YCombinator Demo Day Observations

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I had a chance to attend YCombinator’s (“YC”) Demo Day — where the latest batch of 36 YC startups present for 2 1/2 minutes to a broad spectrum of investors.

• It was nice to see so many of the startups had secured 1 or more key clients. This is where the YC brand and the YC team can set crucial introductions.
• If memory serves me right, only 1 of the companies had 1 founder. Everybody had 2 or more. When I ran my own online travel agency, I was the only CXO for a very long time and that was a mistake. We have a company we’re looking to invest in and a key roadblock is it’s a 1 man show and that’s concerning when we’re putting in $500k.
• Is it a feature or a company? I took to the companies that solved a problem that made me want to signup and pay for them on the spot. AdGrok, HireHive, PagerDuty, Brushes. Others had nice offerings and solved simple pain points but not deep enough pain points for me to actually pay for the service even after discounting the fact that they’re early stage companies. I won’t pick on them them here but I wish them well.
• Notable absent any B2B or B2C Facebook related companies. I would have thought at least 1 or 2 of the 36 would have something on the FB platform. It’s hardly one you can ignore and certainly not without it’s risk.

• It was nice to see women founders. This wouldn’t have come to mind had I not thought about it after reading blog comments on a TechCrunch post asking “how many of the YC companies had women co-founders?” — there were a few.
• Interesting how many of the founders had Harvard, Columbia,  MIT, Stanford degrees. Equally notable that a few had ‘dropped out’  to pursue their dreams. ‘Dropping out’ just means ‘taking a year of’ and resuming if the startup fails but at least they did it. It’s not easy to quite the PhD program at MIT to pursue a startup.
• Notable how many startups had experience at larger & more established companies. Being part of the industry you are now trying to disrupt is something we look for when investing.
• “If you remember one thing about my company, it’s _______” was a stable part of the presentation.
• The founders did a good job of working the room after the presentations were over. Kudos to getting out there and striking up a conversation with investors — who aren’t the easiest bunch to deal with since guess what, we get pitched all the time and have our guards up.
• It was quite a varied bunch of investors. Individual investors, angel groups, university related angel groups, early stage funds, super angels, VC’s, celebrity investors and media/press. Made for an interesting cast of characters in the room.
• Notable how many of the startups were profitable. They offered a product or service somebody paid for; usually a few hundred people (sometimes a few thousand) paid for. Which in turn raised their valuation and likelihood of getting funded. Gone are the day of slaving away for months and months without a profit.
• It was a good mix of B2C, B2B and mobile applications. No one sector dominated which kept the presentations interesting.
• I attended the 3rd and final batch of presentations and undoubtedly the companies used the first two batches to polish themselves up.

Applications this time include: disposable social networks, site metrics, restaurant tablets, travel search, mobile TV apps, child tracking, email context, mobile app promotion, job interview software, tablet games, file syncing, non-virtual goods, social motivation, apartment search, SEO tools, grocery price search, sports chat, tablet paint software, project management, service provider hubs, memorial sites, eyetracking, glanceable displays, SEM software, Twitter follower management, tablet productivity software, enterprise Q&A, outsourced sysadmin, a new inbox, a financial dashboard for businesses, geolocal chat, server notifications, and debt management.

Travel Startup Founders from Outside the Industry

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As an investor in travel companies — from private beta travel startups to larger VC & travel growth equity deals — I am fortunate to talk to travel companies of all sizes from all corners of the world.

One common theme are travel startup co-founders who do not come from the travel industry who reach an invisible ceiling when dealing with travel suppliers, reservation systems and members of the trade.

Foremost, If you find yourself in this situation, don’t feel bad. You’re not alone. That’s just the way it is. It won’t change anytime soon.  Heck, I wouldn’t have a job if it was that easy! Took me 12 years in travel (on the agency and travel technology side) to get a feeling for how things truly work and even now I learn new things by virtue of the seasoned executives I work with.

Secondly, there is nothing wrong with this situation. It’s what you do about it that I have an issue with.

How to Fix The Problem

• Going It Alone: The Worst Thing To Do. There are outliers who do it alone but they are so few and far between that they’re not worth mentioning. The majority (in my experience circa 95% of) shouldn’t. The ones I’ve seen — and I can’t name them or I would — are because they are so different that traditional travel suppliers are willing to give it a shot  and these companies almost always have a very strong ‘IN’. While the founders may not be from the industry, they engaged somebody with some industry gray hair on their behalf. Rarely is it a ‘cold call’ into a supplier. Somebody new to the travel game going at it alone doesn’t have a chance past some fluke wins and never enough to have a sustainable business model. Ask for help, it’s natural

• Get Good Advisors from the Travel Industry. Former travel executives, former travel company operators, somebody who has already done what you’re trying to do; who can advise you with your strategy and business development.  Somebody hands on through till the deal is completed. Not just an introduction and you’re on your own.  I’m biased but ask any travel startup whether I’m right. It would be one thing if “Going At It Alone” was only 2 or 3 times harder but my experience show it’s considerably longer. 7 to 10 times harder. That’s a lot of time and money to spend hitting your head against the wall — assuming you have the time and money to spare — which no travel startup ever does. All the while other travel startups are popping up every week.

