Elçim Öneç İrem Cemre Sorguç Christina Nungesser Merve Akay
Bus 462/e-commerce Final Report
Contents: 1. Introduction & Background 2. Communication Through Blogs 3. Business Model of Airbnb 4. How Airbnb works in 5 steps 5. Unique Value Propositions of Airbnb 6. Revenue Model 7. Airbnb as CRM 8. Hootsuite & Twilio 9. E-Service Quality Dimensions 10.Recovery Dimensions 11. Purchase Funnel 12.Conclusion
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1. Introduction & Background Airbnb.com is a website/service that provides people to list, discover and rent hostel. Airbnb operates in an online marketplace where they connect renters and hosts and facilitates a transaction between them. Before the establishment of the company, founders of Airbnb rented out their airbeds to strangers and they recognized that the idea can be converted into a business. The project was turned down by famous venture capitalists however they insisted on this idea. Long story short, they became quite successful. Currently, Airbnb provides services more than 191 countries with almost 2 million listings worldwide. Statistics show us that people tend to spend more money if they stay in Airbnb accommodations instead of a common hotel room.
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Source: “http://www.copypress.com/images/interactives/airbnb�
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2. Promotion & Communication Through Other Channels Airbnb created a blog for people who want to get more information about the company. Aside from economic impacts, Airbnb shares facts about achievements of the company and interesting stories of their customers. Also they created a website for ‘nerds’ who likes to code, through this website people can learn about the system, contribute Airbnb by joining their open source activities and even find a job as a data scientist or a web developer.
Sources: http://nerds.airbnb.com/ http://blog.airbnb.com/wp-content/uploads/2015/09/Airbnb-Summer-Travel-Report-1.pdf http://blog.airbnb.com/economic-impact-airbnb/
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3. Business Model of Airbnb
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Hosts:
Hosts who own a property and want to earn some money by renting out their available room/space. They have to create a listing for their property on Airbnb and add property details then set a check-in, check-out time. They can accept or reject a booking after reading the reviews of other hosts or travelers after going through their social profiles.
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Travelers:
Travelers book the listed available rooms/spaces from hosts and they have the option to filter properties according to rent prices, offered amenities, location etc. All the payments are controlled by Airbnb.
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Freelance Photographers:
Airbnb has a vast network of freelance photographers in all major cities of the world who go to a location and click high-definition photographs of the property. They are paid by Airbnb directly.
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Simplfied System of Airbnb
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4. How Airbnb works in 5 steps: 1. Hosts create a profile and add profile details such as pricing and features of room/space. 2. Airbnb sends a professional photographer to hosts place. 3. Travelers browse the portal for a property. 4. Traveler books the place and pays the rent amount to Airbnb. 5. Host approves the booking and after the traveler leaves the property and Airbnb sends the remaining amount after deducting the commission.
!!! After these transactions, hosts and travelers rate each other which forms the backbone of the whole system.
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5. Unique Value Propositions of Airbnb Hosts can rent out their spaces/houses without business structures such as bureaucracy or government approval. It is very easy to create a profile for property and Airbnb provides insurance for hosts. Also payment system of Airbnb protects hosts against fraud, all property photoshoots are free and hosts can see the entire profile of travelers in detail.
As for travelers, they can stay in unique accommodations such as; castles, yachts and tree houses. Accommodations are relatively cheap compared to hotel rooms, and they can stay with locals if they want. This option eliminates ‘mediocre traveling’ since travelers can get involved with local cultures of other countries.
Reviews of other travelers are actually guiding people to the best property in the area that they want to stay. These transactions are not simple as they seem, Airbnb backups the structure with help of other CRM systems like Hootsuite and Twilio.
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6. Revenue Model This point answers the question, how Airbnb makes money. The company earns its revenue both from hosts and guests: Hosts have to give 10% commission to Airbnb upon every booking. Airbnb charges 3% of the booking sum as transaction fee, which works like a commission, from travelers upon every booking.
