Following the summer blogging hiatus, this blog is having a bit of a change of direction, namely towards entrepreneurship. I will be kicking this off with a five part series about a number of awesome enterprises, what makes them tick and how they keep the money rolling in.
This week I will be investigating Bookme, a New Zealand Registered Company. As a student who really cannot turn down a deal, I’m a big fan of Bookme, and love sharing the deals around to anyone who will listen.
So who are Bookme?
In their own words, they’re an “innovative booking site for activities, tours and attractions.” They are based in New Zealand, but also operate in Australia and Fiji. Basically, instead of buying a voucher to use at any time, like GroupOn or Living Social, Bookme customers can book and pay for an activity for a specific time slot, with some time slots heavily discounted.
There are a lot of sites around that offer either online booking, or deals, but Bookme has done something a bit clever. They have combined the two to make a fantastic tool which benefits both tourism operators and customers. Both of these parties are important, because even though customers are actually paying the money, keeping the vendors happy is important.
This is because Bookme’s business model is commission based. For every booking made through the site, they take a percentage cut. This model is not ground breaking in itself, but it is what they do with it, which makes them so for both vendors and customers.
For us, as members of the public, we are not only able to book a time online, but we get deals in the process (sometimes pretty spectacular ones!). Think $1 Jet boating trips, or 50% off scenic helicopter rides. What’s more, to help us work out where to spend our hard earned cash, Bookme offers authenticated reviews. Only legitimate Bookme customers can review attractions, meaning no more dodgy employee reviews inflating ratings, only quality ratings that are actually reliable. Together, these features keep us coming back, and on the lookout for the next good deal!
For the tour operator, it is even better. They get to pick when they offer their deals. They no longer risk scaring off their valuable paying customers at peak times, with hordes of GroupOn voucher fanatics.
Instead the tour operators might have larger discounts early in the morning, when the late risers mean the surf school is empty, or put up a last minute deal to fill those last two sky diving spots at 12pm.
By reeling potential customers in with deals, Bookme is also able to secure full price bookings, which is fantastic for tour operators. In fact co-founder Alder says some clients are making up to 95% of sales through Bookme at full price. That’s pretty impressive for a deals site!
Also, Bookme is not trying to make their money in a one day frenzy like GroupOn, instead having long-term listings. This allows them to set their commission rate at a more sustainable level than the 20 to 30% usually demanded by daily deal sites, giving them a competitive edge. This keeps vendors happy, and continuing to run quality listings through Bookme. And the happier and richer the vendors are, the happier and richer Bookme is.
There are however, a few stumbling blocks with their business model.
The site was set up on a shoestring budget. Which means there is very little stopping anyone else on a shoestring budget from attempting the same. Technically speaking, this is called a “low barrier to entry“. Bookme has no concrete assets, like factories or patents, and are not directly offering any products or services, they are simply a gateway. It is their reputation and the name they have built amongst tour operators and customers which keeps them afloat. This means they need to stay on top of trends and ahead in the fast paced environment we see today.
Bookme is also at the mercy of the vendors. If vendors decide Bookme is not for them or they will earn more money through other channels, there is very little Bookme can do. For example, I am a regular at Muriwai Horse Treks. Back in the day they always had deals on Bookme. But now? I have to scour the calendar to even find a day I could book through Bookme. It is peak season, with plenty of full paying customers, so why would Muriwai Horse Treks pay Bookme’s commission at all? They do not actually need the extra business.
Despite these disadvantages of Bookme’s business model, it is important to remember that all business models have flaws, and it is about ensuring these are balanced with strengths. I for one, am glad that Bookme seems to have succeeded at this, as it means great deals! Their growing business also highlights the value they offer to both customers and tourism operators, with their unique approach to booking and deals clearly a winning formula.