Very few online travel travel outfits can claim any degree of brand loyalty. That's hardly surprising, given that most Web-surfing shoppers are looking for bargain air fares and hotel rates, often going to great lengths to find them. Midmarket travel sites that focus on a specific location or consumer may be the exception, however -- places like vegas.com, for example, where honcho Howard Lefkowitz is building an expanding client list of returning visitors to Glitter Gulch and the Strip.
An Internet veteran and former marketing vice-president at EarthLink (ELNK) before taking the reins three years ago at vegas.com, the 44-year-old Lefkowitz spoke recently with Smart Answers columnist Karen E. Klein about brand loyalty and why smaller companies may have to spend more to achieve it. Edited excerpts of their conversation follow.
Q: About 19% of your transactions come from repeat users. That number is up from about 2% a year ago and about a tenth of a percent two years ago. Compared to the big retailers, 19% is pretty impressive. How have you managed it?
A: Very deliberately. You know, we live in a service-based economy, but yet most companies and individuals don't like to provide service. At the most basic level, above every door at vegas.com's headquarters (okay, maybe except the restroom door) is a sign that says: "Think of yourself as a customer." It sounds sort of silly and self-serving, but really it's critical. People in our company make decisions everywhere along the line, every day, that affect real people.
Q: What are some of those decisions?
A: For one thing, vegas.com is actually in Las Vegas. Even our call center is right here, as opposed to being in some other U.S. city or in India someplace. The people who answer our phones live in Las Vegas, they visit the hotels, and they go to the shows. When someone calls in, our representatives can answer their questions and give advice from real experience. For instance, I was walking through the call center the other day and Sally was concluding a call with a customer and she said, "Enjoy the show. Oh, and by the way, take a sweater. It's always cold in there." That's the kind of thing that our customers want and need to know. It's not a big thing, but it makes their experience far more comfortable and that's what we're aiming for.
Q: So the personal touch is a big factor for you.
A: It's the most important thing, no question. The bigger aggregators can book reservations, but they don't know enough about the components of a city. Our difference is that we're all about Vegas -- we're not going to expand into Los Angeles or New York City. Las Vegas is the first or second (next to Orlando) most-popular tourist attraction in the United States, depending on how you measure it. And it's incredibly complex. You can come to Las Vegas as a couple, as a family, for a bachelor party, for a wedding party, for the fine-dining experience, to see shows, to gamble. There are many entertainment tracks that draw visitors here and we know about all of them.
Q: How do you keep up with everything that's going on?
A: We require all of our customer-service reps to take six hours of training every week. So they learn about the properties -- they talk to hotel managers and show folks on a regular basis. In fact, we have the entertainers actually come to our offices and entertain, so the reps have a good idea what they are all about, and they know which customers to recommend tickets to, and which ones not to recommend them to.
Q: Was it difficult deciding not to outsource your labor-intensive operations, like the call center? It's obviously more costly to hire locally than it would be to set up an operation off-shore.
A: Sure, it costs more. But doing it our way makes all the difference. We find ways to cut costs by buying cheaper envelopes, not by cutting service. For instance, using updated technology has saved us money in the call center. But when a customer says, "I'm staying at Caesar's. How far is it to the show I booked?" somebody in India would look at a map and says, "Oh, it's only two blocks away." But that doesn't work because they don't have first-hand experience with the superhuman scale of this city, where blocks are huge and something just next door to your hotel can be an extremely long walk in the heat. That's the kind of thing that leads to a bad customer experience, and that gets us back to our sign: "Think of yourself as a customer."
Q: Your Web site is another critical component of the business. What steps have you taken there to promote return visits and customer loyalty?
A: Our site is the largest purveyor of information about Las Vegas that emanates from the valley. It's also the most widely visited city-travel site in the world, with up to 1.7 million unique visitors every month. The thing about most city sites is that they aren't well done. They're run by chambers or by government agencies, and they only include the listings of everyone who's in the group or everyone who advertises. We don't sell advertising on our Web site, so we have no prejudices because our revenue comes strictly from our bookings.
What we do is simply provide the information that people are looking for, and tailor that information to our customers. So, if they're going to be in town on a singles' weekend, they can look at the Web site and get suggestions for that visitor track. If they're coming in to do a skydiving-and-adventure weekend, they can find out how to do that.
Making the site easy-to-use and providing quality, updated information is like taking out the laundry for us. It's got to be done. For instance, things change every single day in this city - show times, openings, closings. When Wayne Newton changes his showtime from 8 p.m. to 7:30 p.m., it may be a small thing. But it's a big deal if you're holding a ticket and you show up half an hour after the show has started because the information on the Web site was outdated. The breadth and depth of our content is important and customers have to feel they can trust us to get it right.
Q: It's those small, almost intangible details that can make or break you.
A: Absolutely. You remember when Amazon.com (AMZN) was a startup and Barnes & Noble (BKS) came online, with tons of retail locations, and they were going to crush Amazon. But people go back to Amazon because of the product, the brand, and the way they have built customer loyalty. In fact, people might spend $10 more to buy from Amazon because of that goodwill!
It's only a highly specialized, very focused business that can pull off those details in a meaningful way. We require all the people in the company to rotate not only through the call center, but also our retail ticket operation once every two months. So the programmer who writes computer code sits on the phone regularly and talks to customers or goes to work at the retail center and observes customer behavior.
Q: Do you solicit feedback from customers in the form of surveys, or do you have another way of measuring it?
A: I don't really believe in surveys because I think people will say anything on a survey and also because I don't like to get in the customer's face asking about our business. If they choose to write us, good or bad, we appreciate their feedback. But the Internet provides us with mass behavioral information in terms of what visitors click on, what they don't, what's working and what's not. That method of evaluating our business is less intrusive and you find out what they really did, not what they said they would do.