Andy McNulty, co-founder of Touch Stay, is in the business of making guests happy. Guest experience is at the core of his business and is a key issue in the short-term rental industry. Here we talk about how he is growing a tech company for the future whilst retaining the vital human touch to keep guests satisfied. – Editor
PTM – Touch Stay has been built on the firm foundation that guest experience is everything. In your view, what are we as an industry really referring to when we talk about ‘guest experience’?
A.M – This is a big question. If we think about it in simple terms, it’s really about how each guest feels relative to their expectations. And that runs throughout the stay cycle, from initial research to post-stay. So, rather than a sweeping concept, think of it as lots of tangible micro moments.
This can be challenging because you can’t always control every micro moment. Layer in that every guest is different, and it’s a hard task to ensure a positive guest experience at every moment.
An algorithm or some kind of AI tool that can identify the weak spots in your guest experience process might be a useful development for property managers.
The challenge with any complex scenario is to take the time to simplify it, and then make it something you can act on.
If you’re familiar with Gary Chapman’s 5 Love Languages then you’ll understand that every human being has a different love language preference. Before you scoff, this isn’t some airy fairy concept, it’s quite logical and actionable and will force you to think about how your many and varied guests will react to what you believe is an excellent guest experience.
If you build a table/spreadsheet and mark out the guest journey along one side, from pre-booking to post-booking, and the love language of each guest across the top. The goal is to have a smiley face in each box in the table, or at least more smiley faces than pouting faces, giving you a net positive guest experience.
For example, some guests place no value on receiving gifts. They may not appreciate the bottle of wine you left. But they did love the cleanliness of the apartment. This guest is likely someone who appreciates “Acts of Service” rather than one who enjoys “Receiving gifts”. But you catered to them both by leaving the bottle of wine and ensuring rigorous cleaning standards.
We have a deeper explanation of each love language definition (as it relates to our industry) in this article on the Touch Stay blog. You can use it to understand how you might positively influence your guest experience.
Ask yourself or your business, if you were to complete the grid honestly, would you have more happy faces than pouting faces?
This is a large subject worthy of a separate article so I’ll leave it there. Suffice to say, guest experience isn’t a loose concept but a collection of micro moments in the entire stay cycle.
PTM – As a tech company with a very human side – how do you ensure your customers are able to balance offering their customers a ‘high tech, high touch’ experience?
A.M – Yes, we definitely strive to show a human side. Despite being a software service, we ultimately hope our customers feel like we’re human beings. After all, although we’re a technology solution, behind every feature and process is a group of humans that designed and developed them.
As for how we ensure our customers are able to balance high tech with high touch, I see us as a cog in the overall goal of using technology to become more human at scale, not less. In short, being “efficiently human”.
Take the post-booking process. There’s nothing human about an auto email from a PMS confirming the reservations and terms. But there is something very human if that auto email has some personality. It doesn’t have to be overly familiar in tone, it just has to be a templated message that matches your brand voice. In this sense, a tech-enabled process (booking confirmation) can be efficiently human. Yes it’s automated (and guests know this), but it’s clearly had human input.
I see Touch Stay in the same way. It’s a moment to show your guests that you (as a human) have invested in them. Technology is just the medium. Whether that’s recommending places which a guest wouldn’t ordinarily find on a Google search, or including a video on how to operate the lock box, or simply a photo with an arrow pointing to the side gate entrance, technology is enabling a more efficient way to be human at scale.
And the ROI for owners and managers? A more positive overall guest experience that influences review scores, but also a reduction in the number of calls or emails received from guests. It can be self-serving too!
PTM – Guide books come in all shapes and sizes. Right from the start, you opted to design and develop a web-based app. How did you come to that decision, and with hindsight, has it been a good decision?
