How test and learn drives Expedia’s innovation: An interview with Andy Washington, Managing Director, Expedia Northern Europe

During our recent Future of Travel event, it became clear that across the entire travel industry many brands are experiencing digital transformation, as they seek to address the challenge of competing on customer experience in order to remain competitive. As a market leader, Expedia has been quick to adapt to the digital revolution, understanding that their customers oscillate freely between channels on a whim, and so Expedia have embraced the value of a fail-fast approach. I caught up with Expedia’s Managing Director of Northern Europe, Andy Washington, to learn about their digital strategy, changes they see in travelers and discover what their interpretation of big data is.

Matt Robinson (MR): How do you see customer behavior changing for travelers?

Andy Washington (AW): In the US, less and less people in the 16-25 age group are learning to drive. The reason more millennials don’t have driving licences is because they don’t need to; they do everything online. They’re on their phones and are growing up in a world of technology that teaches them to expect technology to cut through clutter, save time and make everything easier.

That affects travel because it means travelers, especially millennials, now prefer autonomy and speed over processes. Flexibility is key. The typical millennial traveler modifies their itinerary 20% of the time compared to say 13% of the time in the 46-65 market. Some of them are cash rich, most are time-poor, and brands need to recognize that this customer is far more demanding.

This is not just a short-term shift in behavior; it is the behavior. Every customer issue has to be solved at a fast pace. As a brand, you need to be like a personal concierge.

MR: How important is technology in shaping the overall customer experience?

AW: Expedia sees itself as a technology company in the business of travel. Through technology, we make the travel experience easier, and our customers expect a seamless move from device to device. Scratchpad is one of our features that helps with that. We know that travelers search across multiple devices, noting down prices to find the best deal. Scratchpad acts like their personal travel assistant by logging searches regardless of what device you are on. Prices are also automatically updated, so there is no need to start your search all over again.

When we think about innovation at Expedia, we place a great emphasis on addressing the question ‘what are we solving for the customer?’. And we do it very much in a hypothesis and test world. We call it ‘Test and Learn’ internally. Our whole business lives and breathes by this methodology where data insights are at the heart of the organisation. We build our products in iterations in 120 day cycles, so after that 120 days, through our data insights we have a pretty good signal if we’re heading towards the right direction or need to change path.

We’ll get to the end goal with much better results because we will have learnt as we go, rather than making one big release. This strategy let’s us know how our customers will react, so we aren’t in a position where customers go “hmm, not sure, I don’t like this” – and then you spend another six months thinking about how to resolve it.

MR: How important is the role of data in fuelling the future customer experience?

AW: Data to us is a real driver of the business. We take a scientific approach of; ask a simple question, collect the observation, construct a hypothesis, test that out as quick as possible then analyze and repeat. So we’re back to our Test and Learn approach. It’s very scientific but it works. That approach drives huge amounts of insights for us.

In our Test and Learn environment back in 2011, we were doing about 200 tests on the site each year. We’re now pushing 3,000-4,000 tests each year. Of course things go wrong but we learn more from some of those tests that don’t work. It gives us enough data to fill 6.7 billion 200-page books.

People talk about big data, and how wonderful it all is, but it’s only great if you do something with that data. In order to action this, we have over 700 data scientists and analysts within the business to ensure that all that data is resourced for insight, not just for information. We prioritize smart data over big data.

At Expedia, data insight is crucial to fuelling real-time feedback. For instance, if you check into a hotel with Expedia and your itinerary is saved on your app, once you’ve checked in, you’ll get an alert on your phone and it’ll send you to a few screens; ‘how was your check-in process?’, ‘how was your room?’ for example, and you simply click on a smiley face or a sad face. This gives us customer experience insights with huge amounts of data, not just to work more effectively with our hotel partners, but also to fulfil the needs of the customers.

So if I said, I had a really good check-in experience but my room isn’t particularly good, that data comes to us straightway and then it goes directly to the hotel desk. That hotel desk can then solve that issue instantly. Now that makes a great customer experience. Imagine that, two minutes later someone knocks at your door and says, ‘I hear you’re not happy with your room, how can I help you?’. So marketing is not just going to be about acquisition – it’s going to be about retention. And retention is going to be hugely important.

To further explore how Andy and other senior travel execs see the future of customer experience evolving for travel brands, download our recent report or watch Andy’s presentation from our recent event.