November 2018, Amsterdam
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How Hostelworld is driving loyalty differently
Customer insight, commercial reality and some innovative marketing campaigns have put a budget brand back on the map, and without a traditional loyalty programme
For a budget brand targeting millennials and GenZ, who have grown up on their mobiles and are extremely promiscuous about where they choose to stay or book, there is no such a thing as ‘hostel customer’, nor, for that matter, a loyal one.
Speaking at EyeforTravel Europe earlier this month, Marek Mossakowski, Hostelworld’s global head of brand said: “People who stay in hostels today are just as likely to stay in an Airbnb as they are in a hotel…They are also likely to book via a third-party site like booking.com. Loyalty is hard to come by, especially at the younger end of the spectrum”.
A few years ago Hostelworld was missing the boat with its 18-35 year old audience. The brand logo and website were tired and dated, and it was focused purely on transactions. “We talked tariffs, conversion rates, booking margins, revenues and nothing else. There was no mention of the customer and part of the reason was that we were in a price war with the competition,” Mossakowski explained.
For a target audience that want instant gratification, and easy access to everything, and who are using platforms like Instagram for inspiration, this simply wasn’t enough.
The good news is that Hostelworld has pulled back from a difficult period in its history and shifted its focus to putting the customer experience first. What helped the brand change course was getting to know its customer base, and the recognition that one universal truth that sat behind all insights [about the hostelling world].
Loyalty is hard to come by, especially at the younger end of the spectrum
“When you speak to any customer, whether they are from Korea or Spain, there was one common theme – that the biggest USP and biggest sell a hostel can give isn’t actually the four walls, it’s the sociability aspect,” Mossakowki told delegates in London.
The result of this ‘Meet the World’, a multiplatform, content driven advertising campaign that put the customer and sociability at the centre of the brand proposition. In 2015, the campaign launched with a daring video that featured a crowd skinny-dipping in a Mexican sinkhole. A few months later, the Advertising Standards Authority (ASA) banned the video for encouraging a dangerous practice but by then the company was back on the map! And the results of that campaign gave them every reason to go all out to capture the imagination of its 18-35 year old customer base. Since then other notable campaigns have included the ‘Even Divas can be Believers’ featuring singer Maria Carey, which has racked up over 13 million views, and more ‘In Da Hostel’ with the rapper 50 Cent.
How does loyalty fit into this?
It does and it doesn’t. In the first instance, Hostelworld doesn’t have a loyalty programme for its two audiences namely: the hardcore backpacker traveller and the city breaker.
Although, the competition for customer acquisition, particularly in relation to the latter is steep, Mossakowski says that with the ‘Meet the World’ campaign they took the decision to stand out from the competition from an emotional rather than a transactional viewpoint. “We wanted to give customers another reason to book with us above and beyond price and availability,” he says.
We wanted to give customers another reason to book with us above and beyond price and availability
As a budget brand, Hostelworld doesn’t have much margin to play with when it comes to discounting. It also has to accept the commercial reality that beyond the age of 35, “it is very hard to keep customers within ecosphere”, which makes the first time experience more important than ever.
Hostelworld has achieved this in the following ways, to name a few.
- Put emotion at the heart of everything. This “absolutely” drives Hostelworld’s tone of voice.
- Be hyperconnected, engage! This is very important for many reasons including:
- Hostelworld has a high ratio of reviews to bookings. And for the record, Hostelworld has hit over 10 million reviews.
- People don’t want to spend too much so they will sift through reviews to make the right choice.
- Customers are using social platforms like Instagram to search for inspiration.
- In a world that is inundated messaging attention and engagement are key.
- Look for authenticity: Don’t oversell. The focus should be on content and social.
- Stand up to scrutiny: Your product must be “shit hot”. There should be no reason for a customer to move away from it.