Michael Ros, co-founder and chief operating officer (COO) of Bidroom tells Web Summit audience that creating a loyal community of users in the membership economy is key to success.
“When your startup survives, it feels like you’ve made it,” said Michael Ros. “But if your startup develops a successful product or service, you soon reach a point where there are more customers than you can serve.”
Then it quickly becomes about turning customers into a growing community of subscribers who create predictable, recurring revenue streams.
Ros was giving his advice at a Web Summit presentation in Lisbon 5 November in a session entitled, “How to grow a startup with a disruptive, membership-based business model in the travel industry.”
He told the audience: “When you reach that tipping point you have to grow the company. And it’s not that simple.”
Bidroom started out on its journey to transform the online hotel booking sector in 2014. It now offers tens of thousands of online members what Ros describes as “unbeatable prices” at over 120,000 hotels worldwide. Because of its subscription model, Bidroom doesn’t charge hotels a commission, which sets it apart from competing giants such as booking.com, Expedia, Hotels.com, Ctrip, Agoda, and others.
Ros told the audience that Bidroom was an exemplar of the new membership or subscription economy that is redefining global businesses. Bidroom’s focus, he said, was on acquiring and retaining frequent traveler subscribers, monitoring usage and delivering unbeatable value that creates long-term loyalty and referrals.
“It’s about building loyal members who become a community of ambassadors for your brand,” he said.
Ros told the audience of CEOs, entrepreneurs, tech innovators and media, that since 2014 Bidroom had aspired to “zero friction” for its frequent traveler and hotelier members. For example, it takes seven minutes on average for hoteliers to sign up to Bidroom, compared to around 55 minutes on AirBnB or 120 minutes on major online room booking websites.
Partnerships are also integral to Bidroom’s philosophy. The company has signed deals with over 20 consumer-facing brands with large customer bases such as Visa, IHG and Avis. This brings the advantage of shared revenue, low acquisition costs, high levels of trust, and extended reach.
According to a 2019 specialist report in The Verdict, the global subscription economy is estimated to have grown by more than 100% a year for the past five years.
GoCardless estimates that 18% of all global payments in 2019 are now recurring, either by invoice, subscription or installment payments.
Zuora’s Subscription Economy Index shows that subscription businesses have grown income five to nine times faster than traditional businesses since 2013.
However, the community is currency too. “At Bidroom, we have never sought a mere transactional relationship with our customers. It has been about creating a relationship based on loyalty and affinity, where frequent travelers identify with Bidroom’s culture and brand.”
With offices in Amsterdam, Krakow, Istanbul, and Paris, Bidroom is on track to have over 100 employees by the end of 2019.
The 2019 Web Summit in Lisbon runs 4-7 November and is estimated to attract up to 70,000 attendees.
