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The average business traveler booking through Rocketmiles – a new hotel booking site geared toward people who want to stockpile miles for dream vacations – will earn 80,000 airline miles per year, according to co-founder and COO Bjorn Larsen.
Rocketmiles launched in March and Larsen is very excited about the program’s reception.
“It’s been incredible and successful from a business perspective,” Larsen told Loyalty 360. “We’ve enabled people to take more vacations, and its’ generated revenue we’re proud of. People are going pretty nuts about. We’re pretty excited. We had an idea and thought it would stick.”
For Larsen, a native of Norway, Rocketmiles marks his fourth startup business – his first coming at the age of 13.
“I’ve been really lucky and worked at a travel agency and learned about travel,” Larsen explained. “I learned how people behave and what they’ll do to get rewards.”
Larsen’s co-founder and partner, Jay Hoffman, previously ran the United Airlines Mileage Plus program and the pair met when they both used to work at Groupon.
“He (Hoffman) is a great guy,” Larsen said. “I had startup experience and he had loyalty experience from the airline side. We raised some money ($2 million) and launched in March.”
Larsen refers to Rocketmiles as more of a “curated” type of business.
“Our average booking earns 7,000 airline miles,” he said. “We’ll get you a hotel in New York City where you can earn 20,000 United Miles for a four-night stay. We negotiate special rates, much lower than the hotel rates. We’re the principal in this transaction. We can get a $200 room for $120. We take that $80 and might keep $20 of it and go out and buy miles with the other $60. The hotels love our audience because they are typically business travelers who spend money at their hotels.”
In addition to receiving the bonus miles, Rocketmiles customers stay at desirable premium hotels across the country and pay the same rates as found on other hotel booking sites. The average hotel rate paid per night by Rocketmiles customers was $195, and the most popular cities booked were New York, San Francisco, Chicago, Atlanta, and Los Angeles.
Larsen said about 82% of its hotel bookings are made by business travelers, and the company’s top customer is on pace to earn an extra 300,000 miles in the upcoming year – enough to pay for a trip around the world.
“We do all the customer service and we have premium customer service,” Larsen said. “It’s premium in that you speak to someone who has the whole picture on their screen.”
Larsen said hotels are attracted to Rocketmiles because it’s not the same as a person buying a hotel room at a premium hotel on Hotwire or Priceline.
“Selling it through Hotwire or Priceline channels, the problem there is people who stay at 3-star hotels would now be going to 4- or 5-star hotels, but they don’t spend the same amount of money as the independent business traveler,” Larsen said.
What has surprised Larsen the most?
“That it wasn’t as hard as I thought to get lower rate buckets,” he said. “It’s a more organized world than I thought. The hotel world is very organized and we were able to tap into that world with a new concept. We want people to be able to take that better vacation, like celebrating Mardi Gras in Rio de Janeiro instead of in New Orleans.”
Loyalty, for Larsen and Rocketmiles, is a two-sided concept.
“We have a product and when people start using it they get addicted,” he explained. “We have an incredibly easy checkout, easy website to navigate, and a premium customer experience. We’re not very promotional. When it comes to large loyalty programs, they’ve become such large money-makers that there’s so much fine print and that’s the clutter we’re trying to cut through.”
Larsen said people are sick of being taken advantage of, and the “power given to you by having a loyal customer base requires you to treat them well. We have an incredible lifetime value and they have a superb customer experience.”
Less than three months into a new business venture, Larsen revealed that 30% of Rocketmiles customers have since made a second booking – citing a recent reservation for 58 consecutive nights at a hotel.
“We’re investing in the lifetime value of a customer,” Larsen said. “Acquiring customers is pretty expensive and we bet on the fact they’ll have a sticky enough experience to return to us.”
The biggest challenge, Larsen said, is to have a good product and a great customer experience.
“Our image isn’t to give you three exclamation points after a message,” Larsen said. “The No. 1 way for us to acquire customers is through our partners – the airlines, who have large databases of customers. We want to be everywhere we think our audience is. Loyalty is about creating a two-way trusting relationship. If you’re able to build up that trust, that becomes so valuable and one day has a life of its own.”
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