How technology enables a self-described “challenger brand” to be more sophisticated in its marketing and more focused on customer experience is what preoccupies Hostelworld Group CMO Otto Rosenberger.
Hostelworld is the flagship brand of the Hostelworld Group and the biggest hostel booking website in the world. It lists 35,000 hostels and operates in 180 countries across 20 languages.
Rosenberger describes himself as a classically-trained FMCG marketer and brand builder. He worked for Procter&Gamble for ten years before moving into telecomms and tech-driven platform businesses. He ran the international business for eHarmony, then worked at online betting company Betfair before joining the Hostelworld Group. When I spoke to him recently, I started by asking how Hostelworld’s marketing function is organised.
Rosenberger: We run the site from headquarters in London and Dublin, with offices in Shanghai and Sydney, and we have a global centralised marketing team. If we decide to launch anywhere, then we do it from here. Without digital we wouldn't be able to run this. It’s a very basic point, but it is quite an important one.
I joined last August with the brief to put marketing and the consumer at the heart of the business. That’s what marketing brings to the table, particularly in high-tech, high-growth businesses. Let’s focus on the customer, less on the platform or the fad of the day, whatever that is.
The interesting question then becomes what are we trying to do? We are a challenger brand, so for us it becomes about the customer experience and what we can do to be better and more sophisticated in our marketing and in our approach to our customers. Tech then is a great enabler.
We can now provide the intelligence to the business and think about our tech platforms in a way that we couldn’t do before. The trend is towards bringing things in-house, which is an exciting development for us, and we have pushed that agenda quite a lot.
We obviously have strong agency partners and strong solutions in place, but it’s no help to us to understand the path of a traveller on Facebook or what they do with their iPhone if it’s not our customer. We need to think about the journey of our specific customer, rather than understanding what consumers do on Facebook. That’s great but that’s not the only channel. There’s a difference between our customer and one of our customers on their platform.
Connecting the dots is one of the biggest things we need to do in the next 12, 24, or 36 months, as an industry but also as a brand. We’re asking where all of our customers are across devices, across platforms, across products; so they might be on a desktop, a mobile site and the app. This is really interesting because in the wide world, mobile seems to be an app business, but in specific verticals the dynamics are different. Travel apps are probably accessed quite infrequently and actually 80% of the travel business is on mobile sites.
Then you need to think differently about your customer. The big question is whether your brand can get the customer to engage frequently on a mobile phone. If you have an app, and you have push notifications and so on, it makes a lot of sense. The issue for a majority of brands will be purchase frequency. Take an extreme case; if you buy a car, an app won’t be helpful because you buy a car every three years.
So we need to work out the place of mobile. Is it the right channel to communicate? If you think about travel, mobile is obviously massively important because the mobile is what you take with you.
This year in the US, bookings on mobile grew by 60%; next year they will grow by 40%. Clearly, being on mobile is extremely important to us. That value hasn’t been fully explored as an industry. How does that work, and how do we create customer journeys that align the channels and automate that as well, that help you along.
If we boil this down to Hostelworld, it has a strong desktop business because it’s a desktop-grown brand. There’s more than 4m visits a month. On top of that, we now have an extremely strong and growing mobile business, and our apps grow at twice the rate of our mobile site.
Then as a marketing team you come back to what you learned at the very beginning of your career, which is to become consumer-centric. We’re not platform-specific; we’re saying, “What is the consumer doing? Where are they and what do I need to do?” Then across all three platforms I get a unique and proper customer experience going.
CMO.com: Most of the people I interview for CMO are people who are coming from an established offline background. You’re coming at it from the opposite direction. How much offline do you do?
Rosenberger: You’ve got to ask what our customer experience is. You book on our site but the main experience is the travel experience and that’s very much offline. We run a Hostelworld Conference every year where we bring together the top hostel owners; they are our partners in the customer experience.
You can book through us and that’s great, but what you’re looking for is the experience. So while we are a tech business, the majority of the customer experience isn’t a tech experience, it’s an offline experience. Focusing on that opens a lot of routes to market and thinking through how we improve that.