• Mashup with other travel startups/Web 2.0 Company API’s. Don’t have your own reservation system to pull flights from, what about using the Kayak API. What about a travel affiliate program in lieu of your own relationships. You won’t make alot of $ but you’ll have something to show your clients. Unfortunately this strategy won’t work because you’re selling what’s already out there. If you’re selling the same fares as everybody else, do you expect alot of transactions? You’re just keeping up appearances to avoid gaping holes on your site.  You’ll almost always need deep integration deployments which most affiliates programs don’t offer. It’s a viable interim solution. Travel startups use API mashups because they’re  (a) not concentrating on revenue or (b) as a stop gap measure until professional industrial grade travel technology (booking engines, GDS links, etc..) are available. You’ll need a proper travel technology platform if you intend on building a sustainable business.

• Use Free or Open Source Data. You can get valuable content from Wikipedia.org to WikiTravel to a variety of places for free or for a low cost. Many travel startups already do if you take a deeper look. They have a core set of unique features complemented by 3rd party API’s (Google, Kayak, IAN, etc..). Panaramio is a good example. There are some good services out there I would use as an interim solution.

• Do a Round to Hire A Travel Executive. This is a tough proposition. Most investors ‘don’t get’ travel investments. Be prepared for a lot of hand holding, a lot of ‘educating’, a reduced valuation and little in terms of productive post-investment relationships. While an investor “who knows somebody at Expedia” is better than nothing, knowing the contact is 1 thing — actually talking the talk in a way a travel supplier will understand is something only a travel industry executive can do best. Is that investor going to be with you every step of the way for the next 4-6 months it takes to close a deal? It can be done  – don’t get me wrong — but when you’re at a travel startup you don’t have the time to ‘experiment’ and no investor is going to put up with ‘trial by error’ on their dime.  Many a founder has realized money isn’t enough. You need domain expertise. At an angel investment level I think “non-travel” investors should be avoided unless they’re fine with putting in the money and hiring “travel experts” to formally guide the company. Being a “travel investor”, I am biased, but ask any travel startup founder and I suspect they’ll agree with me. If you have to get angel money, augment that with some travel executives and ensure everybody knows their place. The angel investors are the funds and the executives bring the travel industry knowledge.

• Know What You’re Good At and What You Not. Or find somebody you trust to guide you. I had a meeting a few weeks ago with somebody in the tourism business who wanted to advise our experts on SEO and Online Marketing Initiatives yet prior to the meeting simply outsourced his website to somebody else and wasn’t using the Internet to sell his inventory now. It was purely a content site. My response was, what competency do you have with SEO/Online Marketing? This wasn’t a “I like to listen in so I can learn” call — which I encourage — this was a “I have some serious notions in mind” call yet I’ve never done this before all while I want to work with a team that’s done this for the past 5+ years with people who’ve done online travel marketing for the past 10 years. I gave him the benefit of the doubt and heard a few suggestions only to end the engagement 3 hours later. Its critically important to set the boundaries (ie: the vision is spearheaded by the founders, the travel related decisions are joint but favor the travel executive..) between what the (non travel) founders know and do and what the travel executives will do.

• One Supplier Is Never Enough. Just because you have 1 vendors inventory — say a hotel vendor — doesn’t
  

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  mean you have all the inventory to sell. Said another way, getting Hotels.com or CCRA isn’t the end all of all. They are both fine companies but the more inventory you can get, the better. They may be enough for certain use cases but without knowing the strengths/weaknesses of all the discount discount hotel inventory, how do you know you’re okay? Particularly if you have a broad client base. If you have a niche — say Las Vegas Hotels — and you do a deal with the largest Las Vegas Discount Hotel Provider — you’re golden. Most travel startups don’t follow such a narrow niche.

