Sunday, February 21, 2010

Discount travel's missed opportunity

It's not the sites themselves -- for the most past Hotwire, Priceline, etc. do a good job. However, it seems like a memo has gone out to every rental car agency and hotel that sells discounted cars and rooms to these sites to treat people booking via these sites like second-class citizens, which creates enormous badwill. There's a big missed opportunity here.

Let me give you an example: the cheapest rental car I could find for a recent trip of the type I wanted was $98.00 per day, but the price on Hotwire for the same class of car was $28.00 per day. What did I give up for the $28.00? Well, I gave up the convenience of going directly to my car off the bus, potentially getting a nicer vehicle via a free upgrade, and that's about it. What did I get in return? A reminder from the check-in person not less than 3 times that I had rented via Hotwire, a warning that I would be charged $120 for the vehicle if I brought it back even 1 minute after the return time I punched into Hotwire when I rented it (tip: on Hotwire, make your return time the same time as your flight time to ensure this doesn't happen to you), 2 attempts to try and upgrade me to a "premium" vehicle, and a 5 minute lecture on why I should be accepting the insurance because, get this, Hotwire doesn't provide me any protection (I've never had a rental car company offer me any free protection in all of the years that I've been renting cars).

Here's another example: I rented a room from for $98.00 and on the website for the same hotel, rooms were going for $210.00. For this particular hotel chain I happen to have pretty high status, but the person at the desk unapologetically informed me that because I booked with, they would not recognize my status, I would not receive any points for the stay, and I would receive none of the amenities (normally consisting of a couple of bottles of water and a bag of pretzels) that I normally get in my room. The really interesting thing was that their computer system had obviously correlated between my reservation and my chain profile -- I know this because the aforementioned statements were made preemptively before I even asked.

The discount travel sites are not to blame for this behavior, the rental car companies and hotels are. After all, the rental car companies and hotels are the ones giving the inventory to the sites to sell -- goes back to that old saying: "If you don't want them to buy, then don't sell." Unfortunately, the rental car companies and hotel chains are not only allowing this behavior from their employees, but it really appears as though they are encouraging the behavior. However, the end result for someone like me is that when I go to choose a rental car company or hotel chain to affiliate myself with and/or give the majority of my business, I'm not going to choose one that treated me like a criminal for purchasing through a discount travel site.

Of course, the rental car companies and hotels could turn this around. They could view each person that walks in the door as a potential lifetime customer of the brand and treat them as well as a loyal purchaser. Instead of being upset or encouraging their employees to be upset about a customer not booking directly, they could decide not to care what the purchase vector was and simply treat the customer like a customer. One key portion of this to ensure that customers, especially recurring customers, are booking directly would be to give them access to the same rates as the discount travel sites and/or be willing to match the price on the discount travel site (note: the only chain that I've known that will do this is Starwood, but you have to call the 800 number and tell them the price that a discount site is quoting -- in most cases they will match or get very close to the same price).

Remember when loyal customers used to be the most rewarded for their business by receiving the best pricing and service? There needs to be a shift back to these practices.

Saturday, February 13, 2010

The potential limitation of Verifone's PayWare Mobile

Verifone's PaywareMobile seems like a great idea. The first question that I had, of course, was whether it works on an iPod Touch. It doesn't. And there's a reason.

In finally getting to someone at a Verifone reseller, I was able to determine that the PayWare mobile application, which takes the data from the swipe unit and transmits it to Verifone actually initiates a call using the voice network -- no GSM chip, no cellular call, so no iPod Touch. Supposedly Verifone is working on a newer version that should be available in the next 6-12 months that uses either cellular or wifi data.

Here's the pricing reality:
  • iPhone at $99-$700, depending on which one you choose and the level of subsidy.
  • iPhone data plan at $30 per month (required for activation).
  • iPhone voice plan (needed for the application to work) of at least $20 per month.
  • PayWare sleeve is free (with a 2-year agreement)
  • PayWare software is free (from the iTunes App Store)
  • $19 per month fee (what I was quoted) per sleeve
  • $0.25 per transaction (what I was quoted)
Consider this instead:
  • iPod Touch at $199 to $499, depending on the one you choose.
  • WiFi data is free (assuming that you already have the infrastructure or can hop on free WiFi somewhere)
  • Various credit card apps on the iTunes App Store -- $0.99
  • Transaction fees -- vary by provider, volume, type of card, and whether or not the card number is typed in or swiped in (1.8%-3.8%)
I'm very interested to see other products, such as the Mophie Marketplace, that allow swipe integration into existing applications that support authorization over the data network instead of initiating a cellular voice network authorization.

This is going to be a war that is unlikely to be won by Verifone if they don't divorce themselves from voice authorization. Furthermore, they're really going to lose if they can't get this working over WiFi because they totally leave out the iPod Touch (and the iPad).

Wednesday, February 10, 2010

Scorched earth

The policy of scorched earth is an old military tactic that essentially involves destroying anything left in your path that might be useful to the enemy. In the past this was most easily accomplished by burning everything behind your army as you moved forward, hence the "scorched" part of the term.

It always astounds me the companies and individuals employ scorched earth policy when dealing with people that have been fired/let go or being fired or let go respectively. Perhaps it's because I work in entertainment and it seems like such a shallow pool that all of us in entertainment play in: you never know when someone that you employ scorched earth against may be in a position to do harm or good to your career in the future. (my sense is that many industries are just as tightly knit as entertainment, but entertainment is the vast majority of my experience).

In my time I have seen companies ruthlessly enforce non-compete agreements that are so restrictive former employees could not continue to work in the industry; this for people that they laid off, didn't even terminate for cause. Further, I have seen companies initiate lawsuits against former employees (even laid off ones) for violations of non-competes, knowing that they would not win, but wishing to be punitive and cause the employees significant out-of-pocket dollars to defend against them. Note that a number of times I have seen these employees wind up in decision-making positions and either actively or passively ensure that they company that employed scorched earth against them was unable to do business with them or any of their colleagues that were willing to listen.

On the employee side, I have certainly encountered ex-employees that have not had nice things to say about companies or people at companies; pretty normal response and forgivable. However, I have also seen ex-employees that have actively engaged in attempting to overtly disrupt company business operations. In almost every overt case that I have seen, the ex-employee may have been able to cause some short-term pain to the company, but has never succeeded in the long term. Further, I have seen ex-employees employing these tactics blackballed in the industry because word gets around quite quickly about character when an ex-employee attempts to employ scorched earth.

Sure, you can believe that business is war and take some learnings from that, but I do not recommend scorched earth as any sort of sustainable, long-term strategy for businesses or businesspeople.

Sunday, February 07, 2010

When life gives you lemons

You can be like MacGyver and use them for battery acid.

You can make lemonade.

You should watch this video just in case you get a lemon delivery.