BottomUp - Skills for Innovators

Discover how Airbnb uses design thinking to create trust with customers.

Show Notes

Hello, and welcome to the bottom up podcast. I might pass ins I'm the chief executive officer at quality sense, and we are into the second, the second part of our deep dive into design thinking. And as you will have worked out from the first episode, I'm rather keen on design thinking. It really is a powerful problem solving too, that puts users at the very center, uh, uses as the primary source of inspiration validation of how to build a great product, a great service, perhaps even a great company and talking about companies.

Uh, today we're going to look at a case study, a company that uses design thinking in many different ways and. We will study, eh, B N B. So what we're going to actually do in this episode is we're going to look at how they use design thinking with customers, uh, on the outside and in the following episode, it's again, we're going to double down on Airbnb.

We're gonna look at how Airbnb uses design thinking with employees on the inside. And I cannot tell you that there are a few companies that have put. Design at the heart of their business, like Airbnb. So we have got a lot to learn. So let's set the context before we look at how they've used design thinking to be so successful.

Now, when we talk about this success of Airbnb, The real context here is that the value that they've created when you think about this scale and their impact on travel, hospitality and accommodation, what they have done has been achieved in just a little over 10 years. Hilton who are a little bit similar in terms of size and value creation have been in business for over a hundred years.

So when you, when you actually start to unpack how much. Success Airbnb has had how much they have grown and compare it to traditional, uh, travel accommodation hotel companies. This is when you appreciate, they have not only grown bigger than them, but they've also done it in a 10th of the time, which is really it's exponential.

It's, um, it's ridiculous growth. And to put that growth into perspective and to understand the scale of their business. They have well over 6 million listings on Airbnb and you can find them in over 191 countries. If you wanted to get that many listings, you would need to grab at least the top five hotel companies in the world and combine them to have a comparative number of accommodation listings.

That is how powerful the Airbnb story is now. Yes. I know what you're thinking in a work from home quarantine post COVID world. Maybe they're not as big. That's true, but also you could say that for their category, but we all know that they have catapulted into popular culture into the way we travel, the way we experienced cities.

And that's why it's such a powerful case study because design is really at the heart of it. So. The primary approach, um, has been through, uh, design thinking to build their customer experience. And what's really interesting is they famously and very openly talk about how they, they kind of struggled at the start a little bit, but it was through deploying design thinking, getting to understand their customers, that they actually had their breakthroughs.

Now, Joe Gambia, who's the chief product officer. He talks about designing for trust. Now, if you think about this paradigm, this is the greatest challenge that they face as a business because they don't own any homes. They don't own any hotels. They don't own any airlines. So what they have is an experience either in a browser or in an app.

And there's not a lot to grab onto there. It's not like you see the hotel, Airbnb hotels, um, as you walk down main street or high street. So trust is everything, uh, for Airbnb. Actually Joe has famously talked about how designing for trust is really at the core of how they have built the customer experience.

Now, big part of trust is, you know, the feedback and the reviews that we give of the places we stay. Um, Um, the Airbnb, uh, experience. Alternatively, if you're a host, it's the reviews and the ratings of the guests. I mean, this is a key trust building factor. I mean, just, can you imagine buying something on Amazon without having a quick look at the reviews or if it's something a bit more significant, you might really study, uh, Reviews across different sites before making your purchase.

It's exactly the same with Airbnb. So what's really interesting is through understanding that trust was everything. Airbnb then went deep and said, okay, how do we make reviews even better? How do we create impartiality in customer feedback? So what they've actually done is created a quarantine system for reviews, and here's what that means hosts and their guests will only see reviews.

That they've received from a trip after both participants have written their review. So this helps them avoid somebody seeing before they've written their review of a host. If the host writes a very negative review, the guest might turn around and just write a negative one and get into sort of some sort of tit for tat.

So by creating this quarantine, they've improved the feedback by making it impartial so we can trust in the reviews. Now I want to stick on reviews for a bit, because this is actually very, very essential to the trust building, uh, activity and designing for trust and using design thinking is. Really at the center of understanding how Airbnb did it.

Um, so Airbnb did a study and they found that when we go to a listing and we're looking at a listing of a place of accommodation in this service, and they did this study with Stanford. So, you know, there's some pretty serious thinking going on here. They wanted to understand that when we're looking at that listing, what's our bias.

