Cui: "Only the first place can extend the product line in a luxurious way.

Author: Golden Deer Source: China computer newspaper young deer students are very reliable, special paste. September 1, the Nasdaq-listed art Dragon shares rose 10.44%. In the last 6 months, the Art Dragon's share price rose by about 55%. Yi Long Network (hereinafter referred to as "Art dragon") strategy has been recognized by the capital market. The online booking strategy not only allows the art dragon to get out of the 10-year loss quagmire, but also makes it a leader in the catch-up of the travel reservation market.

Yi Long provides preferential booking service for 12,200 hotels and overseas 12余万家 hotels in nearly 500 major cities in China. Hotel booking business is the foundation for the survival and growth of the arts Dragon. In the second quarter of this year, the number of Art Dragon hotel room bookings increased 58%.

In less than 3 years, CEO Cui led the Arts Dragon to the profit. According to his plan, the Arts Dragon will adhere to the online booking mode, a clear distributor positioning, to open a new era of Chinese online booking hotel.

Cui (left) and Liu Baohua discuss the development strategy of Yi Long net

"Staff, service, profit" is the treasure

Liu Baohua: 2009 Arts Dragon for the first time to achieve full-year profit, and 6 consecutive quarterly profit. What measures have you taken to make a profit that has been lost for years?

Cui: The difficulty of the art dragon turning to the profit is bigger. I have done three main tasks:

The first is the establishment of advanced corporate culture. Through investigation and research, Art Dragon has established the enterprise culture of "staff, service and profit". The positioning of the Art Dragon is a service-oriented enterprise, so we must first take good care of the employees, the staff can take care of the customers, this logic is what I said "after the body and body first." Art Dragon concept is people-oriented, customer service as the center.

The second is to build a team. Art Dragon Management team talent, requires both Western management knowledge, but also have domestic market operation experience. Employees, services, profits of the corporate culture, in the US-funded enterprises, art dragon talent must be able to practice this culture.

The next step is to develop a strategy that is critical to the development of the enterprise. Art Dragon's strategy is to develop online booking business. Compared with the traditional call center, the prospect of online booking is more optimistic. Compared with Ctrip, the art of the development of online reservations in the space is broader.

After the strategic determination, the art Dragon is divided into three steps to implement gradually. The first is to establish the core competitiveness. The second step is to show the competitive Advantage fund. The continuous accumulation of core competitiveness to form a competitive advantage. Compared with Ctrip, the advantage of the Art Dragon is product-rich. At present, art Dragon has domestic hotel customers 12,200, international Hotel customers 120,000. Compared with Ctrip, the Art Dragon is not only the number of customers, but also low booking prices, art long online booking services for consumers to provide rebates coupons. In addition, the relative Upaika, experience center, such as offline marketing, art Dragon online marketing to consumers to experience better on-line booking.

The Arts dragon has now made ends meet, with hotel sales up 58% in the second quarter of this year. Next, the art Dragon will focus on the formation of brand advantages, in the consumer has a broader impact.

The core competencies include culture, team, strategy, infrastructure and other content. Art Dragon has established Oracle ERP, Siebel CRM and customer service system. Through the construction of 1.5, the Art dragon has promoted the performance of the reservation platform, and the first one in China has achieved a 24-hour call service. Through art Dragon booking but to the hotel does not have room for consumers, will be the art of the first night to pay the price of the dragon. Art Dragon has changed the industry's attitude of disrespect and attention to customers, ensuring that customer service is the first place.

Enterprise profitability is a very difficult system engineering, to grasp the core issues, and have phased goals and corresponding measures.

Liu Baohua: The idea of the management of Yi Long is similar to that of "common governance" in Europe. To instill management thoughts into enterprises in difficult times is bound to be a big challenge. What is the biggest challenge in the art Dragon reform?

Cui: Any reversal of the company has a dark period. Enterprises riddled with holes, do a systematic project, can produce benefits.

