Configuration management activities
So as to reach the critical mass level, Airbnb applied both online and offline tactics. With the aim of growing their user base, they used an un-scalable process. The founder of the company moved to New York during the inception of the Airbnb so as to attract the hosts in large numbers to the platform where most of the customers were based. This would enable the founder to find out how he needed to design the platform in a manner that fitted the customer's needs. The insights that the founder gathered from the initial customers led to the replacement of the amateur photographs with other professional and high-resolution photography of the listed properties (Malhotra, Arvind & Marshall, p.26). This was the image that helped the company to grow and attracted more renters leading to the growth of the buyer side.
The term Airbnb comes was retrieved from combining two terms that is Air Bed and Breakfast. The name gained its global popularity in the year 2008 during the Democratic National Convention. The company's founders ensured that the company was advertised to the attendees of the convention where they provided lodging services and other necessary accommodation services. The founders collaborated with bloggers to make the company fully published online about their house listing services; this led to the company being picked by CNN and was later known nationwide (Botsman, p.113).
Airbnb incorporated some more multiple approaches to the marketing campaigns besides their un-scalable customer contact. The company's employees tapped into Craigslist that was the worldwide leading website for advertisements, they sent auto-mails to people who had listed their hires on Craigslist and recommended the option of listing the houses to Airbnb.
The quality of the rooms is not on the list of the problems that peer-to-peer rental strategy has to be concerned about. For hotels, they have to meet the quality control system outlined so as to ensure that their rooms meet the quality of the customers' expectations; Airbnb has an effective system of sorting out the providers with poor quality premises. The rating and the feedback criteria help in determining the quality of the new user and do not only mitigate the risks for the two sides. Professional photography serves a major role in helping to validate the host's quality as well as the listed space besides providing better-looking photos (Katz, p.1119).
Airbnb developed and established a search engine platform that assists in matching the tourists with the most appropriate hosts. The search engine takes into consideration several factors that include;
1) Evaluating listing in terms of its quality grounded on ratings, booking rates, the click-through and the amount of the verifications conducted by the host.
2) The platform provides easy way of booking that is based on the regularity and the promptness of response to the tourist, or canceling guest trips and accepting the guest’s requests.
3) The preferences of the guests; Airbnb provides a platform that filters and minimizes the number of searches by the guest by sorting out the available options through the type of accommodation, location, and other clusters. The platform also provides personal information on both parties as indicated on each profile.
The accommodation procedure is facilitated by the usage of a platform. Personal information such as phone number and email for either of the parties is not displayed until a reservation is made and a booking confirmed. Airbnb provides a platform for the two parties to communicate easily by exchanging private messages. The strategy of keeping the communication exclusively on the platform before the completion of the reservation, this ensures that the company does not lose revenue in any way and secondly it protects the host and the guest from any cases of fraud.
The transactions that occur between the guests and the hosts are entirely facilitated by Airbnb as well as its fee module. The logistics concerning the leasing out of the premises is conducted by the owner while the payment structure provided by Airbnb. The system operates by ensuring the guests deliver their reservation to their host, they then provide the payment details that Airbnb charges. In times of expiration of the reservation or a cancellation, the guest does not incur any charges. Once the reservation is established, fee is made to the Airbnb then held till 24 hours after the guest checks in (Airbnb, 2014).
Airbnb Partner Network
Airbnb has several partners who assist in their outsourcing the activities that are not specified in their competencies, these areas are two and include the customer service function and the data analysis. The customer service segment is delegated to their partner network as there are many calls coming in; therefore there is a call center. Airbnb had to go through a rough period before identifying the most reliable call center with whom they partnered for the long-term.
So as to ensure there is constant customer contact and enhance the customer loyalty and experience, Airbnb's management ensures that they have the best talent tending to the customers' needs through their social media platforms, customer service, and management of community. This enables the company to develop its business society in every new territory in a firm and an effective manner. Airbnb has also invested in developers as part of their team whereas the developers themselves are developers and therefore technology creates the biggest platform under which Airbnb runs it marketing and other strategies.
Airbnb hires its employees based on the identified business issues that arise from the frequent business practices. For instance, the customer service is comprised of teams that solve the four major issues associated with; problems between the guests and the hosts, host management success, payment of tax and other government issues and finally the assurance of quality services in the marketplace (Airbnb, 2014).
Airbnb Customer Relationship
Airbnb revolves their activities around the customer experience and relationship as the core objective of their business; they even established a department for customer service known as the ‘Customer Love’.
Information strategy and Customer Service
Airbnb is dedicated to being company driven by data and uses the data they gather to ensure that the customers get the best services and identify new business opportunities. The company has launched several supplementary businesses to aid the main business; for instance, they have introduced companies that deal with cleaning services for the hosts. For Airbnb to advance customer services, they gathered three main metrics to serve the customers that include; the contacts per transaction, the top issues that customers contact the support about and the costs per each ticket.
Airbnb keeps in touch with the clients through an array of several channels such as their website portal, their mobile app, 24-hour customer service and the social media networks. They also have a word-of-mouth marketing search engine while they have engaged in persuasive global advertisements on YouTube, Twitter, Facebook, and BBC.
Safety, Loyalty, and Trust
Trust is one of the key aspects and a central theme for Airbnb, therefore, it's a daily challenge for the company to integrate into its business practices. Both the guest and the host have a lot of chances on safety matters. The hosts face the risk of vandalism and theft while the travelers on the other side have to stay in a stranger's house as well as make payments to unknown parties. For the company to ensure there is trust among its users, they developed multiple methods to conduct their operations and other inbuilt features as well as supplementary programs.
Trust issues are addressed through the rating platform where the rating contributes to the reputation of the hosts while the travelers can leave a feedback and rate one another after the completion of the transaction. The platform also ensures that there is minimal risk for scammers as the hosts and the guests have to verify their email addresses, phone numbers and offline IDs such as the driving licenses. Other features include social profiles rating and the number of connections that the host and the guest have in common.
Airbnb also implemented some services and programs that improve the level of trust while ensuring safety to the users. The 24-hour customer service ensures that all the problems are adhered to on time while other policies ensure that the hosts can get up to $1 million in damages for any costs incurred on the property as a result of mishandling by the guest. For the guests, they can make claims to requests placed as well as a refund in instances where they have been misrepresented on the space booked or property rented (Evangelos, n.p).
Trust is very important in the implementation of trust to the customers that concurrently provides a basis for building loyalty in the customers.
Financial Aspects in Business
The revenue in Airbnb comes from the two sides of their market. Consequently, the company charges 6%-12% to the guests while the hosts are charged 3% in the listing of space (Botsman, p.8). The fees charged on the platform are not refundable in times when unsuccessful transactions occur, and this acts as the initial revenue for the company before a transaction commences. The company ensures that they retain very low commission percentages for both parties since the users are both highly price sensitive while discouraging offline transactions. The platform is highly effective in ensuring that there are no offline transactions that may reduce the revenue earned by the company. It does this by ensuring that the identities of both parties are not revealed until a transaction is completed. Therefore messages cannot be relayed to each other between the guest and the host if they contain personal information such as emails (Katz, p.1114).
To ensure that there is a value proposition in the company, they ensure that the costs of distribution go to technological advances by developing the existing and the new features. The other segment of the company's income goes to marketing, customer support and the sales function. This is mainly through hiring more employees and paid advertisements as well as costs associated with marketing materials and campaign (Lehofer, n.p).
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