NEWPORT BEACH, Calif. — When is failing 70% of the time good? Aside from batting averages, it’s also a positive for innovation, according to Kayak.com Chairman Terry Jones during the keynote session of CU Direct’s Lending Conference.
However, Kayak.com’s success wasn’t accidental. Jones also founded Travelocity and served as the chief information officer at American Airlines.
The idea of purchasing plane tickets online revolutionized the business. The introduction of an online travel agency changed pricing because of the lower overhead. In the meantime, it put 18,000 travel agents out of work because it nudged consumers toward self-service distribution. It also changed market share, making room for smaller airlines, such as JetBlue, that previously hadn’t had access to the clunky old travel agency system. Today, 65% of travel is booked online.
Amazon has experienced a similar trend, stating recently that it sold more digital than print books, Jones noted. The financial services industry is going the same way and credit unions must understand their role.
"Change is inevitable, but growth is optional," Jones said. "It’s up to you."
Consumers don’t visit a company’s website for what the company is; they go there for what it can do. Jones stated, for example, that consumers don’t want a drill. "I want a hole. I need a drill." Keep the end purpose in mind, he advised.
The downside in the virtual world is that people can’t lay their hands on products. Turning that into a positive at Travelocity, the company created the seat map–one of the most visited pages on the site–and something not offered in the real world. "Technique follows technology," he reiterated throughout his presentation.
And, Jones said, "If you do a good job, you’ll build trust."
There are also marketing and cross-selling opportunities that cross over to online. Jones explained that Zappos notified him when a particular shoe that he had previously purchased was going to be discontinued. Zappos had a few pairs in stock and would he like one of them?
In another example, Jones stated, "My printer sold me ink." His HP printer popped up a window with the link to the precise ink cartridge he needed to purchase. Jones reasoned that, sure it was a bit more expensive than in the store, but the decision to purchase was about speed and convenience.
Some of the best innovations come from the people on the front lines, so leaders have to create a culture of innovation. When there are failures–and there should be–punish the project, not the person who developed it, Jones advised.