In the Art dragon, the directors ' remuneration and shareholders ' interests are linked, so that they are more pragmatic and more sense of ownership in the early period of the enterprise reversal. The income of ordinary employees is tied to the level of customer service, and the commission of Call center staff is adjusted dynamically according to customer satisfaction, which improves the enthusiasm of staff to improve service quality

In the difficult period of the enterprise, if the right measures have been taken without effect, the measures should not be challenged, which can only indicate that the measures taken are not sufficient enough to improve on the basis of the original measures. After the completion of the basic work, enterprises should focus on strengthening the core competencies, to find a breakthrough in the development of enterprises. Profitability at this stage is meaningless, because if the core competencies are not strengthened, these benefits will soon disappear.

In addition, then the CEO should properly respond to staff questions. The strategy is right, but the expected results do not occur, then there will be a sound of doubt. In the face of questioning, CEO pressure is very high, then the CEO to constantly communicate with employees, let them see the stage of victory, motivate the team's work.

Win customers and make profit by marketing service

Liu Baohua: Art Dragon's second quarter of this year's earnings show that marketing profits were cut 29% year-on-year. What impact will this have on the development of the art Dragon?

Cui: Art dragon in the second quarter of the marketing investment to create the highest level of history, but its overall turnover percentage has declined. The reason for the profitability of the art Dragon is the improvement of customer service level, the current customer satisfaction of 96.7%. Art Dragon's call center is the only one for four consecutive years as "China's Best call center" unit. To customer interest as the center, to create value for customers, improve customer service levels, this is the purpose of the dragon art. Only the cost of acquiring and retaining customers has fallen, the art dragon can make a profit. In the area of E-commerce, however, the cost of acquiring a new customer usually goes well beyond the first-trade income. Only customers repeat the purchase, the business will be profitable. After the improvement of the service ability of the dragon, the customer repeats the purchase and the marketing cost of individual customers ' individual transaction declines.

The marketing cost of the art dragon fell from 45% of sales to 32%, and administrative and general expenses fell from 20% to 10% of sales. But the art Dragon insists that the cost reduction cannot be at the expense of the employee, and we want the employee income, management income and shareholder income to be linked. Profitability can not be reduced by reducing employee income, nor by reducing marketing investment, but to do a good job of marketing services, from offline marketing to more efficient online marketing. The decrease of marketing cost accounted for the brand of Art Dragon began to build up, operation efficiency improved, service quality increased greatly.

Focus on not extravagant expansion

Liu Baohua: Ctrip continuously expands product line. And the Art Dragon Hotel business accounted for 68%. For enterprises, a strong product line has both advantages and disadvantages, good management, disadvantage is more difficult to grow. What does the art dragon do to grow? Does the art Dragon expand the product line?

Cui: In order to enrich the product line, Art Dragon has free travel and cruise products, but the core is the hotel business strategy will not change. Only the first place on the market can extend the product line in luxury. The second will not go bankrupt because of concentrating on the core business, but will fail because of the blind expansion. The second place with the first strategy to participate in competition will inevitably lead to failure, this is what grandson called "the enemy of the strong, the enemy of the fight also." Art Dragon insists on concentrating mainly on hotel reservation service, and other industries are only auxiliary. Ctrip is the market leader, it has four pillars, can use luxury to describe, but the art dragon only a "granary."

Liu Baohua: "The Three Laws," a book that a single market-type enterprises can only have three. Other enterprises must follow the path of specialization. In the absence of major technological changes, the fourth place to become a comprehensive manufacturer often fails. Art Dragon as a second, only focus on not expanding, whether it will affect the growth of income? In 2009, the Art Dragon said it wanted hotel bookings to account for 80% of total sales, but the actual figure was 68%. The figures for the second quarter showed 67.7%, flat last year. Is this in line with the art Dragon plan?

Cui: Art Dragon must adhere to the strategy of differentiation. Ctrip expansion product line, art Dragon concentrated contraction, so that both have the space for development. First, online booking space is very large, China has 300,000 hotel suppliers, art Dragon covers only 12,200. Second, the art Dragon wants to make the first place in the online booking market, but the proportion of people who actually book online in China is less than 5%. The United States this number exceeds 60%, so the hotel direct sales and arts and crafts distribution of the market space is very large, online booking is the same.