7. Airbnb as a CRM Airbnb’s platform, website, mobile and social media are a complete unity with reference to CRM. The brand Airbnb had been effectually building a relationship with its users using CRM. Following some examples are given: Firstly Airbnbs mobile app is a solution to customer-facing process as it helps travellers and hosts to book and upload barrier-free. Moreover the brand using double opt in login. After the double opt-in confirmation, the system automatically sends a welcome mail with proposed occassions and activities convenient to the booked accommodation respectively the city the guest will stay in. Airbnb uses personalization to make the customer satisfied. Another important point is the customer service. Airbnb has hundrets of employees available in every time zone, in more than 30 languages, whether on chat, phone or email and 24 hours, 7 day a week. Furthermore the website navigation is very userfriendly.
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8. Hootsuite & Twilio Last but not least Airbnb is understanding customer behavior better by using multiple CRM software. Following, two CRM tools are introduced: The first one is Twilio. Basically travelers send a booking request via the platform to the hosts who have 32 hours to answer, which means accept or decline the request. Sometimes hosts are not available on their computer und can’t respond in this time. Before Twilio the customer service called the hosts and let them know that they have to respond. Twilio solves this problem as it provides automate mobile communication via SMS between hosts and travellers. The host receives a text message automatically with all information about the guest and the requiered time/accommodation and can answer with a text message easily. The tool has increased the number of effective bookings. Furthermore the user is more satisfied and the tool increased the user experience for potential guests by getting responds quicker. The second tool used by Airbnb is HootSuite, a social media monitoring tool. Most of the customers use social media to interact with the brand and with the help of HootSuite, Airbnb connects with the customers in real time, learn more about customer behaviour and can use this information for strategies in the future. So all the user information via the social media like Facebook, Twitter or Instagram, for example user posts, comments and pictures coming into the system which manage and redact this information. With means of this tool, Airbnb creates strategies and social campaigns and use the user-generated content for this campaigns. It helps to create relationships and a community around the brand.
Sources: https://hootsuite.com/resources/case-study/using-social-media-for-global-growth-the-airbnb-story https://www.twilio.com/customers/stories/airbnb
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9. E-Service Quality Dimensions ✨ Core Dimensions 1. Efficiency
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This site makes it easy to find what I need with just filling in the required destination and time and number of guests, after that there is an overview site with all available accommodations in the required time with prices, opportunities to filter and a map. After that Airbnb easily guides you through the detailed pages (more to that in transaction process?)
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It makes it easy to get anywhere on the site, intuitive menu navigation It enables me to complete a transaction quickly, If the user’s already registered, the booking is quite easy with less clicks. Also there is the opportunity to look for the lightning symbol, to book more quickly
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Information at this site is well organized, every site (overview, detail) is similar structured
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It loads its pages fast, 1-3 seconds
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This site is simple to use.
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This site enables me to get on to it quickly.
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This site is well organized.
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Issues of Airbnb can be seen through Downdetector.com Slide 13
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2. System Availability
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Always available for business. Guests can make reservation 7/24 and hosts can display their houses or rooms anytime they want.
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Launches and runs right away. When guests make reservation their reservation
If you are booking Airbnb the request sent to a host and a host is required to confirm your booking a few things: ✨ Adding your payment information. ✨ Your request to be accepted by the host. ( But if you booked an Instant Booking feature your reservation will be accepted immediately.) ✨ When a host accepts your request, depending on your email notifications and account settings from Airbnb, you receive a text message and instant message.
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Website doesn't crash. According to downdetector.com the website only crashed for 4 times in 2016 till now and these crashes 57% in checkout and 42% in website. “Downdetector tracks and shows the real-time overview of service interruptions, current issues and outages of websites, mobile applications other providers.”
Source: http://downdetector.com/status/airbnb
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3. Fulfillment Truthful about offerings, airbnb.com secures both guests and hosts. Guests could refer to the profile of the host and guest reviews and verified phone number or connect to social media to find a reference. If guests want to see more, they may want to verify the complete profile before making their reservation or can try to find homeowners who are a strong reputation on Airbnb. In addition, read the description of the hosts to avoid surprises, reading everything he wrote about the record in facilities and home rules. Verified profile: While using airbnb.com users need a verified profile. But how they verify this information? Once a user signs up to airbnb.com they get an e-mail from the website. When user clicks on the link that airbnb.com send website verify the users email. When a user wants to make a booking via airbnb.com the site requires the user to make telephone number verification. User writes his/her telephone number than airbnb.com sends a code to the users cell phone. Once the user enters this code to website airbnb.com verify user’s telephone number. After these verifications user could both display his/her property and make bookings.
