The story of our snow bum company: inside labs
In 2016 my co-founders and I spun out our humble squad of 6 motivated snowbums from one of the largest integrated ski resorts in Europe to found a start-up. Together we set out on a journey to provide solutions for crafting meaningful customer relationships in tourism destinations, primarily ski resorts.
Why did we start the company?
When we came together to plan new digital initiatives with management for the resort of LAAX, three realizations dawned upon us time after time. Firstly, we, working at the Weisse Arena Gruppe in LAAX, did not have a strategy or tools to monetise the customer data available to us. Secondly, there was foreboding sense that new competition was about to emerge for ski resorts. In early 2015, Airbnb had successfully penetrated the hitherto previously slow and archaic market of vacation rentals in Europe. Booking com had firmly become a household name and was there to stay for years to come. And lastly, the general sense of the tourism sector being the slowest in successful digitalization had become a measured and researched reality (read “How digitally advanced is your industry?” on HBR.org).
235 km of slopes and 28 lifts
Approximately 1.1 Million visitors in 18/19
Combined revenue of approximately 100 M USD for the Weisse Arena Gruppe (WAG) the management company behind LAAX
So Reto Gurtner, CEO and President of the Board of the company behind LAAX, and I completed a lengthy evaluation round of established software vendors. None of the on-the-market software solutions fit our primary needs, spanning customer communications, loyalty marketing, data transparency, and pricing flexibility. Important wasn’t that it was an integrated tool or a single provider but that a solution offered a significant boost in terms of speed and immediate customer value. Salesforce was a powerful tool but at the end of the day only a CRM with a hefty price tag. An innovative start-up from Germany offered to provide an analytics suite that was interesting but it did not extend beyond data visualisation. A new ticketing system offered better and more versatile hardware but didn’t help tell a story to customers.
Inspired by the Silicon Valley “fail fast” and build “minimum viable products” mentality we began considering a different approach. At the time Nick Muldoon, an agile coach at Twitter who grew the company from a few hundred to thousands of employees, was visiting Laax. He pushed us to go for an alternative approach by building a dedicated squad to attack the problem. 8 weeks later I had hired a CTO and two software developers to start work into the unknown.
It really was the unknown that we dove into. At the time we had a loosely framed goal of creating a seamless customer experience and using data to power this. In fact, at the time we had an external app vendor about to launch their product and we also had a big website relaunch project underway — therefore our work was to really be focused on the backend-system and the data landscape.
How did things change from the initial goal?
Within the first months, we realised there was a plenitude of existing data to explore, visualise, interpret but not to act upon. Mainly, the data was poor because it was siloed; interesting in its own right but misleading as part of a whole. Some of it was also rubbish, especially when concerning customer profiles: multiple e-mails, wrong inputs, no past product information and deprecated API’s were the main sources of poor data in-flow. We took a hard look at the facts, especially how challenging it would be to match historic data with current and future customer action. We then evaluated the work we had been doing, and our partners had been doing, and decided to change course!
Our new goal became the creation of a holistic system that would close the loop between data and customers, thus yielding the ability to immediately measure customer responses. Firstly, we decided to create a new digital hub for customers to connect to us and us to them via an app. Secondly, we decided to limit our integrations to one major system for e-commerce, in this case, lift ticketing, and experiment with new approaches within this single slice of the problem. The logic was that if we tried new things we couldn’t get bogged down with the past and spend time trying to reinstate the status quo in our system. Thirdly, we agreed that trying things out and prioritizing with an absolute focus on customer benefits would be a guiding compass that we could use to plan our iterations.
Soon we realised that there was immense power in owning a complete and closed part of the (digital) customer experience. Going after the seamless part of our goal, now meant that we solve one problem after the other. In hindsight, it was almost problem solving by the Genchi Genbutsu method. We solved a lot of problems in this same manner over the next few years including:
- Differentiation through product unbundling powered by dynamic pricing
- Introducing new products, like, reserved parking spaces
- Launching a gamified non-monetary loyalty program
- Establishing one of the best customer service teams in the industry
- Providing an Uber-like experience for in resort mobility
When we were just about to hit Christmas time in our first winter season with the new INSIDE LAAX app, something happened. When we debuted the winter app, we included badges and awards that were earned by tracking your on-mountain day with your lift pass. Not a novel concept, but executed with a focus on easiness and playfulness in mind. Within weeks it had turned into the talk of the town. Who had earned which achievements was being discussed on the chair lift, at the apres ski bar and at the family dinner table. We had accidentally hit gold, by combining utility like webcams and ticket purchases, with purely hedonistic functionality like being able to compare your seasons progress with others. Having digital challenges baked into the skiing experience gave a reason to interact with the digital layer in a resort that was novel.
Where are we going now?
We are continuing to build our software platform for resorts to create better digital experiences and are about to deploy our 3rd major resort-wide solution. This past winter season almost 200’000 users used an inside labs app during their skiing experience in LAAX or Zermatt. Before the COVID crisis we were striving to hit 20 Million USD in turnover via our platforms. Our team now consists of 15 experts in various fields that span from software development to data analytics and creative campaign strategy to loyalty and pricing strategies.
In the future, we will stick by the same principles that have brought us this far. Our secret sauce to providing better digital experiences in resorts and crafting customer relationships is:
- provide accurate and realtime information to fulfill specific needs,
- guarantee easy access to experiences by providing digitally tailored products,
- make digital more than a utility by adding gamification,
- consistently communicate in a personalised manner using the maximum data available.