Hotel booking revenue accounted for the proportion of art dragon sales will certainly improve. Art Dragon Hotel reservation business growth rate has far exceeded the ticket booking business growth rate. In addition, Art Dragon has about 10% of the income from advertising, hotel plus advertising revenue has accounted for a larger share.

Differentiation is the unique competitive advantage of the art dragon. Now the main work of the Dragon is to strengthen, improve the customer experience, make the service faster and smarter. At present, the Art Dragon and Expedia system platform reached a docking, users can book the world through the art of 120,000 hotels. But the core business of the Art Dragon is domestic customer reservation domestic hotel, relying on foreign hotel art dragon can not become a market leader. We are fully aware of this, so we will not take the Foreign hotel reservation business as the core competitiveness.

Cui, CEO of Yi Long Network Information Technology (Beijing) Co., Ltd.

Earn Commission Development online booking

Liu Baohua: 2009 Art Dragon increased the input of value-added services. To maximize customer value, we must provide more value-added services, and value-added services can increase the income of the Arts Dragon. Does the art dragon have a layout in this respect?

Cui: The art Dragon thinks that there are three moments of truth in the online booking service: The first is where consumers go to get information when they plan to travel. The second is how consumers book hotels and which deals are more convenient and smarter. The third is that consumers feel better about the product after they travel.

These three moments of truth are the points in which the art dragon needs to occupy a competitive advantage. The first truth time to put content, art Dragon currently has 60,000 destination city information, the information is accurate and comprehensive. Yi Long unique 360-degree hotel panoramic display, providing customer reviews and the hotel description of the content. In addition, the destination guide, attractions information, raiders, etc. are part of the content. The Arts Dragon has a very strong commitment to content.

The first moments of truth include the competition and cooperation partners of the art dragon, such as Google, Baidu and cool news. Art Dragon Advertising in the selection of the principle is the consumer search information, art Dragon information will appear. The consumer to the art Dragon Trade, complete the second truth moment of content. At the third truth moment, the Art dragon offers more concessions to consumers through activities such as coupons or credits. In addition, the intelligent customer booking system improves the consumer experience: when the customer calls the Art Dragon, the system can immediately confirm the customer's identity and transaction records, the customer's online booking order can be canceled online, the completion of the booking of consumer content, customers can get the art Dragon net return of the consumer coupons. These three moments of truth are for the art dragon to fight for. The Arts Dragon does not want to increase revenue through value-added services, but instead wants to increase the number of customer bookings by improving the quality of service.

Liu Baohua: The State Council proposed to cultivate tourism into a strategic pillar industry, all over the large-scale investment in tourism development. This is a huge business opportunity, does the Art dragon have the corresponding plan?

Cui: The arts Dragon is very welcome to government investment, such as railways, airports, and more infrastructure construction. But a piece of the money is not a profitable way for the Arts dragon. The profitable way for the art Dragon is simply to help customers book hotels. Art Dragon to attract consumers, to provide hotel booking services, after the completion of the transaction, the Arts dragon charge a certain commission. This is the business model of the Art dragon, so the art Dragon wants to keep the core competitiveness of the enterprise and to create value for the consumers through service concentration.

Liu Baohua: What does Art dragon think about the impact of mobile internet and mobile phone bookings on online bookings? Art Dragon's online booking strategy How is the implementation effect? What is the proportion of online bookings?

Cui: The proportion of online bookings in China is only 5%, so it is the core task of the whole online tourism industry to book online. For the upstream and downstream enterprises, online booking of the lowest marketing costs. This is the basis for online booking business. To achieve online booking, there are three conditions must be guaranteed: first, to have sufficient bandwidth; second, the transaction intelligence is simple; third, use card trading to match. Only the infrastructure is further improved, online booking can take off.