• Inventory is critical to any travel startup. You don’t need 1 set of inventory, you need them ALL. Do you even know how many pools of discount inventory are out there — multiply that for every travel product you sell. Let alone getting ‘approved’ at the highest purchasing levels to actually compete with established players. The introductory “you’re a small agency” commissions and price breaks isn’t going to cut it. You need the volume purchasing discounts and its unlikely you’ll get that without millions of dollars of existing volume and a track record even if you negotiate well and are funded. Once you get your account setup — assuming it happens at all and it always takes more time than you could ever imagine — you still have to get the inventory from their system into yours. A Javascript embed isn’t going to cut it. Do you have a team of developers that have nothing else to do? And you need to repeat this for every vendor you plan on adding. If there are 12 pools of discount hotel inventory, that’s 12 integrations, 12 relationships, months for each relationship and that’s assuming you actually get approved. Oh by the way, all of the API’s change all the time so you’ll need to keep up. Did I mention there are discrepancies between what a reservation system says it does and what it can actually do via the API. There are times — shockingly — where the marketing team suggests features the technical team hasn’t implemented yet. As a new client — will you be in on the beta group to figure this out early? I can list dozens of situations any one of whom would bog a travel startup down.

• Travel Developers, Not Just Any Software Developer. Depending on the use case, you may have no choice but in hiring software developers versed in travel technology. Simply hiring very good programmers isn’t enough. There is a steep learning curve when it comes to travel supplier integrations and the nuances of travel trade that cannot be taught on the fly. Who’s going to teach them at a travel startup without travel founders? I’ve seen this happen time and again. The project does get done but multiples longer and costlier than intended. Which to a founder translates to stress and investors screaming at you for missing deadlines. There’s enough that can go wrong with any software development package — which are sometimes rushed, poorly planned and underfunded — coupled with offshore development headaches that by the time you throw in the travel trade learning curve, the founder is really dealing with a low to single digit success rate for an on time deployment.

You can see why travel startups have a low hit rate when it comes to penetrating the industry. They’re fishes out of water. Rest assured there is help out there.

Give Me Your Feedback

Do you work at a travel startup? What are your experiences? Have some ‘horror stories’ to share? If you find this post valuable, please comment and Retweet!

When Airlines Should & Shouldn’t Charge For Something

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Here’s a thought, if more than 75% of passengers purchase an ancillary revenue item, it should be included in the ticket price.

If 75% or more of people on a flight buy a meal — meals should be included in the ticket price.

Airlines should have a threshold in lieu of what seems to be a “what can we charge for” and “how much will we get away with” mentality.

Not all ancillary sources are bad. There are the “good” kind of ancillary revenue like day of departure upgrades and premium seating — which airlines need to focus on — and the “bad” kind like baggage fees, food, etc.

Airlines should get creative on “good” ancillary revenue — ie: up selling and cross selling.

In the mean time, ancillary fees are going up up and up!

There are fees yet to be introduced held up purely because the reservation systems the airlines haven’t been able to keep up with the ways airlines intend on charging passengers. The fees we already pay are going up.

“JetBlue‘s executive vice president and CFO, Ed Barnes, told analysts earlier this month that the airline has lost some potential ancillary revenue during the past quarter by waiving certain fees in this year’s transition to Sabre.” – Travel Weekly

Why is ancillary revenue growing? It works!

“Ancillary revenue is a significant opportunity for Continental,” he said. “And United has done a very good job. There are many issues related to rolling out our ancillary revenue products. There are IT issues, there are global distribution system issues, there are timing issues in terms of where it is in the chain of purchase, whether it’s a prepurchase or day of departure or post-purchase.” According to Travel Weekly,

When Will All This Stop?

Not anytime soon barring an airline charging for something we really won’t stand for (ie: bathrooms, to charge for sitting down on the plane versus standing up..).

Who’s Bucking the Trend?

Southwest Airlines which maintains no baggage fees.

Are Frequent-Flier Deals a Good Deal? – WSJ.com

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Thoughts relating to Are Frequent-Flier Deals a Good Deal? – WSJ.com.

Pretend your mileage is a product that you have to ‘buy’ (earn or purchase bonus miles) and ‘sell’ (redeem for tickets or upgrades).

Cost Price

Travelers who buy frequent-flier miles pay about 3 cents per mile, but then they typically redeem them for tickets at 1.5 cents each—or even less.

Sale Price

Redeeming miles at the right time (there’s actually a seat on a flight you want) and for the right ticket is what’ll determine if you make a ‘profit’ or not.

United believes savvy road warriors, not just infrequent fliers, are taking advantage of the bonus mileage offers. When redeemed for upgrades or for last-minute tickets, miles can deliver more than 3 cents of value apiece, sometimes up to 10 cents a mile or more.

It turns out buying 140,000 miles for $4,139 and redeeming them for an award ticket (you have to pay a fuel surcharge, too, of up to $600) is cheaper than buying a first-class ticket, which starts at more than $12,000 for a Seattle-London round-trip. You buy miles for 3 cents apiece and redeem them for a ticket worth at least 8.6 cents per mile.

You have to do the math.

