
The technology platform for Arrange Your Exchange is being developed by the computer science department of ITT, Dublin.

TE:  Why is your company set to impact the travel industry?

ND:  I think we’ll have a huge impact on the travel industry, because we’re looking after a significant consumer segment that has hitherto been unreachable or ‘lost’ to the industry. We aim to become a ‘one-stop-shop’ revolution for holiday home owners, not only offering them exchanges but also full travel solutions and services.

TE:  5 years time…what will the travel industry be like and where will your company fit in (or will you be at your holiday home in Sardinia sipping cocktails after a million dollar exit!?)?

ND:  Difficult to say with any degree of certainty where the travel industry will be in five years given the upheaval it has been through recently. My ‘hunch’ is that the anticipated economic upturn will be positively felt by the Travel Sector over the next 12-18 months. I see market segmentation continuing in Travel with the ‘winners’ being those who identify niches with significant market share and respond to the needs of that market effectively. Choice, flexibility and convenience will become the bywords for success in the industry. In a nutshell, ArrangeYourExchange equals value for money by making the exotic affordable.

TE:  What’s the most important thing you want to get out of The Get Funded Show?

ND:  A couple of things. Firstly, ‘Informed investment’. What I mean by this is working with investors who already have considerable knowledge and experience of the Travel Industry and who recognise the potential of ArrangeYourExchange. Secondly, the opportunity to ‘tap into’ that knowledge base in terms of networking and partnering in order to accelerate our development into the future.

TE:  So…top investors, senior travel executives and the world’s travel press – how are you going to make sure you stand out from the other companies pitching?

ArrangeYourExchange is a travel idea whose time has come. Rates of holiday home ownership have multiplied in recent years and can now be harnessed monetarily through our innovative online platform.  We’ll make a compelling case for investment, based on market research and market share, and we’ve the team, experience and expertise to deliver this market to the travel sector. We’re looking forward to sharing our passion for ArrangeYourExchange with travel’s leading Investors at The Get Funded Show. We anticipate getting on famously!

ArrangeYourExchange.com (www.arrangeyourexchange.com)  will be pitching to an assembled audience of senior travel executives, investors and the world’s travel press at The Get Funded Show@World Travel Market.  Organised by EyeforTravel, on 11-12th November, the show offers innovative travel companies mentoring from travel veterans, worldwide publicity and real investment opportunity.  For more information on the show please go to www.getfundedshow.com.

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Experience & variety – Speaker attributes at Sales & Marketing APAC 2009

Experience and variety are the noticeable attributes in this year’s speaker line-up at the Sales and Marketing in Travel Asia-Pacific conference. Over the next few weeks we will be profiling a selection of speakers from across the two day program (Nov 18-19th), and providing a few words on the different topics each will be dissecting.

It’s a challenging and varied cross section of industry issues that find their way onto the chopping block of discussion this year. Subsequently, the presenters need to be experts in their fields. So let their profiles speak on their behalf, and help highlight type of experience set to lead stimulate debate at what promises to be an engaging 2 day forum.

On day one Darrell Wade will be looking at the recent trend of Consumers’ distressed buying mentalities.

Darrell is the Co-founder and CEO of Intrepid Travel. During an epic journey across Africa in 1988 with a group of friends, Darrell and business partner Geoff Manchester gave birth to their idea for Intrepid. As the company has grown into an Australian and International success, Darrell and Intrepid's philosophy has remained – to provide fun and affordable travel adventures that are sustainable and beneficial to both travellers and local communities.

Adrian Currie is the Managing Director for Booking.com in Australia and New Zealand, and will be leading us through the benefits of a comprehensive affiliate marketing strategy.

Adrian opened an office for Booking.com in Sydney in 2008 to support local hotels and affiliates. Prior to this, Adrian was Chief Financial Officer of Booking.com (formed from the merger of Active Hotels and Bookings, both acquired by Priceline.com in 2004/05), who are the European market leader for online accommodation bookings.

Aileen Cobern is set to tackle the risky topic of pricing.

Aileen, GM Sales & Marketing for Choice Hotels Australasia, has been in the tourism industry for over 20 years, 16 of those with Choice Hotels.  Aileen spent a number of years with an inbound operator in the late 80’s and 90’s and commenced her career in advertising in the late 70’s with Ogilvy & Mather Advertising where she spent 10 years. With Choice Hotels, Aileen has run million dollar campaigns, participated in a global loyalty programs and has been integral to her company’s growth and competitiveness in the changing online world.

Look out for more speaker updates coming soon, or visit www.eyefortravel.com/smapac to view more profiles.

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New sales and marketing podcasts

Podcast: Hear Lee McCabe of Expedia, and Ryan Flanagan of Marriott International discuss online sales and marketing challenges and opportunities in the Asia Pacific context.

http://events.eyefortravel.com/smapac/podcasts.asp

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Lonely Planet not for sale

The BBC’s commercial arm, BBC Worldwide (BBCWW), has no plans to sell Lonely Planet.

The company officially stated this following claims in the UK national press that a sale was on the cards. 

“BBCWW has no plans to sell the highly successful Lonely Planet travel information business. It is not up for sale, full stop,” it said.

BBC Worldwide paid £90m for Lonely Planet in October 2007.

This week it also emerged that the Australian founders of Lonely Planet, Tony and Maureen Wheeler, who retained a 25 percent stake, had been allowed to extend an option they have to sell their share to the BBC. This prompted speculation that the move has been made because the Wheelers are expecting the BBC to sell Lonely Planet and they hope to buy it back for less than they sold it.

Tony Elliott, the chairman of rival travel publisher Time Out, told The Times earlier this week that he had been told by “reliable sources” that the BBC was gearing up to sell the Lonely Planet business when it completes a strategy review next year.

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Hostelworld.com introduces series of ‘How to’ travel videos

Hostelworld.com has expanded its existing video content by launching new “How to” videos.

The new videos give five tips on how to save money in the top cities around the world and will increase Hostelworld’s presence on popular “How to…” video sites such as Howcast.com, 5min.com and more. 

Currently, there are “How to” videos for London, New York, Paris, Amsterdam and Edinburgh.

The company has also introduced city postcards. These are short videos that allow viewers to catch a glimpse of the city’s top attractions, bars and restaurants in three minutes or less. These are available for Cork, Stockholm and Zurich with many more cities on the horizon early on in 2010.

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Amadeus and Rail Europe sign deal

Amadeus and Rail Europe 4A have partnered to increase the reach of Rail Europe’s European railway products.

Amadeus will connect Rail Europe’s content through its travel agency point of sale, the Amadeus Selling Platform.

The new product will be piloted with selected travel agencies in India in Q3 and it will be made available in Q4 in a number of countries in Asia Pacific, Middle East and Latin American markets. In a further phase, railways from the Asia Pacific region will also be integrated into the rail platform. 

“We are witnessing the renaissance of rail in Europe. Travellers coming to Europe are demanding more and more that rail is part of their trip,” said Diane Bouzebiba, head of Amadeus Rail.

Bouzebiba added that the partnership with Rail Europe will strive to improve travel agents access to rail content, therefore generating additional revenue opportunities and extending the level of service.

A joint venture between the French National Railways (SNCF) and the Swiss Federal Railways (SBB), Rail Europe 4A distributes and promotes European Railways products, as well as Amtrak, the US rail operator, in the 4”A”s: Asia, Australia & New Zealand, Africa & The Middle East, and South America.

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