CMO.com: Does management of that experience fall within your remit? There’s a lot of talk about the brand being the totality of the customer experience, but so much of that is traditionally outside the remit of the marketing department.
Rosenberger: What marketing people bring to the table is a way of thinking about the customer experience that ultimately drives customer acquisition and retention, and that’s how we impact the business. I have no need or desire to have people report to me, I don’t talk in those terms. What I’m talking about is bringing the insight and the intelligence to the business that says, “Let’s think about our customer, get data on the table that tracks that.” Then you excite people, because people want to know why they come to work. The daily sales volume is great but that’s not really why you’re here. Of course we’ve got targets and we want to hit them, it’s part of the excitement. But delivering an outstanding experience is even more exciting.
If you can show the customer service team how they impact what you do and how to think about the customer and how to serve them in a better way, they’ll be very open to that.
CMO.com: How much of an advantage is having the flexibility and openness that comes from being a relatively new organisation?
Rosenberger: Being a tech-driven business helps, because we have dedicated tech teams that deliver quite cutting-edge solutions. And as a marketing team, if you open yourself up to thinking like a developer would, it’s actually quite helpful. I call it algorithmic thinking; it’s certainly something we bring consistently into the marketing department.
If you work in a business that has legacy systems, you will have limitations-- mostly around speed, and bandwidth, and what you can get done. Having said that, you can always find a way to launch a beta somewhere. This is where agencies can help; building a beta product that’s maybe not fully integrated, not fully functional but helps you prove the point.
So not having legacy systems helps, however the cloud and the ability to crunch big data really fast enables big organisations to be quite nimble as well.
If you think about yourself as managing the interface between the customer and the experience, it changes your thinking completely and you stop thinking about the product. It’s just, “Well, what is the interface? How does it work? Where are the touch points and how do I need to interact?”
CMO.com: How does that change the relationship between you and the CTO? Do you think this idea that CTOs and CMOs are locked in a battle is a reasonable way of describing the world?
Rosenberger: It’s a flawed way. To run our business from a tech point of view--making sure that the lights are on 24/7, we don’t lose a single booking, and we have 99.999999% uptime--we need an engineering team, we need tech teams. Frankly, I wouldn’t know a single marketing career that would allow you to do that with the proficiency that we believe we run our marketing departments.
We should respect expertise. I know that my digital acquisition team, or my display managers, have expertise I don’t have and that’s great and I learn every day. Likewise a great CTO has expertise that I don’t think a CMO can cover. This conversation about who owns what to me is completely by-the-by. What we really need to understand is that marketing needs technology to function. Where the CMO comes in is being brutally clear about what we need to run our function.
Where marketing needs to get much better and where we certainly try and make the difference is being really clear about the technology requirements. Sometimes we forget the basics. Of course there’s the next big thing and there’s some outlandish, brilliant customer experience to be had, and a big app that does everything. But we’re saying, “Hang on, what are the basics? Do we have our tracking in place? Do we need a campaign management tool?”
A CMO needs to understand marketing automation tools. “What do they do? How do they work? How do they interconnect? How do I connect tracking, and tagging, and campaign management, and how do I understand my digital channels? Am I able to explain to the CTO what I actually need and how this needs to work?”
You need to understand that saying something like, “I need to be able to have the up-to-date data available every hour,” has a massive impact on how you structure your engineering team and how you deliver the engineering solution.
We obviously are quite ROI-focused, and we will only be able to deliver our ROI analysis based on good tech, and that’s also something people need to understand. You can’t just power up Excel, you need to have a sophisticated way to do, for example, control groups. What we need to do is bring a diverse skill set to the table. We bring together designers, data scientists, a lot of PhDs, and that’s the shift; we used to be in the creative space, now we have the customer experience that’s interaction with design. Then we have data and analytics which drives a lot of our decision making and which will become more important the more consumers look for us rather than us being able to push the message. Because it’s a multi-channel world, it becomes more important to be really good at data.