It turns out buying 140,000 miles for $4,139 and redeeming them for an award ticket (you have to pay a fuel surcharge, too, of up to $600) is cheaper than buying a first-class ticket, which starts at more than $12,000 for a Seattle-London round-trip. You buy miles for 3 cents apiece and redeem them for a ticket worth at least 8.6 cents per mile.

The math works for business-class tickets, though not as dramatically. For Seattle-London tickets, British Airways tickets start at $5,037. Buying 120,000 miles from Alaska costs $3,548. Even after the fuel surcharge, you’ll save more than $1,000.

Alaska offers bonus miles a different way as well: The airline gives customers the chance to pay extra when buying a ticket to add 1,000, 2,500 or 5,000 “Fly and Buy” miles to the mileage earned. Paying for an extra 5,000 miles costs $117 tax included, or 2.3 cents per mile. That’s a discount to outright mileage purchases—buying 5,000 miles separately from a ticket on Alaska costs $148 tax included.

When to Redeem

There’s not magical solution — it’s all very hit or miss.

• Redeem for Upgrades. On the whole, upgrades have been quite ‘profitable’ for me. Especially from economy plus to business class — British Airways specifically which is nice since I have a credit card that earns BA points.
• It helps to have  ’elite status’ or find seats at the last minute.
• Plan in Advance. I hate telling people that but it’s true.
• Look for Last Minute Seats
• Unless it’s an emergency, I shy away from redeeming “anytime” awards.

Find a great deal? Share your story.

TravelWeekly.com 2010 Consumer Highlights

Highlights from the  Travel Weekly 2010 Consumer Survey (click link for complete survey)

18-31 year olds like using Travel Agents

Who knew! The 18 to 31 year olds represent 14% of the population yet represent a significantly higher percentage of the leisure travelers who use traditional agents. This is attributed to, among a variety of reasons, to that generation wanting to be coddled and online information overload.

Frugality is the new norm.

Travelers are 36% more likely to use coupons, 35% more likely to wait for sales, 26% more likely to buy online.

The Only Green People Want To See Are Lower Fares

Of the total surveyed, 84% said no or are unsure about paying a higher fare to use a travel supplier that demonstrates environment responsibility.

Lists 4 different “tribes” of leisure travelers.

•Sensationals make up 28% of all leisure travelers and are the youngest of the four segments (mean age of 40). They tend to be professional singles and couples with a preference for action/the club life. They also favor adventure and outdoor vacations, clothing-optional/spa destinations and travel primarily to play. They are particularly receptive to travel deals discovered through flash emails.

• Families represent 23% of all leisure travelers. They are family-vacation-oriented, represent the second-youngest segment by age (mean of 42), reside in dual-income households with children under 18 and are package-travel-oriented. Their preferences include theme parks, predictable experiences, cruises and beach vacations. They are safety-conscious and are smart comparison shoppers.

• Touristers represent 23% of all leisure travelers. They are happily married and the second-oldest group (mean of 47), entrepreneurial/driven to succeed and favor “no-mistake” travel. They view travel as an opportunity to learn. They take the most trips and spend the highest amount per trip. Their travel preferences index highly on family visits and high-end global destinations.

• Extraordinaires make up 26% of all travelers and are the oldest tribe (mean of 52).

More than one-third (36%) are grandparents. They tend to be wealthy empty-nesters seeking urban cultural experiences with a particular interest in museums and the theater. City, European and other foreign destinations index highly in terms of their preferences. They have a penchant for boutique hotels and resorts.

What the Google Travel Platform Could Look Like

Image by ryantxr via Flickr

I see Google coming out with its own travel platform based on my  ’connecting the dots’ between Google’s existing product line and previous travel acquisitions. It certainly has all the pieces to.

The exponential growth in possibilities given this list allows for multiple revenue opportunities makes it a compelling reason why Google would and at the very least could come out with it’s own travel platform.

I see the ITA Platform being the parent travel architecture — the Mother Ship — which it’ll use to plug existing and future travel products/services into. Throw a few acquisitions in there to balance out the platform offering.

• Airfare Pricing — The billions of combinations of fares, schedules and availability available through the ITA QPX product.

• Mobile Booking Engine or Mobile Travel Platform through the OnTheFly product ITA currently has.

• Travel Content — through Ruba (there are better content companies to buy but that’s for another blog post!). Coupled with YouTube travel videos.

• Visual Travel — add ITA Software to Google Earth and the notion of visual travel that many travel startups are attempting. Where a traveler can “see” their destination in 3D as part of researching a trip. How nice would that be – if their Visual Travel Offering is really good, maybe I won’t need to go on vacation at all. Just zooming in and “walking around” will be good enough.

