In the eyes of potential customers, trivago is the winner of the WUA online orientation study on booking a hotel for one night in the Netherlands. The research was conducted in June 2017, with consumers orienting themselves on smartphones (n=200). In this interview we speak with Victor Vermersch, Head of FR-Benelux at trivago. A conversation about cultural diversity as a business success factor, never working on gut feeling, work-life balance, AI and personalization.
Victor Vermersch, congratulations on winning this WUA study. How important is it for you to be the best in the digital arena? What role does a winning mentality play in this?
"It's really satisfying to get this kind of recognition, especially in a competitive sector like the hotel industry. Being recognized as one of the very best websites for searching for a hotel room is a big achievement. This really motivates us, it drives us forward, and it also reassures me that we're going in the right direction.
"Of course we all want to stay at the top of our game. However, the hospitality industry is big and dynamic enough for many players to be successful. Nowadays there are a handful of leading companies in this industry, and they all show very nice growth. So... being awarded the prize for Best Hotel Website is enormously satisfying and this is what we strive for, but it doesn't necessarily mean that the others aren't successful. There's enough pie, and the pie keeps getting bigger, we're in a very fast-growing industry."
What is your approach, what's going so well? What can other people with digital responsibilities learn from your approach?
"First of all, what makes trivago successful is a careful approach in everything we do. We never work on gut feeling. This just never happens here. Whether we're talking about product features or marketing campaigns, everything we do is supported by consistent and reliable data. We will never scale up any part of the business without first knowing whether it actually works. So of course we can test, and we certainly do a lot of testing, but we must be able to draw conclusions from the tests. Always. This has been our systematic approach in everything we do since the beginning. I've been here six years and that was already part of the DNA and culture of the company on my first day.
"I think this can all contrast with the image people have of trivago, because we invest a lot of money in marketing. But we do this very carefully, and it's far from random. From day one we knew how we could monitor performance with direct response from TV, and where we wanted to go with that. There is no place for randomness in what we do. That would be one of the first values that make trivago successful.
"Another important ingredient in our success story is our smooth transition from a start-up to a global company. We kept teams agile and promoted entrepreneurial spirit through flat hierarchy and real responsibilities for everyone; this enables us to really act quickly despite our size: we can iterate quickly, learn, produce and scale things.
"The third point is the diversity of the company. We are very multicultural. From the beginning we hired talent from all over the world, and although we're based in Düsseldorf, Germany, only a fraction of employees are actually German. In fact, we have more than 50 nationalities represented here, and I think this confrontation of cultures, ideas, is really healthy. Different cultures give different ways of thinking, which gives you many different angles to approach a topic, which is crucial when you want to make a well-considered decision about an important subject. Cultural diversity is essential, and it became part of the trivago DNA. We welcome everyone as they are and as they think."
From a consumer perspective there should (no longer) be a difference between service and sales. To what extent do you succeed in breaking down silos at trivago? How are sales and service organized?
"We're transforming the company into an organization with an agile structure where we work in small units. There are actually no silos, because they all actively and intensively communicate with each other. When it comes to sales and service, trivago is a non-merchant website, so there's no booking on trivago. We offer a hotel comparison service to users, and hotel room providers give us a commission for the travelers we refer and the bookings they generate thanks to trivago. Because of our business model, Sales isn't really a very strong topic, what's really important for us is the user experience and the service we provide to people who visit us.
"We work exclusively with the CPC model (Cost per Click), we don't work with CPA (Cost per Action). We can assess the quality of our traffic, and we shouldn't be dependent on booking conversion on the hotel booking site. Working with CPC also pushes our partners to try to improve conversions on their site. They can be very profitable: if they succeed in improving their conversion, they will pay exactly the same commission, but get better conversion and possibly more revenue."
What is the role of customer research and customer focus in your daily work and in the teams you're responsible for?
"We have a small team that works on research and gathering information. They get insights, make reports, or get industry reports from other research companies. This is crucial for us, even though trivago has been quite successful in applying the same launch strategy in all markets, because there are some specific matters from one market to another regarding booking behavior, payment details, and so on that you absolutely have to take into account. We therefore rely heavily on market research.
"We don't have customers, because nobody makes a booking on trivago. We have users, and our mission is to help them find their ideal hotel at the best price. We have a dedicated internal department that deals with requests and user problems. We have a policy to respond within 24 hours."
In digital, which KPIs do you use? Which KPIs are most important for you to excel in digital?
"We look at many different KPIs depending on the topic. When it comes to platform performance, we constantly look at visits and revenue development but also click-out ratio: how many users click through on an offer and are referred to a booking site, booking conversion ratio: how many users actually book a hotel room, average revenue per generated user etc... Then we also have KPIs specific to each marketing channel and each department."
What are your biggest digital challenges for 2017?
"I think the biggest challenge we have is to really understand the needs and preferences of our users to better personalize the offers we show. By doing this, we increase the quality of service delivered, and we increase booking conversion ratio on booking websites. We strive to create loyalty and increase user retention.
"All in all, we want to provide a frictionless experience for users looking for their next hotel room. They shouldn't have to go through a long list of items and possibilities. Ideally, we would want to offer them a short list of accommodations that exactly match their needs. It's particularly challenging for us to get this real personalization aspect into our service and offers, because most people who use trivago are not logged-in users, we don't have much information about them, and it's quite difficult to track the same user from one session to another.
"To overcome this lack of user information in our personalization effort, we analyze search behavior and group similar usage patterns together. We can predict, for example, whether the search is being done for a business trip or leisure, and will suggest hotels that are adapted to the travel purpose and needs."
What digital innovations are you currently working on, and what developments are on your roadmap?
"We're trying to make search feel much more natural. We're exploring different ways that also include semantic search for example. I think the ability to search by typing in our search bar 'I want to stay next weekend in an affordable three-star hotel in Valencia', should be an option. So we're trying to improve and innovate on semantic search, AI and conceptual search."
What do you think The Next Big Thing will be in digital in your market?
"In our industry, better understanding the user and actually being able to fulfill their requests through semantic analysis and more personalization, probably based on AI systems, will become extremely important. This is certainly one of the hottest topics in the industry. Additionally, what we've seen in the meta search industry, is that companies like us are trying to find ways to facilitate bookings made on the advertiser's website. We certainly have a role to play as meta search, also in optimizing the booking funnel!"
What is your ultimate goal or dream that you want to achieve in business?
"Ideally it would be to create my own digital start-up. Although it can be quite challenging when you start, I also want to be able to control my time and work-life balance."
I think this dream of yours represents a trend at companies throughout Europe, where work-life balance for younger generations is much higher on the agenda than ever before...
"Yes! I think you can be much more efficient by optimizing the time you work. I don't think the '8 hours a day 5 days a week' system makes much sense anymore. Our jobs nowadays require so much brainpower and creativity. Who can really be efficient for so long during a whole day?
"The digital era is profoundly transforming our approach to work, making it more challenging on one hand, because it speeds up workflow and everyone can be expected to respond to urgent emails within a very short timeframe, but on the other hand it also gives us freedom and flexibility in how we handle our time. So why not move away from the 40-hour work week? Why not give employees more power based on goals and objectives and move away from the 25-day vacation system? trivago initiated that many years ago, and it works! Individuals feel trusted, autonomous, and fully responsible for themselves and the outcome they produce. They give back to the company by contributing even more.
"Mobility is also another big trend in the digital industry, more and more people work from abroad, they sometimes even travel while working. That's great. We actually had someone here at trivago a few weeks ago who explained how he manages to work for his own company from his camper. All he needs is an internet connection, a laptop, and a great view!..."