What are the things that. Prevent us from booking and what's the role of reputation. And what they found is that if you had 10 or more reviews of your accommodation, you were 10 times more likely to rent out via Airbnb. If you only had a couple of reviews, hardly anybody would book it. So there's sort of this magic threshold that they've discovered 10 or more reviews is what it's about.

That's why they improved the way we give ratings and reviews so that they're better quality. They want to stimulate more volume, but then here's the interesting thing. They've done a number of other things that really improve the experience. Not only encouraging us. To book more, but also to review more, let's have a look at some of the things that they did based on understanding what designing for trust was really going to take.

When they first launched the service, they would have really dodgy Handycam snaps, um, maybe, you know, poorly staged, poorly lit, uh, photos of the accommodation had taken on a phone. So, what did they do? They ran an experiment where they would have a ton of listings, some had professional and some had regular amateur photography, and the results were astounding listings with professional photographs are booked more than two and a half times more.

Than homes without professional photos. So photos displaying the very best version of a property. Well stage well lit. Using those nice wide angle lenses encourage people to book by a factor of two and a half times more. This is a dramatic change in the user experience. It was a great piece of design thinking.

And actually it's led, you will find many of the books and articles celebrating the. The life of Airbnb will actually point to the moment that they did this. This was a serious breakthrough for the business. And since then they've done a number of other really cool things around, um, designing the experience, building an experience that really starts and ends with trust.

One of those, uh, that they also did was they really designed more trust into the host. So you might see the property, but actually who's the host can, are they reliable? Can I trust them. So they created this idea of a super host. So you got a cool little badge on your, on your icon. And what's really interesting about that is they, uh, essentially, uh, creating a tiered system where they can guarantee the experience, guarantee them being more trustworthy if they're a Superhost.

So that's really powerful. Couple of other quick ones on what Airbnb does to build trust. As you can expect, we, uh, look at a listing and we get lots and lots of reviews. So let's say, uh, we're considering a holiday house and it's got 80 reviews. That's obviously a central part of how you can design for trust, but this is where they take it to the next level.

And this design thinking mechanic that they use is called social proof. And what they actually do is when you look at the options that you have with a property, and you're just surfing around having a look. You're not a hundred percent sure what exactly what you want to do you seeing what's on offer?

Um, what they do is they have a wishlist option, but just below that, they tell you that in this case 728 travelers have also saved this place. So what it does, it gives you a second data point to build trust. Not only do you see the reviews in the five stars, but you also see that a huge number of people are also.

Considering this property, this listing. And so this really, this idea of social proof is a validation. So it's giving you three different, uh, proof points to build trust, to help you make a better decision on where to stay. And just lastly, one of our real big challenges when we're in that consideration process of a property is let's say you have a specific question.

Does it have a washing machine or, um, Is it baby friendly or do they have sheets? Whatever the question. Sometimes these questions are the difference between a booking and not getting a booking. So what, uh, Airbnb has done is they've really designed the presentation of the host to build as much trouble, much not trouble as much trust as humanly possible, so they can overcome any sort of lost, lingering social biases or, you know, questions in our mind.

And here's, what's really, really smart. Uh, what they discovered is that the biggest problem we all have when we contact a website is we never get a response. Uh, it's the classical emailing to and you'll never hear from them again. Well, what Airbnb does is they do the opposite.

They actually show you for the individual host their response rate and. The response time. So you might see there are 95% or a hundred percent response rate, and they might actually suggest to you that you're likely to get an answer within the hour. Now that might be just enough for you to reach out to your host and ask the big question.

Okay. So there it is designing for trust. We can learn so much from Airbnb. If you're really interested in going into this further. Jump on to bottom Where are you going to find our mass class on design thinking? Which includes a ton of study of Airbnb and how they use design thinking both inside and out.

I hope you've enjoyed the show. Stay tuned because in the next show, we'll be looking at how Airbnb designs, the experience for employees. Thanks a lot.

What is BottomUp - Skills for Innovators?

The volatile, uncertain, complex, and ambiguous world we now live in makes it impossible to innovate from the top down. We must now take an empathic, experimental, and emergent approach to innovate from the BottomUp.

Mike Parsons breaks down all the components of what it takes to discover, build, test, and launch radical new products, services, and cultures. You'll get in-depth instruction on the most effective methodologies, interviews with experts, and case studies. All in under 15 minutes.