Your leads are not one click away from booking your space. You must filter them first and then chase them!
It took me some time running Startup Embassy to understand that what I had thought was a booking process was, in fact, a sale process. The first challenge you will face when opening your coliving, will, of course, be filling it up with the right people.
You will immediately think about which channels to promote your business on, and you might make the mistake of thinking that listing your space on Airbnb, Booking.com, or other OTAs is a great idea.
An Ideal Coliving Situation
The problem with these sites is that there’s no way to do specific niche targeting. Even worse, they assume that once the potential guest (a lead) chooses your space, you will accept them right away. They’re only one click away from booking your space.
Well, that’s wrong. I’m assuming that your coliving is verticalized and targeting a specific tribe. If you are not, I wrote a post on why you should verticalize it here.
In an ideal situation, your potential colivers will need to be educated in advance on what your brand is about and your expectations.
Those high-quality leads would apply directly to your website and go through the selection process. You would accept almost all of them because they fit your perfect profile, and you would only reject based on unavailability due to lack of space or because you have set a quota to keep a balanced community. That is, if life was perfect, but it’s not.
OTAs and Their Expectations
When you start operating, you will not be in this ideal situation, but whatever you do, you must design a plan that gets you into one. This means that you will need the support of OTAs such as Airbnb and others, and for some time, it will be normal to have a lot of noise in your inquiries. However, you must not forget that it should be a temporary strategy until your business is up and walking. If, after some time, you rely on them too much, you are doing it wrong.
So, since we both live in reality and now Ideal-Land, you will receive many requests via OTAs that must be filtered. These requests will be from various people, all with different needs and expectations.
Most of them just want to book an affordable place. Maybe they chose you because your location was convenient.
The potential guest makes a request and expects you to accept his inquiry when they book on these platforms. This is where you have a problem. It’s at this stage when you should stop the candidate and say, “Wait, who are you, and why should I accept you into my space?”
But isn’t this counterintuitive?
Why on Earth stop a lead on the cusp of sealing the deal? You got a sale! Why add a layer of complexity when you hold the lead up by asking questions? Won’t you lose money?
Yes, you will. And this is why I reiterate that you don’t have a booking process in coliving, you have a sales process.
Sales Processes—The Right and Wrong Way to Book
You want the best people, the ones that fit your culture, right? It’s a coliving, not shared housing or a hotel. Therefore, you must filter them, and as they come uneducated to your culture through those shitty channels, you would be forced to awkwardly question them while they expect a done deal.
Some will be confused by this; others simply pissed. Once you have validated the potential coliver, another problem arises; now, they have to re-submit their booking request.
The time it requires you to ensure they’re a good fit might make them consider other spaces—they could just be in a rush or be shopping around. Either way, any block in a sales process is bad.
In my case, I designed a booking process for Startup Embassy that differentiates inquiries based on which site they use.
Either they come via our brand’s website or via an OTA (in our case, just AirBnB but all the others would be treated equally). If the request comes via our site, I assume they are more educated on our culture, as they did the exercise of finding us and hopefully read our FAQ section.
Our “apply” form asks enough questions for both parties to assess a good culture fit. All the content we generate is to show our values and has the intention to educate potential colivers with the reality they’ll get joining our community.
If the request comes from an OTA, like Airbnb, I assume they don’t know about us (or else they would have applied via our site), which means I need to make an extra effort in the selection process. In this case, I also assume that they didn’t even read the description on our listing.
One Easy Way to Filter Out Crazy
Our booking process has different templates for each stage. We have training material for our House Manager to learn what steps should be taken, when to change stages, and which templates to use depending on each situation.
I will share these templates and the booking process chart flow in a future post, but they are not that complicated. It’s about identifying each stage, being polite, and using each interaction to educate the candidate further.
All this back and forth messaging also brings a sense of exclusivity which basically asks, “are you part of our tribe?”
After many years, I have concluded that people who get annoyed by this process are not the right fit, and those who are not annoyed immediately understand why we do it and appreciate it.
In fact, they strive to answer our questions with long, descriptive explanations on why they are the right fit. We ask open-ended questions and just wait for their long answer. You would be amazed by some of their responses. Some are just perfect, and we accept them with no second thoughts on our part. But some are, oh boy, just crazy.
I remember when airlines used to give a questionnaire to foreigners traveling to the USA. One of those questions was, “Do you have the intention to kill the US President?” I can’t remember the exact phrase, but it was on the lines. I always thought, “Who on earth would answer that question affirmatively?” Well, it turns out that some crazy weirdos do! That question filters the extreme paranoiac cases.
Asking open-ended questions has the same effect for us. You will identify people that will be problematic based on their crazy answers.
Owning Your Lead
Another big issue with OTAs is that you don’t own the lead. This means that they have a captive portal, and you won’t have most of the details of your inquirer: no email, no phone, nothing.
