In this #mtpcon Digital Americas keynote, Lenny Rachitsky, writer and former Product Lead at Airbnb shares the story of how his team transformed the company’s booking conversion rate from 50-85%, accounting for ‘untold billions of dollars in revenue’, by thinking really big.
Watch the talk in full or read on for the overview. Mind the Product members can also watch the recordings of all our #mtpcon Digital Americas talks here.
Lenny starts by explaining how, when joining the company in 2012, the Airbnb user journey of searching for accommodation, contacting a host, requesting a booking and receiving confirmation had the success rate of a ‘coin-flip’. It was only through The Magic of Thinking Big, which “encourages you to look at things as they can be, not as they are”, that the team were able to take advantage of this potential and revolutionise the business, though not every step was straightforward.
The first solution Lenny and the team developed was Airbnb Match, a feature that sent multiple booking requests to hosts based on a guest’s accommodation preferences. Lenny describes how the feature was quickly shelved after guests became frustrated at the slot-machine-like experience, which left hosts bombarded with low-intent requests.
The failure of Airbnb Match taught the team to challenge the current business outcomes – to no longer assume the 50% conversion rate was unchangeable, or to “create this bandage around it”.
The next features developed over six months directly targeted the conversion rate, though Lenny admits they were “still thinking small”.
- A countdown clock timing response rates
- Adding acceptance and response rates to public profiles and tying the metrics to search rankings
- Host-facing dashboards with pending requests and urgent actions
- Making rejections trickier and pausing listings if rejections were too common
With a 5% increase in conversions after six months, Lenny saw a “really big dent in the scheme of things of a large marketplace like Airbnb, but it was nowhere near what we were hoping to achieve, it’s still basically a coin-flip.”
Taking inspiration from big ideas such as Airbnb CEO Brian Chesky, who had focussed the company strategy around making keyframes of the user journey amazing, Lenny decided to take a step back and imagine the ideal booking experience, as if they building a new company looking to disrupt Airbnb. Now the user journey was surprisingly simple: “you just book..you come to Airbnb […] make this coin flip, just a winner every time”.
The team realised they could achieve this level of ambitious simplicity by streamlining the booking funnel and utilising an already developed, but underused, Instant Book feature.
In order to get business buy-in and take the Instant Book tool adoption from 5-100%, Lenny had to do the following:
- Listen – Understand and document concerns and fears, find out the assumed outcomes of pursuing this path
- Use data – Use data as a lever to assuage any initial concerns you can and share data as projects progress
- Experiment – Run experiments frequently and agree on a process of pulling back if problems are realised
Steps to success
Lenny describes how to “approach this, we started to break down the problem by working backwards from where we want it to land”, looking at first ensuring everyone could use the feature, before helping both guests and hosts benefit from it. Here are the areas they worked on:
- Eligibility: Guests were previously only able to use Instant Book after securing three other bookings. Lenny and the team reduced this to 2 and saw no downside. Next, they gave the feature to hosts immediately with no constraints on booking numbers which equally had no negative effect and drove adoption from 5-10%.
- Education: To help guests understand the value of the feature, Instant Book was added to the accommodation search filters, helping guests prioritise a large list of properties, by those which allowed them to book faster and with a higher success rate. This improvement upped usage to 30% and while it was a guest-facing improvement, host adoption rose after seeing how guests would preference hosts supporting it.
- Empowerment: To alleviate fears of long-time Airbnb hosts, the team added tools to help property-owners be more successful in accepting bookings. Examples include calendar improvements and guest preferencing options such as allowing Instant Books from guests with Government ID or positive ratings.
- Persuasion: A lot of time was spent on outbound emails and communications, using data and marketing strategies to show the benefits of Instant Books.
- Onboarding: Overtime the onboarding experience was also improved as “a huge part of your user base becomes people that are new”, Lenny explains, these are the people you can onboard to use new tools as standard.
After investing in the Instant Book feature and making countless improvements, Lenny and the team saw booking success go from 50% when they started to over 80%. “Even though we didn’t reach 100%, we basically transformed the way Airbnb worked forever. A world where every host is going to be it’s typical well there’s too much of a long tail of nuanced issues that have.”
Lenny finishes by encouraging us to think big, taking a step back to understand the ideal experience we want to promote and to also “look at things as they can be and not as they are”.
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