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Advice for a Growing Niche

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If you're looking to advise people in Web commerce today, it's best to look where money is being made. There is such a niche, a niche that has transformed its industry just as the Web promised it would. That niche is travel.

One reason is that travel was heavily automated even before the Web was spun. The dirty secret of most travel agencies was that they were simply computer terminals, working with fairly-complex computers run by Worldspan or Sabre. At its simplest, the Web was simply a new user interface for this system.

That's what Expedia and Travelocity offered. And in most niches (like books) that would have been that--competition would have disappeared as the Web expanded past boom into bust. But that's not what happened--more sites popped up. The airlines tried to capture this value through their Orbitz site. Plus there are a host of “low-price” air sites like Lowestfares and Cheaptickets. These sites, such as Hotels.Com, often specialize in one niche.

The relative success of these sites (they're still out there pitching) proves there's a real industry here. What can they do to be even better? Here are several suggestions:

1. Usability studies. You don't just do these once. You do them continually, and you do them against your competition (to see how you're doing). The aim is always to tweak your site so it's as simple as possible for people to get what they need.


2. Your List Says Thanks. Many sites don't understand the purpose of their opt-in list. It's not a one-way up-sell. It's a two-way means by which you say “thanks.” You must always include a clear means through which recipients of your mail can reach a person (not just a machine). And give your best customers a way to profit from referring friends.

3. Your Best Deal is Exclusive. Let other sites offer run-of-site prices, even some special deals. But offer your best deals only on your own site. Motel 6 has gotten this Clue.

4. Know Where Your Customers Are. Understand the demographics of your target (Motel 6 customers are different from Four Seasons customers) and concentrate your ad budget there. That doesn't mean using intrinsic targeting (which costs too much). Work out run-of-site deals with those sites where your target lives, and push more ads on those sites that are most successful in bringing customers to you.

5. Two-way. Why don't airlines give out e-mail addresses to passengers so those passengers can pass along complaints? That's the only way you'll find out what improvements you need to make. Letting irate customers vent (and responding politely) also keeps irate customers from becoming ex-customers.

6. Measure everything. The key to success in travel lies in reducing the cost of bringing in customers. Measure your acquisition costs, measure your closing percentages. Keep your eye constantly on the bottom line.

I'll bet that after reading over this list you can come up with your own list. There are a lot of profitable travel sites out there--sites you can profit from by increasing their profitability.

That's where you want to be. Fish where the fish are.


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Dana Blankenhorn  (danablankenhorn@mindspring.com) is the author of the new book, The Blankenhorn Effect: How to Put Moore's Law to Work for You, available at Amazon.Com.

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