A new hope for rental pricing management: a flexible pricing system informed by user research

Todor Bozhinov
Jan 23 · Unlisted

What problem did we solve?

We empathized with private homeowners’ biggest woes to design a state-of-the-art rental pricing system. We drew learnings from qualitative user research and two phases of user testing with real customers to radically improve the experience in the users’ chief back-office problem areas. We balanced conflicting requirements, technical challenges and dependencies to bring a functional MVP to early-adopter homeowners and all new sign-ups.

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Who did we solve it for?

Private homeowners (or hosts) are vacation portal Traum-Ferienwohnungen’s most important customer and user group. They’re an integral part of the guest-host equation and on this portal, they pay a yearly fee to advertise their vacation home. With this, they get access to a back-office which features booking and price management capabilities.

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Kurt Klain, our persona for private homeowners

Hosts are typically baby boomers in their 50s and 60s and they reside in Germany or countries popular with German tourists (Spain, Italy, France, Netherlands, etc.). They own and rent out from one to ten vacation homes — whether to keep a house they inherited in active use (for emotional reasons) or as a main source of income (financial motivation). The broadly-defined persona “Kurt” was often used to refer to private homeowners with these characteristics.

What was the situation before?

Rental prices are a topic riddled with complexity and diversity. Some hosts offer their vacation homes at the same nightly rate for the entire year, others have seasons with vastly differing prices per night. Some offer group discounts, other charge you more if you stay shorter than three days. Some only let you check-in on Saturday and stay a week, no more, no less… the possibilities and regional specifics are almost endless. 🤯

What’s more, making sure your own rental pricing logic is correctly represented on a set of different vacation rental portals can be a nightmare experience for homeowners. In the case of the portal Traum-Ferienwohnungen, the ancient pricing interface was gathering dust for a decade: a dreary spreadsheet with multiple columns, impossible to read and hard to navigate on mobile.

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The old price list was the interface equivalent of a prefabricated neighbourhood at the outskirts of an Eastern European capital city 🤐

More importantly, it wasn’t giving the hosts enough flexibility to properly indicate their prices. Many listings on the portal were displaying “price on request” or had a slightly wrong price listed. This was forcing homeowners to send chat messages or e-mails to potential guests with their correct price for the desired booking period. And nobody wants to find out they originally got a wrong price for their vacation rental… a frustrating situation on both ends.

It is no wonder that in a customer satisfaction survey, 17% of homeowners listed rental price input as their biggest source of frustration in the listing creation/editing process. With this number, rental prices the biggest hurdle in the process (followed by photo upload with 10%).

How did we approach it?

The project to design a new rental pricing system for private homeowners was kickstarted by a company initiative to channel listing data to other portals, giving Traum-Ferienwohnungen customers the option for more exposure for their listings.

I collaborated on this year-long project with multiple product owners and a team of front-end and back-end developers. The process began with a discovery phase, gathering quantitative user research data from customer support feedback and user interviews. Mockups and then high-fidelity prototypes were iterated upon in a very agile ideation phase with weekly stakeholder feedback, while the foundations for the complex back-end implementation were being developed in parallel.

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Full overview of the new pricing system (design finishing touches not live yet)

I conducted ten remote user tests with early versions of the system during the early development phase. The feedback was protocolled, prioritised and partially implemented. A switch-over user flow was designed to onboard existing customers to the new system, which would override their old price settings.

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Conducting remote user tests and interviews with real homeowners from Germany, Switzerland and France was an eye-opening experience during the design process

Based on user feedback, competitor analysis and best practices, the new pricing system did away with the awkward table format. We replaced it with a card overview of the most important base price and season data at a glance. To edit the inner workings of a season, the homeowner would access an individual season screen.

A “base price” and a “standard capacity” were introduced as new concepts, giving hosts both stability (they’ll always have a price) and flexibility in rental price input. Holiday seasons were streamlined and a price simulator feature was created, so that homeowners can test their settings with real-world prices.

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The powerful price simulator feature lets hosts check the validity of their price settings by simulating a real scenario with genuine guest data (travel dates, number of guests)

Four highly customizable discounts (long stay and group discount) and surcharges (short stay and weekend surcharge) were made available both for the base price and seasons.

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The interplay of four discount and surcharge types enables significant customization

We also introduced smart defaults, minimizing the cognitive load for hosts while they’re entering their price data. We drew conclusions from quantitative user data to set the most common minimum stay and the most common discount and surcharge values as the default. This way, a big minority of homeowners would not need to edit the suggested values at all, but only confirm that the settings are perfect (just the way they are 😍).

And furthermore, a newly-created season would adopt all settings from the base price — our hosts would only have to change the values that are different for this particular season. No need to re-enter the season’s entire pricing data in case you wouldn’t like it deviate from the base price settings.

The new pricing system is gradually being rolled out since December 2019, beginning with a small percent of the existing customer base as well as all new sign-ups. Hosts can take a peek and demo the new system. Once they are satisfied with their price settings, they can commit to switching over, but until then they’re free to explore and play around.

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Base price and seasons overview (live beta version before design finishing touches)

What UX improvements did we launch?

  • An obligatory base price ensures no more frustrating “prices on enquiry” for guests
  • Standard capacity setting complete with prices for additional adults and children
  • Four types of highly customizable discounts and surcharges (long stay and group discount, short stay and weekend surcharge)
  • Streamlined interface with a clean overview of seasonal and base price settings
  • Price simulator enabling hosts to check their price settings with real-world data
  • Smart defaults for common input values
  • Smooth and liberal switch-over flow
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A teaser at the top of the overview page lets the host know they can switch over if they’re satisfied with their price settings. Until then, homeowners can explore the new system at ease.

In conclusion

The large-scale rollout is ongoing, but based on feedback from the user tests and customer support input, the new rental pricing system is a great relief and a welcome improvement for Traum-Ferienwohnungen hosts. Thanks to the added flexibility provided by the standard capacity (together with prices for additional adults and children) and the powerful discounts and surcharges function, more homeowners are able to correctly indicate their rental prices. And the much cleaner and neatly arranged overview is a life-saver for hosts in their busy schedule.

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