Customer Focus : Why the online travel space is not with it, mostly

This post is NOT a rant, but something that highlighted how difficult it is to really understand the business you're in, and serve the needs of the customer, not what you think you should be selling!

A short story, to start with (Mine)
I've recently gotten involved with The Tour of Nilgiris as a volunteer to help organize the 09 edition. This year, one major focus area is to up the level of accommodation provided to the riders and support team, as compared to the previous edition. Being a little connected to the startup world, I thought it might be a good opportunity to provide some startups an opportunity to showcase themselves, and the difference they can make.

The target audience, in this particular instance, is just perfect : upwardly mobile, made-it-in-life audience willing to pay for convenience, travels, is adventurous, and usually, invariably online (which is otherwise a big pain point for Indian startups trying to get to the right TG).

So, I dashed out a couple of mails to startups I thought might be interested and able to help out with the request.

The brief : we're 90 ppl and need to book acco for each day of the tour (7 nights). Promised to provide publicity for both the hotel as well as the hotel-partner (TFNs gotten a huge number of enthusiasts and media support, and thats growing all the time) and need very competitive pricing (provided rates we'd and a end-to-end solution in return.

Guess what ?

Startup 1: Got lost in the "response" process! :) Auto genearted mail, with a ticket number and everything, and a couple of SMSes confirming that someone was looking at the same! No real responses though - at all!

Startup 2: Personal email to a couple of the guys running the show. Got responses. In a couple of days, mails with rates that were actually worse than what we managed ourselves. Re-emphasized that we wanted an end to end solution, and that with a certain %age of costs shaved they'd be the hospitality partners - included in all communication. The response was astounding - I was given some soundbytes on how, instead of the usual 10%, we were being charged only 5% by the startup over the hotel's rates. That, as you can imagine, was that!

Thr trouble is, the users are looking to travel for a purpose, and the journey/hotel is one piece of the whole experience. They want to be assured of a certain quality and wants a no-hassle experience. And all thats on offer is inventory, with some lip gloss on top by way of an interface, and possibly sorted by this or that.

What about the guy who want to fly to Delhi from Madurai and may be open to combination of either a bus+flight or a train+flight ? From either Chennai or Bangalore. What about the NRI-in-India-for-a-month traveling to 3-4 destinations who'd hire a car, a cell, take a couple of domestic flights, perhaps a holiday to some destination while here, maybe even love to have a data card ?

Your users are looking for very different things. Playing "agent" for a ticket trasaction, or a hotel reservation, is hardly what I'd call sticky, or a customer delight strategy. What is the value that you're creating ? For OTAs - and there are almost as many as airlines - its even fuzzier these days without a deal or discount. Not long term at all, I'd imagine.

And please do not talk to me about the reduction in your cut as a benefit - I really could not care less about that!

6 comments:

Santosh said...

"What about the guy who want to fly to Delhi from Madurai and may be open to combination of either a bus+flight or a train+flight ? From either Chennai or Bangalore. What about the NRI-in-India-for-a-month traveling to 3-4 destinations who'd hire a car, a cell, take a couple of domestic flights, perhaps a holiday to some destination while here, maybe even love to have a data card ?"
this market is pretty much a big part of the tourism industry and there are plenty players in this market. although mostly inbound nowadays Indian tourists are taking up their services too. it does not cater to medium budget travelers cos it is not viable as a business. here is a huge add-on margin for expertise, knowledge, time and expereince; the travel consultant requires to plan a highly customised itinerary.
data card available for travelers - well the mobile companies have to open up this market - our government has some crazyass laws rules to get this worked out.

"And please do not talk to me about the reduction in your cut as a benefit - I really could not care less about that!"

it works this way - if u call a hotel or similar and ask for rates for a 90 people group - on negotiations, they will give u a discounted rate that a travel agent or similar will get. it is just business for them wherever it comes from. it does not happen the same way for FIT's though. now how will the TA offer more competitive prices. he will have to add on his margins for the effort and the logistics of working out the booking for u. there is value to the services one offers right? and if he is a good guy - he will be to offer u stuff that as a tourist or a traveler u will be unable to find.
i wish this world can live on barter system and voluntary work - truth of the matter is that - we have created a measuring tool - MONEY! and the damn thing is unforgiving and we think we cannot live without it.. specially us folks who drive a car, use a mobile phone, carry a laptop and drink fizzy coffee from the machines. and beleive that a TEK 3700 is better than a BSA.

sameer said...

@Santosh

The gist of the argument : if you're a startup, you cannot behave like a large company and hide behind a model/processes when you come across opportunity. You have to be agile, think how you might delight the customer.

The currency I'd offered them was a large TG which they would have been chasing otherwise, publicity for their hotels. I'm sure they could've made *some* difference - knowing their industry better than the average guy (hopefully).

If there's not value add - there isn't much need for that startup at all - right ?

And honestly, why would a guy whose main intention is to book a hotel conveniently be impressed by how low their margins are over what the hotel is offering ? Its the value in terms of the kind of place, some kind of rating/assurance if thay can provide that, and the final price that finally determine whether they'll continue using these add-on services, or simply do their own thing.

Santosh said...

if ur a start-up u cannot get the rates u want - u will end up spending from ur pocket. our markets here are about who is offering the best deal(large percentage of customers).
and like i said for those who are willing to spend(which is a small share of the market, almost nothing) - there is no end to solutions - there are tonnes out there..
TG audience is a momentary thing with such events.
for the hotels it is all about business - TA or EMC is just a means for business..
anyways - i am working on something similar here - www.getoffplaces.com it pretty much should answer the questions and the need-gap.

sameer said...

I will not claim to understand your industry (yet :)). All I do know is customer focus does not come out of seeing the way things work and trying to sit somewhere in there. The OTAs and online aggregators are essentially playing go-betweens - and rather than merely aggregate the trick may lie in providing additional value. There are a gazillion gaps in the entire chain (that I can see and sense as an end user) and the guy who services those first will start making a difference. I'm sure as doer-in-chief for GetOff - you understand clearly what it is that you have that a generic travel agency does not.

Information (and its mere aggregation) is becoming commodity quite rapidly. Its gotta be used in a way that creates a certain plus for the user. Could be convenience, or cost saved, or a combination, or even just something that makes it cooler, or more fun, or adventurous. Not easy - but the easy ones are all taken - and startups are not done because what they're doing is easy....

Santosh said...

i understand.. i have been checking out other operators and new initiatives. very hollow efforts.
everyone wants to find the easy way out..

vinesh said...

Your blog is very nice... i like your blog ....

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