NEWPORT BEACH, Calif. — Before becoming the chairman of Kayak.com Terry Jones had an idea: Travelocity.
That concept 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 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. Financial services is going the same way.
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Consumers don't visit company's websites for what the company is; they go there for what it can do. Jones stated, for example, "I want a hole. I need a drill."
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. "If you do a good job, you'll build trust," Jones said, adding that credit unions already have the trust of their members.
There are also marketing and cross selling opportunities that crossover 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?
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.
"Coaches don't throw people off the team; they make the team better," Jones said.
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