A.M – We took a lot of advice back in 2014 before deciding to run with a web app. We had two objectives:
- Make it easy for the guest to access
- Make it easy for us to release technical updates
It was a pretty simple decision to go web based with those objectives in mind. Tablets and native apps insert a barrier to guest access which was a major negative for us. And technical updates are faster for us since we don’t have hardware or an app ecosystem to support.
I should add that today we are a Progressive Web App, combining the best of both web apps and native apps in one solution.
Offering guests the ability to add the app to their phone in an instant, and then read it offline, is a huge step forward in guest experience.
Whilst we’ve definitely had technical challenges and bumps along the way, starting out as a web app and transitioning to a PWA was absolutely the right decision.
PTM – Like many SaaS solutions in the short-term rental industry, you operate a subscription model – what are the pros and cons of this as a business model. Is there anything you would change if you were starting again today?
A.M – The subscription model was really the only viable option. The simplicity of a monthly or annual recurring fee to use our software was obvious. Simple for us to implement and simple for our customers to understand.
The alternative at the outset was some kind of design and build service, creating bespoke apps that customers then manage themselves. But that’s riddled with complexity and ignores the fact that the vast majority of our industry are owners and small property managers. Putting a large 5-figure price on a proprietary bespoke solution didn’t make any sense.
I think the more likely alternatives are who pays and in what form. For example, rather than charge owners and managers, we could have looked at some kind of guest monetisation, whether through guest in-app purchases, or through adverts. We could also have opted to charge owners and managers based on guest usage, e.g. if you have 10 bookings a year versus 10,000.
In the end, every alternative had a level of complexity that wasn’t necessary as a start-up business. The pure simplicity of a fixed monthly or annual recurring fee just made sense.
Simplicity does, of course, have downsides. A flexible subscription model allows customers to cancel the service very easily, so called “churn”. Fortunately we’ve found churn rates relatively low, but it can be a curse to some businesses trying to build a sustainable month-to-month subscription model.
PTM – As one of the first things a guest sees, post-booking, is the Touch Stay app. How important has getting the aesthetic design right been? How do you balance functionality with an attractive interface?
A.M – This is a constant tension for our business. Ultimately the goal is for function and design to act as one. It’s useless having something pretty that doesn’t work well. The reverse is also true that function without aesthetic loses an emotional connection.
Think Android vs iPhone a few years ago. Whilst Android phones undoubtedly had superior function/tech, the iPhone just looked much more beautiful!
How do we balance function and aesthetic? Simply by being aware that one fails without the other. We also have quite a diverse team, mixing nationalities, gender and skillset, all with quite curious minds. The result usually means lots of ideas and perspectives at the outset, which we form a consensus around, ultimately resulting in a product that has balance too.
We have an added complexity because we have two user types: our customers (who interact with our dashboard) and their customers/guests (who interact with the guest view). We focused heavily on the guest view during 2019, releasing both a new design but also a lot of new functional features. During 2020 we are putting that same effort into our dashboard view so that our customers have a more modern and intuitive interface.
PTM – Your route to funding has been unusual in today’s climate of big VC or PE funding announcements. In fact, many of your customers are your investors. Can you share a little bit about your funding story and why you chose that route?
A.M – We went through the Virgin Startup Accelerator in late 2018, with the goal of raising capital via a crowdfund. For a number of reasons we decided that crowdfunding wasn’t right for us.
The alternative at that stage was to seek angel or venture capital, or continue financing the business ourselves. Despite having experience of raising capital (I was interim CEO at Victoria Beckham’s fashion business when we raised £30m of PE money), we felt a more obvious path was to offer the opportunity to our own customers. After all, they understand the product, the industry and the potential.
We have an external lead investor, but the majority of our investor base are customers. It’s not just that they are customers, but that they each bring a different perspective. And, in a few cases, open doors for us. That kind of financing approach at an early stage is vital, in my opinion. To be able to drop a line to one of them who has experience in x is invaluable.
This approach doesn’t rule out a larger capital raise from a VC. Quite the opposite, it’s allowed us to scale up faster, prove our model and position us for the next stage.