• Visual Travel Lite — add ITA Software to Google Maps for what I’ll describe as visual travel lite. Ability to pick multiple points on a Google Map and automatically get pricing. Where it’s a 2D experience akin to what Kayak Explore does (which I love by the way – we need that but with the right inventory so I don’t have to search another site but Kayak!).

• Google Checkout Travel Merchant Services – Google Checkout, with changes in feature and policy, could easily offer a Travel Merchant Account Product. Anybody that sells travel knows how much of a problem taking credit cards is.

• Google Social Travel play through the integration of ITA Software/Engine and the launch of (potential) Googles Kayak Killer coupled with its upcoming Facebook Killer. I agree that’s a lot of ‘theory’ but the stage is being set – whether they do it or not is a different story. A true social travel play could be in the making and I’ve had the pleasure of speaking with a number of social travel startups doing some very exciting things in this space. Google if you want to acquire any of them, please be in touch.

• Predictive Travel. Take Google Insights for Search (for travel keywords for example) coupled with the QPX pricing engine coupled with the “predictive” algorithms in Google Trends and you could have a pretty interesting “travel suggestion engine” play going. End goal? For Google to tell me where I should go on vacation without having to think about it. 1 less thing I need to do.

• The Door to Door Travel Company Play – take a number of “lesser” services like Google City Tours, Google Transit and add it to the ITA Software (and others on the page) along the lines of what Zoombu and other “door to door journey” sites want to do. Particularly as a differentiator within the (potential) Google Kayak Killer.

• Location Based Travel — the opportunities within location based travel is just getting started. Google Places + Google Latitude + others on this list will make for a compelling advertising platform for Google. Check in to a place and you’ll get a coupon. Search for directions, GPS identifies your location, Google Places for local businesses with Google AdSense serving up advertisements/coupons.

• YouTube Travel Videos and User Generated Travel Content.

• Customer Service — Post purchase assistance with ticket changes and refunds and by addressing other “post purchase’ pain points based on the ITA Software ReShop product. Then integrating these services via an API.

Only the powers that be within Google truly know — I’m just thinking out loud here.

Agree? Disagree?

Please RETWEET!

15 Enhancements for your next Medical Tourism Conference

 

How to make medical tourism conferences more effective for presenters and attendees.

 

Questions You Need To Answer

Why medical tourism as a whole, why your country in particular, why this specific city and how is it overwhelmingly better than onshore services? Once I’ve convinced then tell me how I can sell these services including who typical customers are and their respective sales tactics.
 

Local Representation

Ensure native speakers read over all the presentations, review all the content (online and offline) and listen to the presenters. This ensures the format, look & feel (language, colors, navigation..) of the presentation follow local norms. This also minimizes cultural faux pas and ensures “happiness” and “co-operation” means “a high satisfaction rate” and “partnership opportunities”. Native speakers must be fluent in the local culture, language and preferably  been born or spent at least 5 years in the country you’re presenting in.
 

FAMiliarization Trip

A hosted familiarization trip is critical to generate sales. Travel companies will not promote your destination until they’ve visited the country and facilities they intend on offering their clients. It is too much of a leap of faith particularly for such a sensitive travel product. Imagine a customer hearing “I have / the owner of the travel agency have personally visited Busan Korea and toured multiple facilities. Let me tell how professional they are and how they’ve exceeded all my expectations. I thought it would be like ____ but I was pleasantly surprised to learn ________” – let me show you some of the video & pictures we brought back”. Priceless!
 

Content

Have ample content in multiple modes available including  audio, video, brochures, packets, white papers, promotional materials (bags/pens/notepads..), case studies, testimonials, etc. Answer all the questions patients and travel trade will or could potentially ask from the time the person leaves until they return from the treatment.
 

Local Testimonials

If you already have Americans, Russian and Europeans clients, have your testimonials reflect customers from these areas. Too many testimonials are from the destination and not the local country.
 

Non-Native Presenters

Its better to pick speakers who are bilingual or speak the local language with an understandable accent. All others should use a translator.
 

Suggested Topic Flow

Medical tourism conference attendees want to know about the country as a whole, then the city in  and then information on specific providers. Make sure the MC for the event is a local and ensure strict organization and flow from one topic to another.
 

Address Common Mis-perceptions About Your Country

Attendees already know or will soon know what the consensus is about your country. Is crime a problem in your country? Address it, don’t avoid the subject – Deal with it. Is crime a misconception? Provide reputable facts from multiple credible sources to prove your point including sources from the country you’re presenting in. Let’s use South Africa as an example. Depending on where you go, crime can be an issue. South Africa Medical Tourism needs to address this while they have the attendees attention rather than bringing up the subject after the conference.
 

