Introducing the Ctrip customer-centricity playbook for global supremacy

Ctrip’s first quarter 2018 financials contain some impressive triple-digit growth figures, while chairman James Liang used the prepared remarks part of the earnings call to explain how Ctrip’s customer-centric approach is geared towards creating “not only the best travel service provider in China, but the best in the world.”

He acknowledged however that the focus on the customer might impact earnings in the short-term, a small but significant shift in that Ctrip’s execs have previously talked in terms of building market share as an immediate headwind on earnings.

Liang was very structured when outlining the theory and practice of Ctrip’s customer-centric philosophy to analysts on the call.

He started with the principles:

  • “transparency” – being upfront about price, service, cancellation policies etc
  • “optionality” – making it easy for customers to cancel and opt out of products and services
  • “consistency” – using tech to keep prices the same across different pages and channels
  • “impartiality” – making sure the product ratings are objective and based on customer feedback.

He then outlined the net results from implementing these principles. Ctrip  will:

  • “be reliable”
  • “be proactive”
  • “provide strong customer assurance”
  • “reduce customer mistakes”
  • “be responsive”
  • “be convenient and user-friendly”
  • “be comprehensive”

And finally, he explained what the business will do to help deliver the net results:

  • increase the weighting of [its] customer satisfaction in our evaluation system and incorporate service quality as a key measurement metric
  • invest heavily in service technology
  • set up an independent product rating committee to ensure that product ratings are objective
  • set up a customer protection committee that reports directly to executive-level management to enforce and monitor the implementation of these policies and targets

There is a lot in here which is familiar, but the scale at which Ctrip operates means delivering this is ambitious. But having prepped the markets for some short-term pain in terms of its earnings, resourcing the initiatives should not be a problem.

Elsewhere, execs offered some updates on its presence outside China, talking up the progress at Skyscanner and trip.com.

Skyscanner appears to have settled in smoothly to Ctrip following the $1.75 billion deal in the fourth quarter of 2016. Ctrip started mentioning Skyscanner in its earnings almost immediately, talking in its Q1 2017 results about how the integrations  were “moving much smoother and faster than originally planned” and how it was working with Skyscanner to develop its direct booking capacity for air ticketing.

That work appears to be paying off, with Skyscanner recording a 600% year-on-year increase in revenue from its direct booking platform in Q1 2018 compared with Q1 2017, when admittedly the Ctrip effect was still in its early days. During the first three months of this year Skyscanner added another eight direct booking partners to the platform.

Its other big international play is trip.com. which is becoming Ctrip’s point of sale for markets outside China. Trip.com was acquired by Ctrip in November 2017, so the year-on-year comparisons are tenuous, although the Ctrip impact within the first six months of owning trip.com was a “triple digit increase” in air tickets between the first quarters of 2017 and 2018.

Importantly, trip.com is, execs claimed, “gaining momentum.” Ctrip is working on developing its one-stop shop credentials, while it is probably no co-incidence that execs highlighted Trip.com’s accelerated mobile page getting the thumbs up from Google at its I/O Developer Conference 2018 a few weeks ago.

Photo by John Michael Thomson on Unsplash

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Martin Cowen

About the Writer :: Martin Cowen

Martin Cowen is contributing editor for tnooz and is based in the UK. Besides reporting and editing, he also oversees our sponsored content initiative and works directly with clients to produce articles and reports. For the past several years he has worked as a freelance writer, specialising in B2B distribution and technology. Before freelancing, from 2000-2008, he was launch editor for e-tid.com, the first online-only B2B daily news service for the UK travel sector.

 

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