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The emotional marketing strategy of HostelWorld’s CMO

customer centric strategy customer centric strategy
Photo credit:

Chris Goldberg 

Ottokar Rosenberger has transformed the hostel platform into one that emotionally connects with its travellers with depictions of adventures, new people and authentic cultures.

“I fuse a customer centric strategy approach, which is now in vogue, with a deep understanding of technical marketing and data.”

Ottokar Rosenberger, HostelWorld Groups CMO, is a marketeer by trade, with over 10 years of experience at Proctor & Gamble, BT, eHarmony and Betfair, and after those stints, sees the value of placing a customer centric strategy central to a brand’s operations.

Which will be a key outlook for this sector’s largest platform of hostel accommodation.

HostelWorld Group’s success is apparent: it now has 33, 000 properties in 170 countries, operating in 20 languages, but as the travel industry – and the sharing economy – transitions to adopt new technologies and disruptors, dot-com companies such as Rosenberger’s needs to position itself so it benefits from the effects of innovation.

That positioning involves “operating effectively across all platforms and devices, where mobile plays a large part of our business.”

Which is true of any marketing strategy in most industries today.

Mobile has transformed the way in which customers interact with brands and services across a wide spectrum of sectors: from financial services to social media; gaming to healthcare.

In travel, however, Rosenberger has had to recognize and add another important dimension to his strategy: the customer, hence their customer centric strategy.

When Rosenberger accepted his position at HostelWorld in August 2014, he first observed how the company acted in its activities, and how he could improve its effectiveness.

“It used to be a very transactional business, not unlike a travel agent, where every stage was optimized to make the process as efficient as possible…but in a world where everybody does this, where everybody uses AB testing, those incremental gains lessen year upon year.”

That realization forced Rosenberger to change tact.

“We needed to think about how to shift our focus onto the customer, and to understand who they are. That required the necessary team and capabilities that we have built over the past year.”

 

Customer centric strategy

Who are your customers, and what do they want?

That hasn’t been a common question to ask up, until recently. All too often marketing strategies focus on the product knowing, that it’s the link between brand and consumer, a link that needs nurturing, sometimes at the expense of both entities.

“It’s slightly different [in travel]: we are a challenger brand, we’ve inherited niche players and we don’t have large marketing budgets – less than 5% of media spend in the UK in this category comes from us – so we turned our attention to a customer centric strategy to understand their experiences and how we can facilitate that.”

There’s also a personal element for Rosenberger that he has brought into the campaign.

“I took my first flight when I was 14, alone, and it changed my life. I went on to live in the UK and USA, and I’ve taken my kids everywhere, from Morocco to Rwanda, Mexico, Bangladesh and Peru. They’ve all been very emotional journeys with unforgettable moments.”

Emotion has since become central to HostelWorld’s campaign.

Their customer centric strategy forced them to question 10 different markets across the globe, talking to over 4, 500 customers, in order to gauge the emotional responses of backpackers, globetrotters and adventurers on a shoestring and their journeys.

Rosenberger expected to hear answers that included price, location and quality of hostel, but what they actually found was an expression of meeting new people.

“Travellers wanted to be in a certain location, sure, but they also wanted to experience the local culture and the people alongside that. They don’t bring back souvenirs, they bring back memories.”

So instead of being a roof over one’s head, the hostel becomes a social hub, a springboard into a new environment which millennials can dive into, alongside friends and strangers.

In the industry, this trend is called a “turbocharged experience” – it’s richer, more unique, and unforgettable. The benefits of discovering this dimension to their customers journeys was in the curation of their new customer centric strategy and brand campaign.

“These stories helped us to define our role in this market: it’s about enabling our customers to have those experiences, that’s our story which we need to tell from a brand perspective.”

This development led to the term emotional storytelling as a marketing strategy, though Rosenberger is quick to add that it doesn’t have to be a tearjerker:

“It’s not a christmas ad! However it is a task that lends itself well to the travel industry, we’re a case study in that sense, and we’ve implemented it throughout our company.”

For a start, HostelWorld changed their old logo and tagline.

Gone is the old, blue, logo with incorporated bunk bed and the “.com” at the end of the title. It has been replaced with a less product-centric design and different colour.