English as a Foreign Language

If your medical tourism destination is non-English speaking or perceived to be, address this from the time the patient arrives until they leave the country. Will they have bilingual staff available and if so what are their backgrounds (ideally they will have studied in the local country). Is the hospital staff bilingual? Do you deal with international clients now and if so how many from the country you’re presenting in? Language barriers are critical to address in no-uncertain terms.
 

Present at Multiple Conferences

Host sessions or speakers at more mainstream travel trade conferences (TheTradeShow, WTM..) in addition to medical tourism specific conferences. To build a long term relationship – which is in the best interest of the medical tourism destination and local travel agencies – you must be seen as an authority and seeing a destination in more than one conference is a big part of that.
 

Explain “How”, not just “Why”

Conferences answer ‘why’ a destination should be considered for medical tourism but don’t offer concrete examples of how a travel agency or a tour company can take advantage of medical or health tourism services. Make it as easy as possible for the travel agency/tour company to sell your medical tourism services and answer all the questions they and the patient would have beforehand. “We offer pre-packaged tours and build your own tour services” but individual add-ons are also available both of which pay 20% commission. Here are a list of vendors who already sell these services and here are tools to help you design your own travel products. How will the travel agency earn revenue and what steps are required for a typical sale? How does an agent book a sale and how is payment confirmed? What guarantees are there? Make it as ‘turn-key’ as possible for sellers.
 

Speak to the Audience

Ensure the content is tailored to who you’re speaking to. You cannot have a one size fits all presentation. How you speak to the travel trade is different to the way you approach patients.
 

Listen

The conference is an excellent opportunity for foreign providers to interact with (local) potential customers and partners. Use this time to understand our motivations and pain points and incorporate what you’ve learned during or after the conference.
 

Start and End On Time

A few minutes here and there is understandable but any longer is unacceptable.
 

Food

This isn’t a requirement but it can be assumed that attendees to a Korea Medical Tourism conference will expect Korean food during the conference.
 

If you are a Tourism Ministry or Government Official in need of assistance, contact me.

Average Handling Time is Over-rated

Average Handling Time (“AHT”) refers to the amount of time, on average, it takes for an agent to terminate a call after it’s been answered.

I suggest that you cannot have short average handling times and score very high customer satisfaction numbers. Pick one metric, you can’t have both.

AHT is great for highly transactional environments with minimal customer service if-then scenarios and where the customer doesn’t expect good service (when is that ever the case?).

You want your customer service agent to go above and beyond and “wow” your customer – they’re not going to do it in 3 to 5 minutes. If you’re going to reduce their compensation for going over their AHT, they’re DEFINITELY not going to go above and beyond the call of duty.

Short AHT’s just incentivize agents to offer the minimum amount of service required and/or to get off the phone as quick as possible – is that what you want to offer your customers, the bare minimum?

CALL CENTER CLIENTS HAVE THE POWER TO INITIATE  CHANGE

This post speaks (a) primarily to call center clients because you have the power to make changes and (b) to request call centers to counter any clients that hyper-focus on AHT’s.

If a call center does a lousy job, it’s not their brand that suffers.

If a call center loses a client, their revenue doesn’t go down.

Speak up clients!

SOLVING THE PROBLEM

On one hand you want your customer support agents to solve the problem the caller is trying to fix. If that happens, the person will inevitably use your travel agency for his next trip. That is the goal isn’t it? To fix the problem. To keep the customer from being somebody elses customer.

You don’t want your customer service agents to offer a quick fix to realize it wasn’t the right thing (or worse, to offer a solution knowing it wasn’t the right one) just to keep their AHT numbers down. It happens all the time.

You don’t want customer service agents to hang up on callers just to keep their AHT numbers down. Happens all the time. Ever called, got through to an agent and been immediately hung up on? It happens all the time.

You don’t want to have the client call back again and again and ‘ask for a manager’ to fix something that should have been fixed on 1 call. How is that helping your company? Now that customer thinks even less of you to begin with. Your ultimate goal is to increase their lifetime customer value, not to pass the buck to some other department or up the supply chain.

AHT IS NOT THE HOLY GRAIL OF METRICS

I’ve spoken to call centers and agents in India and the Philippines that have ridiculously low average handling times working in AHT obsessive call centers that (surprise surprise) have low callers satisfaction numbers.

Entirely too many call centers use AHT as the holy grail of metrics and penalize call center staff for not meeting their AHT targets. Yet the very same call center do not have a scaleable way to trap exceptions that legitimately require considerably longer time than allotted.

I won’t even get started on how savvy call center agents devise work arounds to keep their AHT low. Is that what you want your staff focusing their energy on, circumventing the system?

