Indira Institute of Management, Pune

MBA Sem III

Subject: Customer relationship Management
Assignment No: I
Topic: CRM Implementation at Airbnb

Name of Student
Tejas Aher
Onkar Kulkarni

Roll no and specialization

(Marketing A-04)
(Marketing B-27)

Date of Submission 21/11/2016

What is CRM?
A comprehensive strategy and process of acquiring, retaining and partnering with selective

customers to create superior value for the company and the customer. Customer relationship
management (CRM) is a term that refers to practices, strategies and technologies that companies
use to manage and analyze customer interactions and data throughout the customer lifecycle,
with the goal of improving business relationships with customers, assisting in customer retention
and driving sales growth.
CRM systems are designed to compile information on customers across different channels -- or
points of contact between the customer and the company -- which could include the company's
website, telephone, live chat, direct mail, marketing materials and social media. CRM systems
can also give customer-facing staff detailed information on customers' personal information,
purchase history, buying preferences and concerns.

Components of CRM:

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Levels of CRM :
1) Strategic Level
Knowledge about customers and their preferences have implications for the entire organization
2) Customer Level
Set of activities that provide a single-view of the customer across all contact channels Customer
intelligence obtained is available across all customer-facing functions
3) Functional Level
Set of processes to execute marketing functions like sales force automation or marketing
campaign management

Implementing CRM at Airbnb

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According to Michael Tchong (2013), Gartners forecast for customer relationship management
(CRM) for the year 2017 is $37 billion. It makes CRM software the biggest corporate software
market, even larger than enterprise resource planning (ERP). The writer further explains that
there are 1.1 billion mobile users out of the total global workforce of 3.4 billion. The data
suggests that out of 1.1 billion users, only 15 million people use any software designed to
manage relationships. It can be concluded that only 1% of the global workforce uses CRM tools
CRM is important for business as it connects and builds a relationship with the customers.
According to Forrester research, the three types which are reinventing CRM are mobile, cloud
and social media. Businesses have to make sure that they acquire CRM tools; to service
customers better. CRM is fundamentally vertical business, if businesses want to automate and
optimize. It is not just the lead to quote process or better run a call center but truly help
businesses manage the relationship with their customers.
If an anyone is renting a vacation home, they and the hosts are now in a relationship that must be
managed from booking the home to taking care of paperwork. Airbnb, which provides a platform
for travelers and hosts to interact, does not require any paperwork. Airbnb is a complete CRM
because it allows the travelers and the hosts to manage all aspects of the relationship.
Airbnbs platform, website, mobile and social media are a complete package with respect to
CRM. The brand interacts with its customers on a regular basis, from information sharing to
booking to customer service. The brand had been successfully creating a relationship with its
customers by CRM from the new customers to the regular users.
The brand has implemented its CRM strategy with the launch of its new website and mobile app.
Airbnbs mobile app is the solution to customer-facing process as it helps travelers and hosts to
book and upload hassle free. Many customers use social media to interact with the brand and
with the help of HootSuite, Airbnb connects with the customers on real time basis. The brand
uses Twilio to connect with hosts on booking decision that speeds the process of transaction. By
using multiple CRM software, Airbnb is learning customer behavior and the experiences help
them to serve better.