“The ‘H’ is made up of two arrows meeting looking at it one way, and two faces looking at each other too. It’s about the concept of being a place to meet, and the orange colour represents affordability and adventure, obviously.”

Meet The World is then emblazoned in a central position on the site. It’s in a handwritten font to make it more personal as “everyone has their own story to tell.” The imagery too has been adapted to be aligned to its customer centric strategy, more focused on the people you share your experiences with, rather than panoramic vistas.

Think 20-somethings laughing atop of exotic rooftop bars, drinks in one hand, firework sprinklers in the other. It’s fun, exciting and seemingly spontaneous – elements they believe their customers have in abundance.

Indeed, this was the inspiration for their advertising campaign involving a group of young travellers skinny dipping in a Mexican sinkhole.

“Once you have your meaning and position noted, you then have to tell your story in a very single-minded manner, and we wanted to focus on the extraordinary people and adventures out there. That’s definitely skinny-dipping in the middle of Mexico!”

Much to the initial suspicion of the media, HostelWorld also used real backpackers, not actors, which they filmed enjoying their travels and, crucially for their new campaign, meeting people for the first time.

That was no accident, and further promoted the authenticity of the brand and customer centric strategy that Rosenberger wants to project, as well as adding to the emotional element of the advert and the brand itself.

It’s important though that those messages aren’t lost on different channels and platforms.

“Around 45% of our business is conducted via mobile, and 90% of our customers are less than 35 years old; it’s a big shift we have had to react to internally by building specific mobile teams and dedicated iOS employees for native advertising.”

This has meant HostelWorld’s customer centric strategy can operate quickly to the demands of its customers; unlike other sectors, or players, its customers book trips only a matter of days or weeks beforehand, and expect service to be as efficient.

Then HostelWorld has to navigate between the online and offline worlds.

“It’s interesting to think that here we have the original social network with bunk beds as the original sharing economy; we operate in a space where people are open to sharing parts of their lives before and after the stay.”

Rosenberger sees those two stages as the offline experience which, almost uniquely, is more important to the brand than the online.

“Both [online and offline] are connected and our platform doesn’t exist in a purely digital manner; our customer’s experiences will continue far past the hostel and it’s for us to now ask ourselves how we can improve that, or at least feature in it.”

It’s certainly a trend that’s running opposite to many industries and sectors scaling into the digital world with the conscious effort to reduce their physical, or offline, existence.

“What do we do when someone comes home? What are their experiences? How can we help with that? For us it’s now about connecting the dots.”

It’s also about connecting their emotionally directed campaigns and a customer centric strategy with objective data analysis, now integral to any marketing department.

“It’s an interesting journey we have found ourselves in in terms of data, and there’s an organisational question over who owns the data and where does it slot?”

For Rosenberger, marketing has undergone a massive transformation – on the same scale at technology itself he believes – and for him, having immediate real-time open access to data is a prerequisite to performing in his role effectively.

He has therefore hired a team around him to facilitate this data transformation.

“We’ve got a marketing tech team and data analysts that sit within a marketing function; we build a lot of in-house analytics because you can’t ask agencies to do the data for you, and building relational databases are relatively affordable.”

This has also allowed HostelWorld to maintain its position as a market leader, without the big budgets afforded to by its competitors.

“Technology is a leveller because it allows me to be just as good as the next guy without large source of capital. The challenge for us is then not about what to do with such a large amount of data – it’s actually quite manageable – but how smart can we be in utilizing it?”

Looking forward and Rosenberger can see the marketing industry changing once more.

“There will be a shift away from paying advertising: there are 200 million ad blockers in the world today, and they’re getting better, and actually being implemented.”

It’s easy to imagine how the effects of this would be overwhelmingly negative, not least because the main revenue stream of publishers would collapse. This would test the mettle of any marketing department.

“Content will become even more important, as will the skill of curating a message out of the content be – marketing teams will have to refine this, especially if they are in a content-rich industry like ours.”

Which is how Rosenberger likes it: with a content rich dialogue, the process of creating an emotional campaign becomes even more of a vivid and exciting journey to showcase to existing and future consumers, which compliments his customer centric strategy as well as the technical elements needed to stay competitive.


Hot Topics spoke to Ottokar Rosenberger at the Centaur Festival of Marketing, London.

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