Messaging typically must be done inside their platform. If you are doing things right, you should have a CRM to manage your network that can show you KPIs like how they found you, who’s referring more, the quality of your coliver, etc.
Platforms like Airbnb make it impossible to have this data, so whenever you have the chance, pull your inquirer towards your own tools. And this includes people inquiring via OTAs or any other platform.
For example, it is commonplace to get booking requests via Facebook messenger, WhatsApp, Twitter, even Instagram. Our House Manager is trained to instruct the lead to go to our site and fill out the form. This way, we push the lead to do things our way.
Once they do this, we own him. People have a great tendency to do things their way, but you must design your booking (sales) process to avoid these situations.
We designed our CRM funnel like this:
Any inquiries will be added here, and we classify them based on the channel: our Website (ideal case), Social media (LinkedIn, Twitter, Facebook…), or OTA (AirBnB).
Depending on the channel the lead used, we have different templates to respond. When we send those, the lead is added to this stage.
Here, the critical part is to get enough information to make sure the lead is the right fit. So, depending on the information we got, we might accept them, ask more questions (to ensure they’re an entrepreneur), or directly reject them if the info we receive is clearly not a good fit.
Sometimes, it takes several messages back and forth until we make sure the lead is an entrepreneur (our fit). If that happens, we put the lead in this stage until we resolve.
Wants to Stay Stage:
Once we have validated the lead and think they will be a good fit for us, we send them a template indicating that they got accepted, instructing them to make a deposit.
At this stage, the language we use is a bit different; it’s positive, energetic, and makes the lead feel welcome to a new family. They’re now a part of us.
Closed Lost Stage:
This is a critical stage. Here, we add people who were a fit for us but decided not to stay with us for some reason. These obstacles could include:
- It took us too long to respond.
- Their plans changed.
- They never replied to our follow-up messages.
In any of these cases, we might have lost this inquiry, but the lead is still valuable.
People in this stage are potentially future colivers. You can use this list to measure what is not working in your process. Should you improve your response rate? Did you communicate the experience properly? How many of those lost leads can be reclaimed? Part of your marketing should consider these people as a separate audience.
Close Won Stage:
Self-explanatory. But make sure if you put someone in this stage, they’ve at least paid a deposit! If you don’t get a deposit, you did not close the deal. We might make exceptions, but only for returning guests we personally know and trust.
Not Accepted Stage:
Also self-explanatory. All rejected applicants go here, but you should indicate the reason in case you change your community requirements in the future.
Please note that at each stage, there must be a follow-up process. In our case, it’s a series of three email templates. Depending on how far into the future the reservation is, we set different schedules. It’s not the same if the inquiry is for next week or the following summer, or six months from now. We adapt the timing accordingly.
If after three messages the lead doesn’t respond, we have lost them. We do use a language that implies urgency in a courteous way, like: “We are having many inquiries, the space is filling up, but we’d love to have you.”
We make sure we make a candidate feel important and unique. The last message is something like, “We are very sorry to lose you as part of our community; we are here for you whenever you need us.” You would be amazed to see how many reply to our last message to finalize the booking.
Mama Carlos Says
In the end, it’s all about filtering the people properly, educating them all along the booking process, in each stage, and making sure you follow up. You want everyone to be aware of your culture and your rules, setting the appropriate expectations.
It’s better to lose an inquiry than accepting someone who doesn’t understand where they’re staying. People expecting an affordable place with hotel-like services where they’re the center of the Universe are the worst type of colivers. If you are not sure, ask more questions or reject them.
Whoever manages reservations must be well trained in the process. Ideally, you want a dedicated team member. The more inquires someone handles, the more sapient they will become, able to detect subtle cues from interactions. This training is imperative as they are your first line of defense against problematic guests.
In my case, I think it was a mistake to have the House Manager deal with bookings. In the first years operating, we didn’t have much bandwidth, and the House Manager became the best of jugglers. But this is not ideal; bookings are what brings money to the business, so you must prioritize them.
Having the HM stop whatever they’re doing to take a reservation only introduces potential mistakes in the process, which in the end means losing money. And even if they do it properly, this trades community management for potential sales.
Not to mention those two jobs require wildly different talents, and in my experience, dealing with bookings is perceived by House Managers as a shitty job.
Also, I designed the HM role to be a three to six months long job, which means training them every time you change them. While they are being trained, they inevitably make mistakes which, again, means losing money.
The role of a Booking Manager should be thought of as a long-term job. Experienced people will choose the perfect guests and make almost no mistakes.
Don’t forget that the goal should be to gradually reduce your dependency on OTA platforms until you can get rid of their service. Work on your brand, your content, your community, your service, and you will get to a point where the tribe you are targeting will search for you instead of you searching for them.