4. Privacy
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Doesn’t share customer’s personal information. It protects the information that it has.
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Protects information about my credit card.
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10. Recovery Dimensions 1. Responsiveness Reviews are a way for Airbnb guests and hosts to share their experiences with the community. Any attempt to use reviews to force a user to do something they aren’t obligated to do is a misuse of reviews, and we don’t allow it. This also means that:
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Guests are not allowed to threaten to use reviews or ratings in an attempt to force a host to provide refunds, additional compensation, or a reciprocal positive review.
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Hosts are not allowed to require a guest to leave a positive review or rating, or to revise a review in exchange for a partial or full refund, or reciprocal review. The host also cannot offer a free or discounted stay in exchange for a guest revising an existing review.
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If a guest contacts a host with a problem, the host should make every effort to resolve it. The host can't ask the guest to take specific actions related to a review in exchange for the resolution of the problem. After the issue is fixed, a host may ask the guest to leave a positive review or rating. A host may also ask a guest to revise a negative review provided certain time constraints are met.
Whether you're a guest or host, make sure you follow these guidelines. If you don't, your account may be restricted, suspended, or terminated. By posting a review, you agree to follow the Airbnb guidelines and policies that Airbnb may enforce at our sole discretion.
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2. Compensation What to expect if a host reports damages If your host makes a damage declaration, here’s the process that will be followed:
✨ airbnb.com ask for documentation from the host, and as soon as we receive it, we'll ask them to contact you through Resolution Center to discuss the claim. If your host sends you a request, you'll be notified by email and through an alert on your Dashboard.
✨ Reply to your host's request in the Resolution Center within 48 hours. Your response will depend on whether or not you agree to the amount requested by the host: ✨ Agree to the amount: Click Accept in the Resolution Center. We'll process your payment and send it to your host, which usually takes 5 to 7 business days. ✨ Don't agree to the amount: Click Involve Airbnb in the Resolution Center and let us know why you think your host's claim is invalid. We'll contact you and give you 48 hours to respond to us so we can mediate. In any case, we'll make sure you and your host is represented fairly and gathers any details and documentation needed to reach a resolution. Most security deposit claims will be resolved within one week. 3. Contact There is a resolution center to connect both host and guest and let them solve their problem. The Resolution Center lets you request or send money for things related to your Airbnb trip. Asking for help from Airbnb; If you’re unable to make an agreement, you can ask Airbnb to make the final decision, 72 hours after the request was opened. To involve Airbnb: 1 Wait 72 hours after you open the request 2 Go to www.airbnb.com/resolutions 3 Select the correct reservation 4 Click Involve Airbnb When you involve Airbnb, our team will be notified and a dedicated team member will be assigned to your case. They’ll review the information provided by you and your host or guest, before making a final decision. In some cases, we may need to contact you to gather additional information, before we can make a decision.
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11. Purchase Funnel Purchasing Funnel is a model which describes the theoretical customer journey towards the purchase of a product or service. Basically, Airbnb has a matured digital marketing strategy which goal it is to, of course firstly, get new customers and secondly, position a fresh, peer-to- peer vacation website that spread their marketplace service throughout the world via creativity (‘Travel with us through the online world of Vacation Rentals’). There are 5 steps for this model and we can list them such as; 1. Awareness: People can be made aware of your brand with or without the desire to purchase. Airbnb is using different six ways for awareness. Firstly, it has a Google rating system. When the customers search anything about word which Airbnb determined, Google will show the Airbnb in the first line. It’s a search engine method. Secondly there is a special blogs whose link is blog.airbnb.com for Airbnb. It’s a content marketing. Airbnb also invest in Google display advertising with banner ad campaigns including images from actual housing being offered on their site. This allowed Airbnb to attract international traffic (does affect the brand recognition of the user). In addition, Airbnb’s marketing strategy extends to social media, where it embraces visual marketing to attract fans. For instance, Airbnb has a Facebook, Instagram, Twitter and YouTube account. Facebook, Instagram and Twitter are doing same job which is posting promotions and user-generated photos that it curates from its hosts and guests but its YouTube channel is home to global content like a TV spot, “Interning at Airbnb,” and “The Making of the Airbnb iPhone App.”
