2008-04-30

Chris Anderson’s Free & the Booking Engine

I’ve been a huge fan for Chris Anderson for a long time. It seemed to me that the “Long Tail” completely supported my own motivation behind building Rezgo, a web based booking engine that would put inventory and distribution control into the hands of the individual supplier. Now with his latest article in Wired magazine and his upcoming book, I am again inspired by his words. In his article titled “Free! Why $0.00 Is the Future of Business“, Chris explains that because of the decreasing costs of hardware and bandwidth, it is possible to monetize digital businesses differently then real-world businesses. In essence, it is quite possible to offer a digital product for free and monetize it in some other way, either through advertising or through premium features.

With the approach of Rezgo’s first birthday, we looked at it’s first year and analyzed some of the challenges we faced with marketing the product. What we discovered was that we were in a very good position to offer the service for free and monetize the system through distribution of supplier product. We sat down and analyzed how we could make this happen and in very short order found a way to do it. The ONE thing that Chris wrote that really struck me is:

“From the consumer’s perspective, though, there is a huge difference between cheap and free. Give a product away and it can go viral. Charge a single cent for it and you’re in an entirely different business, one of clawing and scratching for every customer. The psychology of “free” is powerful indeed, as any marketer will tell you.”

Although we were able to attract over 500+ suppliers to Rezgo, our conversion to paid subscriptions of the system were low. We wondered why this was the case and eventually came to the conclusion that the perceived value of the system to the supplier was different then our perception of what the true value of the system really is. We realized that we haven’t just created an application, we are changing the way in which these tour and activity companies are doing business. We then realized that there is no precedence for what we were attempting to do and that any price attached to the service would really be arbitrary.

Now that we have opened the door to the system we are hoping that more suppliers will use the system and spread the word. I know that no amount of marketing will have the same effect as word of mouth in the travel & tourism industry. Will the offering be attractive enough to result in a storm of sign-ups? Will Rezgo become the defacto tool of choice for small and medium sized tour and activity providers Worldwide? I am hoping that 2008 will show the answer to both of these questions to be “Yes”.

If you are a tour and activity provider or you know of one, please help spread the word that Rezgo is FREE!

This post was originally posted by Stephen Joyce @ Travel & Tourism Technology Trends.
> Read the original post here