BUILD A SUSTAINABLE BUSINESS

Turn AHT from a metric to penalize staff into a metric to identify outliers. Use AHT to find agents who went beyond the call of duty to fix the problem. Who called the airline, who spoke with ticketing, who kept the customer updated – who solved the problem. Yes it took 4 hours but that customer will use your travel agency and tell all their friends about it and maybe even mention it on their blog, Twitter and Facebook which will lead to even more customers. You see where this is going.

Use AHT as part of a number of metrics.

If you’re using AHT with some success, think about how AHT may be hurting your business as well.

If you want to build a sustainable travel agency that values longer term customer value and wants to properly incentivize agents to solve the problems your clients are calling for – better eliminate AHT or put it’s importance much lower on the list of metrics.

Gaps in inventory at Travel Aggregators (Travel Metasearch Engines)

This blog post should be read from the perspective of helping travelers make smarter decisions while addressing the gaps I see in existing travel aggregation sites like Kayak & Mobissimo.

This post is not intended to be a hit piece. I strongly advocate you using travel aggregators but I just want you to know what you’re getting.

As always, companies improve, features get added and inventory gaps are filled and that’s in the best interest of the traveler and aggregator.

NO FRILLS INVENTORY GAP

An effective travel aggregator needs to search all airlines & travel agencies for a particular destination to yield the greatest benefit for the traveler. Sounds simple enough but the % of total inventory really drops if you’re searching flights originating outside of the United States and until recently for domestic routes. And the % drops further when you exclude the full breadth of consolidator fares that I’ll get to this later in this post.

If I’m doing an air search from Los Angeles to Boston then I am best served and the travel aggregator is most effective when I get 100% of the airlines that cover that route.  Emphasis on the word best. There is value in the current results but I’m looking beyond that. I want the best results not just pretty good results. For example, Southwest Airlines hasn’t been integrated into Kayak (as of the time I’m writing this blog post) so anybody searching Los Angeles Boston as of this very moment is by definition not being offered every option in the search results.

100% of the inventory for a route is a requirement for the traveler to get the best deal in the shortest amount of time. Which is the ultimate point of a travel aggregator. Capturing all the inventory for a given route is a monumental task so in the meantime consumers need to factor this inventory gap when searching fares.

What I don’t want to see is improvements on a lot of other things and this issue gets sidelined and misclassified as a a ‘nice to have’ when it’s absolutely a ‘need to have’. I’m realistic in suggesting travel aggregators start integrating no frills carriers for high volume  routes since they can pull a report with popular city pairs and cross reference the list to routes flown by low cost carriers.

In fairness, I do like that Southwest Airlines is listed in the left hand side when I searched Los Angeles Boston so I am tipped off but other city pair searches are not as generous.

It could be a lack of integration, a lack of intention on the part of the airline and/or aggregator, maybe they didn’t get around to it. Maybe an airline was in the search results and was taken off for business reasons. I don’t claim to know why but that’s not the point.

I do know the results – at this point in time for this particular route – are not comprehensive and consumers need to know this. Savvy travelers know these inventory gaps exist but not everybody. ‘Everybody’ is exactly who travel aggregators are increasingly marketing themselves to.

In the previous example the traveler could directly search the Southwest website but this assumes they they know Southwest services that route. That’s a big if. Los Angeles Boston somebody may know but who knows the routes for lesser known city pairs. The whole point is to go to one place and search everything and move on with life.

I don’t mean to pick on Kayak, this scenario could just as well apply to another aggregator. A comprehensive search is the ultimate goal for any travel aggregator because that’s what is best for the traveler.

And what about large, reputable low-cost carriers in Europe or Asia? If the low cost airline everybody and their brother in Hong Kong or Dubai knows about is not in the searched site list then (a) I am possibly not getting the best deal and (b) the aggregator risks brand dilution when I come to find out Airline XYZ was left out.

Conversely if the travel aggregator knows they have 100% of the airlines between LAX and BOS in the search results then please tell me. Consumers would love that and it’s a great competitive edge.

CONSOLIDATOR AIRFARE INVENTORY GAP

If the idea is to offer consumers the lowest airfare (for example) to a destination then more consolidator fares have to be to added to the results. Consolidator fares – bulk fares you can purchase that come with a lot of restrictions for a lower price than the airline direct rate – are included in the search results to some degree with Cheaptickets.com and Orbitz but I would like to see more tier 2 online travel agencies added to the mix.

Are you telling me there isn’t a $25M hybrid travel agency/consolidator specializing in consolidator fares to India that can’t be added to the mix every time I search Los Angeles Delhi? Of course there is. Why? Solely to drive down the cost for the end traveler.