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2. Consideration: It’s for deciding between the most likely purchases and there are several ways. We can list them such as;
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Personalization via storytelling, communication with the user through the website
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Personalized offers with mean by the Facebook connection (get to know the customer/guest better and offer him/her the accommodations he/she is looking for)
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Authentic reviews from guests AND hosts
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Host can decide if he/she accepts administration!
Incentives for Guests: ‘Invite a friend’-Coupons
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3. Transaction Process: When the customers entered Airbnb’s website, they will face with welcome-page and there is fill in part for required destination, time and amount of people who are going to stay. After click the search button. Customers will skip to overview part. All the available accommodations in the required time are shown. There is an opportunity to filter, e.g. price limit, type of accommodation and there is a map which shows where the accommodations are stayed exactly in the required area/city. Then the user clicks on a photo of a specific accommodation. After this part, there will be detailed accommodation part. After clicking on a specific accommodation the user will get detailed information to this accommodation on a separate, detailed accommodation site (included reviews, photos, opportunity to see information about the host and to book the accommodation for the required time).For booking the user clicks the ‘Request for book’ button and site will offer to login or sign up site for transferring. After create or enter the account, customers will face with payment part. They will fill in all the payment and credit card information. On the right there is a summary of the required order. Continue with ‘Continue’-Button. The user will be charged if the request is accepted by the host. They will have 24 hours to accept or decline and the guest will be informed via e-mail.
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4. Loyalty: Airbnb is using social media actively to keep in touch with the customer. It creates a strong relationship between Airbnb and customers. Most of the people is already looking this confidence before they do any transaction on the internet. Airbnb has also a rating system for the hosts and travelers. With these rates, they think to make a good decision. Choosing the best one is important for both sides. Airbnb had been successfully creating a relationship with its customers by CRM from the new customers to the regular users. CRM is important because great customer service starts with making it easy for your customers to find, understand and transaction with you. Customers are caring to take receipt to show service which they take. So customers have a confidence about the legal perspectives. They can see all the information in this part such as travel destination, accommodation address, travel property, accommodation type and night. Also they are offering the insurance to keep hosts house and travelers stuff safe. This insurance is creating a confidence between hosts and traveler. Due to this insurance, most of people is using this platform again and again.
5. Advocacy: It depends on the pleasure. If the customers are happy about the service, they will be happy to support, recommend and even promote Airbnb with which they have built a relationship and internalized a sense of loyalty. According the searching results, 90% of people report believing brand recommendations from friends, so those advocates becomes a very powerful resource. According to this data, Airbnb is already using word of mouth system. Hosts are suggesting Airbnb for friends to take more money and travelers are already offering Airbnb for cheap holiday options.
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12. Conclusion 20 million people used Airbnb since it was founded in 2008. The platform offers an authentic holiday experience and clear the way for the tourism. The principles are flexibility, authenticity and personalization – unique private accommodations instead of a four star hotel. Advantages for the traveler are the cheap options to travel, to stay with local hosts in their private flat or house and the feeling of traveling apart from the stereotype way of touristic traveling by individual and to be part of the daily live in a city and its inhabitants. The hosts benefit from the platform as well as they can easily rent their private rooms or houses without commercial structures. Hosts as well as guests cash in on the Airbnb infrastructure especially the payment and booking transaction via the platform and not directly between hosts and travelers. In addition to that the site is well-structured and well-organized and provides a good user experience and is userfriendly so that the users will experience a good user journey through the website. But on the other hand there are some critical points mentioned as well. The supposed private hosts not only rent their private flats or houses but renting out apartments whose primary purpose it is to be rented out to tourists. So Airbnb more and more take a turn to a commercial structured platform and this fact causes problems regarding the housing market in big cities. The rents getting higher and higher in big cities like Berlin, New York or Barcelona and complete flats detract from the housing market. And the advantage for the travelers to live in unique private accommodations is not given as well. The mentioned cities already tighten their law respectively to that. Therefore it is more difficult to advertise an apartment via Airbnb and communes work with certifications to ensure that hosts pay taxes on their revenue.
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