Loyalty programs are one of the most popular marketing strategies developed by firms and businesses across a wide range of industries. Despite the prevalence of these programs, there is only a limited amount of research that focuses on the stage before implementation. This research explores what aspects of loyalty programs Airbnb customers value, and attempts to understand what role loyalty programs play in a customer’s travel lodging decision. In order to research this, depth-interviews were conducted and participants participated in a Zaltman Metaphor Elicitation Technique (ZMET). Our main insight was that customers strongly preferred a points program where they can exchange points in return for car rentals, flights, and free stays. Additional insights included safety issues, location, price sensitivity amongst users, location, and the Airbnb app. After our interviews and ZMETs were analyzed, we came to the conclusion to update the Airbnb app with sections for reporting safety issues, plus a rewards point system that will give a customer 1 point for every dollar spent that they can use towards skymiles, car rentals, and discounts off of their next stays.
Team: 4 people
Time span: 1 month
We decided to conduct research to discover the relationship between loyalty programs and customers’ housing options/ According to our cost-benefit analysis, the benefits certainly outweigh the costs of conducting this research and the information gathered could prove useful in a future research project.
We chose the random sampling approach and our sample frame is the experienced Airbnb guests in the United States who have used it more than three times. Two main methods were adopted during the research, the direct unstructured one-on-one interview and the indirect unstructured projective technique (ZMET).
Our interview focused on personal experiences in Airbnb versus hotels, thoughts of their pros and cons, factors involved in housing options and thoughts of possible aspects in loyalty programs. We collected voices of customers by recording the interview process, creating the transcript accordingly and selecting useful direct quotes.
We grouped and selected the most essential direct quotes based on their relevance, identified customers’ needs and wants, and wrote requirement statements. The next step was to categorize the requirement statements again, come up with titles in two levels and build the affinity diagram. Lastly, we developed various possible solutions and redesigned the app.
“This picture makes me think of authenticity and that I’m staying at Airbnb my experience was authentic compared to staying in a hotel. I really like to feel like I’m getting a personal unique experience and build a relationship with the host which is something that you can’t really find in a traditional Hotel.”
“When I stay in Airbnb it’s very cozy, almost like a bed and breakfast.”
“When I go in somebody’s home there is a blank slate. I don’t know the host and the host doesn’t know me so we are both free to create whatever image we want to create, for better or for worse.”
“I have a fear of the unknown, especially when it comes to staying at strangers’ homes. Thankfully the review system on Airbnb let me know what to expect when going into someone else’s home that I don’t know.”
Safety Issues: many of our interviewees expressed concern of the unknown in new cities and the fact that they have no idea if the part of town they are staying is safe or not. “It can feel really uncomfortable when you first go there,” and “sometimes I think that Airbnb can be very gross depending on the host and who you might be living there with.” We found that many of Airbnb’s customers are afraid of the unknown and awkward encounters they may have with their hosts.
Location: we also learned that Airbnb customers really appreciate the unique and differing locations that they are able to stay in with Airbnb. “the nice thing about Airbnb is that they are everywhere, you can basically stay in any part of town that you want.” This provides flexibility, which we found is a value that our current customers find advantageous. It also provides customers with a sense of belonging and feeling like a local, which we found was very important to them.
Price Sensitivity: we discovered that Airbnb’s typical customer base are price sensitive above anything else. Our interviewees were quoted saying “Price first,” “Price. It is definitely number one.” These many quotes outline that with Airbnb’s customer base has selected them mainly for price above anything else. They also expressed happiness with how all amenities are included in this small price, which is something that is difficult to find in a traditional hotel setting.
The App: we also learned that customers care about having a streamlined, single-app experience, “Having the app on your phone that has so many different options is really nice and you feel more secure in the fact that it’s all through the same company” and “the consistency between everything you’re doing makes it really nice to book with them.” This creates a sense of ease and comfort knowing that all of the housings and details are listed in one trustworthy and easy to navigate place. This goes along with the safety and peace of mind ideas as well.
- An integration of a loyalty program and additional safety features into the already relatively efficient system that Airbnb has in place.
The Reporting System
To address the safety concerns, I decided to make Airbnb “more transparent, less unknown”. In my new design, the guests could upload pictures of potential safety issues such as broken locks, no window blinds and other basic security items. Currently there are review systems in place for Airbnb guests, but they are more general in nature. The guests record the feeling of the overall experience. This would focus specifically on the security of the apartment where they are staying. The guest would report an apartment that is not up to standard and, until the security issue is fixed, the host would be unable to rent the apartment to other guests.
The guests would have specific categories on which to review and report. The topics would include the safety of the neighborhood, friendliness of the host, the condition of the apartment and any other uncomfortable situations. The overall comfort of guests would increase by setting specific standards that must be met.
The Rewards System
Since Airbnb customers are price-sensitive, in order to enhance Airbnb’s brand loyalty, we need to take advantage of loyalty program that traditional hotels do. I designed a basic point reward system where guests collected a point for every dollar spent through Airbnb or recognized affiliates. The points could then be redeemed for any number of different services or vendors allowing for a diversity of expenditures coming from the program.
The points would be able to be used at many different services, such as car rental, flights and local Airbnb affiliated restaurants. The system would allow you to spend the points in the way that you want. The points also accrue faster than most loyalty programs because they are based off dollar amount spent. There is no stay limit or requirement. They can be used whenever they come in, or can be stockpiled for bigger vacations in the future. This allows people to realize the points they are gaining and feel that they can use them when they want and they are not limited to certain restrictions based solely off time.