Case Study: Driving Revenue and Innovation through Data at FlipKey

Background

FlipKey, an online rental platform (think AirBnB before AirBnB) later acquired by TripAdvisor, was focused on delivering great user experience and increasing revenue opportunities. With a forward-thinking mindset, the company aimed to refine its search functionality and introduce gamification elements to incentivize vacation rental owners to maintain high service standards.

Objectives

The primary objectives were:

1. Redesign the search algorithm to better predict customer value and drive increased revenue.

2. Integrate gamification features into the algorithm to reward vacation rental owners for behaviors that enhanced the overall ecosystem, such as maintaining up-to-date availability calendars and promptly responding to inquiries.

Deliverables

• Algorithm Redesign:

• Developed a predictive model that estimated potential customer value using historical data, ensuring that higher-value searches were prioritized.

• Re-architected the search algorithm to seamlessly integrate these predictions, aligning search outcomes with revenue opportunities.

• Gamification Integration:

• Embedded a gamification component into the algorithm to reward vacation rental owners who demonstrated proactive engagement—such as keeping calendars current and quickly responding to inquiries.

• Designed the system so that these positive behaviors not only boosted the owners’ visibility in search results but also contributed to an overall enhanced customer experience, driving further engagement and revenue.

• Testing Infrastructure:

• Designed and built a logging and A/B testing platform from scratch, allowing for continuous measurement of the algorithm’s performance and rapid iteration based on real user data.

• Enabled the product team to conduct over 20 tests in the first six months, iteratively refining both the predictive and gamification components.

Outcomes

• Revenue Impact:

• The revamped search algorithm achieved a 6% improvement in overall revenue, with the predictive model’s estimated customer value matching actual results within 1%.

• Enhanced Ecosystem Engagement:

• The gamification elements successfully incentivized vacation rental owners to maintain high standards, resulting in improved search rankings and a more engaging user experience.

• Continuous Innovation:

• The A/B testing platform fostered a culture of continuous improvement, allowing FlipKey to iteratively enhance product features and solidify its position as a data-driven, innovative leader in the vacation rental market.