Many moons ago, Carl Query and I helped create Compete.com. After working at Compete for five years and watching it grow from a little start-up to an industry leading web analytics firm, Carl and I decided it was time to start our own company.
Armed with a little angel money, an idea and Compete data we set off to create FlipKey.com – a community driven travel site to help consumers find trusted vacation rentals throughout the world, by providing real reviews of verified vacation rental properties.
I’m happy to report Flipkey.com is doing well and would like to share concrete examples of how Compete data helped us successfully get FlipKey.com off the ground.
Sizing the Market — Leverage Traffic Statistics to Measure the Opportunity
I will not profess to be an expert in writing business plans, but I can say that any decent business needs to know its market’s potential. If you can’t provide evidence of "how big" you could be, then there is little reason for people to get excited.
Vacation home rentals provide a great lodging option for vacationers. There are over 6M second / vacation homes in the United States which are rarely occupied by the owners. To help pay the bills, many of these second home owners will rent their beach homes, winter chalets and lake cabins to vacationers looking for a more personal, and often more affordable, lodging experience. It’s a brilliant example of P2P commerce; however, the potential can only be measured by how many consumers are aware and interested in staying in a vacation home vs. a hotel / resort.
Using Compete data, FlipKey measured how many people actually considered a vacation home accommodation as determined by unique visitor traffic to leading vacation rental listings sites (e.g. vacationhomerentals.com) and vacation rental property management sites (e.g. allstarvacationhomes.com).
Using Compete data we were able to determine over 30M domestic consumers consider vacation rentals each year. When accounting for the popularity of vacation rentals in Europe, we were able to confidently estimate over 50M consumers worldwide are seeking these unique accommodations"¦
Customer Acquisition — How will you attract visitors and how much will it cost you?
Last year I attended the Web 2.0 Summit in San Francisco and was able to listen to Reid Hoffman (PayPal, LinkedIn, Angel Investor Extraordinaire) discuss the keys to a successful start-up. Reid boiled it down to one point, "what’s your customer acquisition strategy? If you don’t know or you don’t know how much it’s going to cost you then you don’t have a business".
I took Reid’s advice to heart.
Step 1: Using Compete customized "˜Site Referral’ reports, I was able to analyze the referral sources driving traffic to existing vacation rental sites. The data was pretty definitive — SEARCH (go figure).
Step 2: I knew it would take time for FlipKey to climb up the relevance rankings on Google, therefore SEM was the only immediate channel that could afford FlipKey access to substantial visitor traffic in the early stages of the company. As we all know, SEM can get expensive, so we needed to accurately estimate the types of key words we would need to bid on and how much they would cost.
Using Compete Search Analytics we downloaded a report of every search term in the Compete database over the last year used to refer visitors to sites in the vacation rental market. We then applied these key terms to the Google Estimator. After a few hours of copying and pasting we had a robust spreadsheet of 17K relevant key terms and a solid proxy for how much SEM would cost.
Buzz and Awareness — Let the words of consumers sell your value proposition
FlipKey is focused on delivering a community driven travel site to help consumers find trusted vacation rentals throughout the world, by providing real reviews of verified vacation rental properties. It’s easy to find reviews of hotels online, but nearly impossible to find a robust collection of vacation home reviews.
FlipKey works directly with vacation rental managers to provide a proactive guest review cultivation system. To help highlight the potential of guest reviews in driving more bookings, FlipKey conducted a survey of 400 consumers through Compete’s behaviorally targeted survey panel.
Relevance of Sample: Compete contacted consumers who exhibited interest in staying in a vacation home based on visitation to leading vacation rental listing and manager sites.
- 78% of vacation renters indicate they are significantly more likely to book a property that provides feedback from prior guests
- Only 16% of vacation rental guests were asked to leave an online review
- Had all participants been asked to leave a review, 81% would have recommended the unit, 16% were neutral and only 3% expressed a negative experience
By presenting the words and opinions of real consumers as measured by Compete’s survey panel, FlipKey was able to communicate its value proposition to the market and provide valuable research that had not previously been available.
As of today, FlipKey has been a live service for little over two months and already represents 50,000+ vacation rental properties. Over 50 management companies have begun using FlipKey’s guest review platform and several partnerships are underway to bring FlipKey to an increasingly wider audience, both domestic and abroad.
Starting a new business and/or creating a new product requires more than data driven insights; however, I am witness to the advantages afforded by leveraging unique data sources like Compete to develop a business plan, guide tactical strategies and effectively communicate a service’s value proposition.