I realize integrating consolidator fares is more complicated than airline direct rates but these are obstacles aggregators can overcome. I realize airlines are not going to be jumping up and down as they watch their wholesale channel competing side by side with their retail channel but something has to be worked out. I’m aware that some aggregators are offering private inventory (which just as well could be consolidator fares) so steps are being taken.

My point is, allow a few big tier 2 sites into the results or integrate them for select international destinations and leave them out where they don’t have a strong footprint like domestic fares within the USA. Consolidator fares do save consumers money and this product type needs to be included.

NOW WHAT?

As a traveler, you need to understand these inventory gaps and explore alternatives in the meantime.

Peace of mind. That’s a key pain point everybody booking a ticket faces. Am I getting the best deal. How do I eliminate or reduce that little voice questioning what else is out there? I would book this if I was just more confident that I’m searching everything that applies to my trip.

• Search consolidator fare sites or ask your travel agency if they have them.
• Search no frills airlines like FlyDubai and AirAsia.
• Pay attention to airlines that are added to the mix with your favorite travel aggregator.
• Use Google, Twitter or Facebook to request what no frills airlines service a city .
• I would advocate searching more than one travel aggregator.

By all means use travel aggregators. They save you time and money. I use them. Just realize travel aggregators act as one tool and not the only tool in your travel toolbox.

All the best and happy travels.

Sounds simple enough but isn’t always the case. And the % really drops if you’re searching outside of the United States.

Usability Tools are Essential

Usability tools like Clixpy and Clicktale and Userfly allow you to peek over the shoulder of the people who come to your site.

By embedding a few lines of HTML code, you can playback a video ‘capture’ of a single site visit.

I got an odd voyeuristic feeling when I first reviewed the captures. Then you have this moment of zen when you realize ways you can leverage this information to (a) serve your customers better and (b) increase metrics like conversion rates, time on site, bounce rate, the layout of your site and of course the increased revenue from implementing changes.

LEVERAGING USABILITY INFORMATION

The free trial captures alone should make you a believer.

Forms: learn how visitors complete your online forms. Where else can you actually see users complete your online form including backspaces and tabbing through the fields. Love this feature. Is there a form field that takes too long to complete? Now you’ll know. Does the user come to a question and abandon the page? Is a form field causing validation problems or makes them click ‘help’ or the back button on their browser? Do I need to tell you how important this information is?

Landing Pages: analyzing landing pages is a perfect fit for testing usability. Also a great way to minimize burning through captures.

Navigation: see the user going from your Home Page to your About to Articles You’ve Written to the Price Request Page.

Mouse Movements: see the users mouse trail. I found users clicking on things that weren’t links which got me thinking, maybe they should be links.

Above the Fold / Below The Fold: learn from the user scrolling up and down your page.

OVERLAP WITH OTHER ANALYTIC TOOLS

Some of the information you learn is available through site overlays and heat maps but seeing rather than reading a report provides a valuable new dimension.

ONE TOOL AMONG MANY

Usability goes hand in hand with other online tools Google Analytics and CrazyEgg, not a replacement for.

1 SET OF METRICS DATA IS KING

Having one set of site metrics in Google Analytics and another set with Crazyegg and yet another with Userfly (or Clixpy or whomever) leaves you to make the connections between the various pools of data.  Which does happen but the true leverage will come from looking at 1 set of data.

If you can afford $290 a month then Clicktale.com offers a comprehensive set of tools including heat maps, eye tracking, usability captures and analytics in 1 place.

Clixpy and Userfly are solely usability focused as of right now and require you to either purchase captures beforehand or allot a certain number of captures depending on what subscription plan you choose.

UNSOLICITED FEEDBACK SECTION

Filtering: more needs to be done to filter out visitors I don’t want to capture especially for companies on the pay per capture model.  On the positive, they do allow you to filter out your own IP address (shockingly you’re not interested in playing back the capture of the time you visited your own site)

Integration: I realize these companies compete with one another but I do hope they work on allowing the data they capture to integrate with other analytic tools. Can you imagine the power of clicking a completed goal in Google Analytics (somebody who buys your product) and bringing up their usability capture. Or the ability to click Site Overlay in Google Analytics and getting a CrazyEgg heat map and then drilling down to a Userfly usability capture?

Good times ahead. Nobody accused me of thinking small.

Or is a more likely scenario to happen where startups in the space will get bought out and integrated with the more established players?

0 second visits: I wish the usability companies on a pay per capture model didn’t charge me for captures that are 0 seconds in length. I have to say it irks me to pay for learning nothing from a visit.

I love that you can capture sessions across multiple domains.

I love how easy the setup is. How you can cut & paste a few lines of HTML code and get so much information is beyond me.

I do hope I’ve enticed you enough to try usability and apply what you learn to grow your travel company.