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CRM Program
Airbnbs CRM gives a 360-degree interaction which helps them interact with their customers,
travelers and hosts. When a traveler or a host signs up an account with Airbnb, the system sends
an automated mail for double opt in login. After the confirmation, the system sends a welcome
mail with offers to rent out. Airbnb successfully connects with the customers regularly and starts
a conversation. For example: If anyone has booked their stay at London, during the week leading
up to his arrival, Airbnb will send a simple postcard-style email that links to curetted events and
activities recommendations in London city.
Airbnb uses Twilio, as their CRM system to connect with hosts. When a traveler makes a
reservation through Airbnb, the host has 32 hours to respond to a booking request. Before Twilio,
hosts who were not at their computers would take time to respond, even if they were interested in
the booking. Airbnb customer care had to call the hosts manually, requesting them to accept or
deny the booking request. Airbnb chose Twilio, to systematize mobile communication between
hosts and travelers using a text message. If a host has not responded to the request, they receive
an automated SMS message from the system with information of the travelers and booking
request. Hosts can then reply to the message with their decision to accept or reject.
Airbnb uses HootSuites social media management system to manage thousands of conversation
around the globe. The analytical tools monitor Airbnbs followers growth and social CRM. The
system tracks certain keywords over time so that Airbnb can strategize social campaigns
accordingly. Airbnb uses these tools to educate and spread the word of what they offer, why they
are good and how they are different. The tools help generate relationships, strengthen the
community and communicate with global networks. Anyone who joins Airbnb on Twitter or
Facebook and starts a conversation on these social networks, HootSuite helps Airbnb to be a part
of it.
Customer Service Policies
Airbnbs initial customer service operation was humble, a guy with a cell phone. The guy was
Joe Gebbia, one of the companys founders. Whenever a customer had a problem, they would
call on customer service number and the line would patch through to Gebbias phone and he
would solve the problem. Jim Edwards describes in his article that Airbnb goes to extreme
lengths to please their customers. Airbnb now has hundreds of agents available on phone, chat
and email, 24/7, in every time zone and 30 different languages. The brand aspires to provide
highly personal service and to give customers peace of mind by being for them whenever they
need help or have queries. Maia Mittner tweeted on 10thJune that she wished she had a stroller
for their upcoming guests, who had to arrive on 11th June with a young child. The Airbnb team
express delivered one, before the guest checked in the next day.

Web Site Navigation

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Usability is probably one of the most important things that attract users to websites. Airbnb is an
example, where its webpage is easy to navigate and encourages a sale. Jacob Kleinman (2014)
explains that, in July, Airbnb rolled out a redesigned version of its mobile app and desktop site.
Airbnb website is full of high-resolution pictures and short videos. The writer further explains
that scrolling down; the website highlights popular destinations and apartments with good
reviews. The mobile app also offers a simplified experience, guiding the user towards listings
hassles free. Airbnb has created a website, which is user-friendly for hosts to upload good quality
pictures. The pictures are everywhere on the website for prospective customers. The
neighborhood map on the website is larger and the neighborhood details have a prominent spot.
Even though the navigation on Airbnb is fluid and the design is well thought, they never forget to
lead their visitors to their objective of booking. The website does not miss any occasion to
present alternatives to the visitors nor to showcase relevant callto-actions. Airbnbs focus is to
show its trusted community and make people feel good about it. This is the feeling one should
have while visiting the website and that is reinforced through the use of the pictures illustrating
their web design.
Customer-facing Business Processes
Paul Harmon (2003) explains that customer facing is the manner in which a business service
feature is experienced or seen by the customer. The writer further explains that it is a key
customer relationship management (CRM) component; a customer facing business process is
designed to deliver satisfying user experiences via all customer touch points. A customer facing
process is more than an interface; it should add value to relationships with customers and is often
used as a tool for customer analytics. Airbnbs mobile app is one of the examples solving the
purpose for the brand where it is easy to navigate, shop and brands can generate reports on
customers usage patterns. The writer further explains that customer facing process can be called
as front-offices processes too as it communicates with the customer about its products and offers
a product for sale.
Airbnb is one of the most popular platforms when it comes to finding affordable vacation rentals,
apartments and homes to rent. But what CRM software do they use, and why does it matter?
Airbnb has more than two million properties available to rent. They are undoubtedly one of the
fastest-growing property platforms that serve millions of people around the world, and help
tourists and holiday-goers to find the perfect accommodation option when they travel.
They represent more than 34,000 cities in more than 190 countries around the world, which
include 1,400 castles, and with a rough valuation of $30 billion in 2016, businesses both new and
old can benefit from using Airbnb's business approach as inspiration.
Not only is their success impressive, but the ways in which they handle their business and their
customers are also admirable. Like many other well-known brands around the world, Airbnb
believes in a shared economy making use of modern technology to effectively share and
distribute their services.
Using CRM in Airbnb
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So, what does their sharing economy mean for your business? Its all in the detail. Although its
no secret that companies rely heavily on CRM systems, much of the data contained herein is
often restricted due to privacy settings, whether intentional or not.
This also means that much of your critical relationship data is sitting tightly hidden unavailable
to be used as new business potential.
In the case of the Airbnb business model, they rely on their CRM software for almost every
action they complete. When a customer visits Airbnbs website and completes an enquiry, the
information gets stored in its CRM system.
When a room is booked, that data needs to be effectively captured, stored and made available to
the relevant people and departments.
Not to mention all the financial transactions and even refunds and trip amendments that need to
be processed on an hourly basis. The list goes on, and its all cleverly handled by their CRM
software.
But Airbnb doesnt stop there; they use their CRM applications to send out, keep track and then
measure the performance of their attractive email campaigns - just so they can tweak their
processes and improve them time and time again. How do they keep this all together?
Making the Connection
The way Airbnb uses its CRM software is just one example of how effective it can be for your
business. It doesnt have to resemble another companys system exactly its effectiveness can
come through in how scalable it is to your specific needs.
So, how exactly can you make a CRM system work for you? Here are a few benefits you should
consider:

It will grow your business. Shared data can be distributed within your company and
create new leads for you and your sales team.

It will increase your revenue. Leverage your existing relationships to gain a competitive
edge and grow your business effectively.

It eliminates missed opportunities. No more hidden data; use all the information
available to you to identify business opportunities.

It speeds up your sales cycle. All customer activities will be in one convenient view,
speeding up most of your business and sales processes.

It reduces your operating costs. Spend time and money on existing opportunities,
instead of having to find new leads.

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How to Be the Next Unicorn

When it comes to Airbnb, customer relationships are what its all about. Its their main asset and
also what drives their continuous success. This is an excellent business model for you to use and
customize to suit your needs.
Sharing information is not always the first thing that comes to the mind of business owners and
sales managers, but it should be one of the main focus points. It will improve communication,
support team collaboration, and most of all, help boost your productivity and sales.
ENGAGEMENT value creation proposition (including network effects): AirBnB creates value
for its both customers in different ways. For guests: it gives travellers the option of cheaper
accommodation, which is especially important in cities like New York, London, Paris, with low
availability of budget accommodation options. Also, it allows travellers to experience their
destination less like a tourist and more like a local by staying at locals places rather than
standardised hotels, which for more special experience during travelling.
For hosts: the primary benefit for hosts is the ability to receive additional revenue by short-term
renting out of their homes (or rooms in it). It is also argued that AirBnB has creates social value:
it brings tourist money to less visited neighbourhoods and it serves a complementary to hotels
allowing for overflow when hotel capacity is stretched. DELIVERY - the value chain: AirBnBs
website provides a search engine, which matches customers to properties, sets prices, flags
potential problems. AirBnB takes a number of important measures which enable establishing
trust between the two transacting parties, such as identity verification. To use Airbnb, site visitors
search for listings in their destination city. Once they have found a place, they can send a
message to the host with any questions about the room or its location. Then they pay for the stay
in full using a credit card or PayPal. Airbnb holds the money until a day after guests check in,
ensuring that they are not swindled out of their cash and that the guests are treated well.
Hosts list their properties on AirBnBs website. Airbnb encourages hosts to provide as much
information about themselves and the property as possible and offers them a professional
photographer for their property. Hosts with good reputations get more business. Through Airbnb,
guests and hosts can verify each other's driver's license or passport, e-mail address and phone
number, and connect Facebook profiles. The host and the guest agree on the convenient method
of exchanging the keys. Afterward, guests and hosts rate each other online, so there is a huge
incentive to deliver a good experience because bad reviews means less ability to participate in
the market in future for both hosts and guests. Airbnb also automatically provides $1 million in
insurance against damage or theft to nearly all of its hosts (some countries have restrictions) and
only rarely gets claims. MONETIZATION value capture: In exchange for providing the market
and services like customer support, payment handling and $1 million in insurance for hosts,
Airbnb takes a 3% cut from the renter and a 6% to 12% cut from the traveller, depending on the
property price.

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