Now the user experience of mobile phone booking is far worse than online booking. The success of the phone booking model depends on whether there are enough customers to use the smartphone, whether it provides enough content for the customer to choose from, and whether the transaction provider supports the model. So it's not clear whether the phone book will work. The first priority of the entire online tourism industry is to transfer customers, call center customers and travel agency customers to online booking accounts, reducing costs.

At present, art Dragon online booking ratio of more than 1/3, online booking faster than the call center. In the future, most of the booking business of Art Dragon will be realized through the Internet.

Create value and achieve win

Liu Baohua: Where to go net President Zhungchengsu that if the search engine is docked with the hotel reservation system, it will be able to achieve a full chain subscription, thus providing a better experience. There may be mergers or alliances in the online travel industry. What does Art dragon think about it?

Cui: I have three views: first, the face of consumer direct sales and distribution have developed space, Art Dragon is not opposed to direct sales.

Second, there are three prerequisites for distribution: First, there are many suppliers in the market, consumers need to choose and compare them; second, oversupply of products. In most of the time and region, China's hotel oversupply; third, the distributors charge a lower commission than the hotel in the original customers and then want to get the cost of marginal customers. Online booking enterprises should be clear about the content of the online tourism industry, what the customer needs, and the object of the competition, can not be the wrong partner to define a competitor.

Third, what are the rules of industrial development? How to change the rules to make the relationship between enterprises and upstream and downstream enterprises more harmonious.

Art dragons can exist because the hotel's distribution cost is lower than its direct access to the cost of marginal customers. Ctrip-led distributor-centric philosophy leads to distributor control and hotel anti-control scenarios that make the industry 0 and game. Art Dragon advocates to consumers as the center, upstream and downstream enterprises to create value for consumers, reduce the cost of the industrial chain.

The art Dragon will not demand a higher commission, now the average commission is 15%, which is more reasonable level. The industry will eventually form a state of equilibrium, that is, distribution is lower than the marginal cost of hotel direct sales. The relationship between the art dragon and the hotel is both competition and cooperation, only when both sides are focused on the consumer, the solution is 0 and the game. Only consumer-centric, create consumer value, in order to achieve the two-win. We need to establish a consumer-centric new industry logic. The art dragon thinks must create value for the consumer, creates the value for the partner, establishes the industrial ecosystem.

7 Days Hotel Choice Art Dragon instead of Ctrip, is because the Art Dragon as a distributor, positioning clear. Distributors to create value, the hotel can direct the development of customers, but do not sacrifice the interests of distribution partners. Only by recognizing this, the two will not do anything detrimental to the development of consumers and both sides. 7 Days Hotel CEO Zheng Very much agree with this point of view, so the choice of art Dragon as the only distributor of 7 days Hotel online travel industry, art Dragon Hope to use their marketing advantages, help 7 days hotel and all other hotel partners continue to expand their business.

Journalist Notes

Firm goal Clear Road

"By October 8, I was only 3 years in the Arts dragon," Cui stressed this detail, so that the reporter deeply felt his methodical, confident style. Can imagine, he should be at the beginning of his time to arrange a thorough and informative schedule, what to do, what to achieve what results ... He is currently leading the art dragon in accordance with his ideas and strives to go farther on the road to success. As he said, it is not difficult to formulate a good policy, it is difficult to smooth through the dark period, keep the clouds open to see the moon Ming. Cui to defend the attack, clearly adhere to the hotel reservations this need to accumulate the "granary", improve the management system, has made a phased victory.

Ploy The layout of the dragon, it will not blindly pursue pluralism, become a puffiness enterprise, but will be clearly positioned to strive for excellence in the attitude of dedication to build customer experience as the center of the hotel booking service. With the absolute number of hotels in China and the current ratio of online bookings, there is great potential for the online booking business of the Art Dragon. But don't forget, the development of Internet technology greatly simplifies the consumer's information selection and comparison process, the competitor Ctrip's strength is also obvious to all. Art Dragon to realize with Ctrip, to Cui for the heavy and road far.