Chatbots are “an entry point towards constructing a customer journey”, says entrepreneur who found his footing in travel after two failures
TWO failures later, former government scholar-turned-entrepreneur Joseph Ling may have finally found his footing with Vouch, “the app-less hotel digital concierge”, and he may well have travel and hospitality, and Covid, to thank for it.
Yes, strange as that may sound but when you read about his journey, you will understand why.
Ling, who came up through the SPRING Singapore system, which encourages scholars to “be your own boss”, started Vouch in 2016 with a government grant, after completing his two-year bond. The business then was voucher-based – hence the name – and what it did was amass big data for retail advertising, and enabled advertisers to target customers with vouchers.
He had big dreams. “I was a first time entrepreneur, I was a bit arrogant and made mistakes. I thought we could conquer the market in three months, we ended up building a platform that no one was willing to pay for. People kept asking us to add features and we kept building, but no one would pay for it.”
So first lesson learnt – build only what people will pay for.
Lesson learnt from first foray into chatbots
In 2017, the business ran out of money – the grant as well as his own savings disappeared – and he let his team go. He gave it another go – pivoting to chatbots to “help people sell stuff on Facebook”.
“These sellers in Malaysia, Philippines and Vietnam were getting asked silly questions by consumers – scale of 50-100 times everyday – so I identified that as a problem,” said Ling. He pumped in his own money, hired a couple of programmers, created an app “where with one button, it understands what you are selling and automatically answers queries”.
It charged sellers a small fee a month and the take-up was “quite successful”. But the problem was far too high a churn rate – sellers turning over every one or two months, with an almost 90% churn. “Turns out social commerce is highly complicated behavior – consumers have lots of questions, and they want to bundle this and that, and discount this and that.”
A year later, he ran out of cash again and let the team go. There was more to lose this time – a pregnant wife with a third child on the way. Tossing between getting a high-paying corporate job and trying again, he asked his wife and both agreed to give Vouch another go.
This time, he raised S$50,000, stuck to chatbot technology but now focused on facilitating B2B sales and the turning point came when he took part in a Hotel Innovation Challenge organised by the Singapore Tourism Board (STB). His product caught the attention of the then-general manager of Andaz Singapore, Olivier Lenoir, who paid (hooray) Vouch to create a digital concierge for his property.
Deployed on Facebook Messenger, the chatbot was able to handle between 70% and 90% of queries from the hotel’s guests, said Ling.
With this use case, Ling started figuring out what consumers wanted. “The magic of chat is, it helps you to figure out what guests are looking for, even if you don’t have the feature. You track the conversations and you will find questions always lead to people wanting to make transactions. ‘I want more towels, I want water bottles.’ And we built features to respond to those conversations.”
Toning down the chat to focus on functionalities
So what it did was tone down on the chat side “which is not the most intuitive part of all transactions” and started adding functionalities such as ordering food and other services such as spa, pool and restaurants. During Covid, this functionality has come in handy because hotels had to manage capacity.
“Our focus was to build a good product, to provide the best web-based interface and integrate that with chat, bot and live,” said Ling. “All guests have to do is scan a QR code, no need to download an app.”
With customer familiarity with QR codes, another forced behavior thanks to Covid, guest usage has been high on its interface and Ling said a majority of transactions was happening on Vouch.
Today, it claims to have 20% of the market in Singapore, with about 16,000 rooms covered. Covid gave Vouch the push it needed for adoption by hotels which had to innovate to sell stuff beyond hotel beds. When the pandemic hit, Vouch also quickly expanded its product offerings to add a food & beverage module, including food delivery. It gave that product free to hotels to “build relationships”.
“That strategy worked handsomely, we converted them to paying clients,” he said. So even though he had learnt from the first experience, not to build unless people are willing to pay for it, there are exceptions – if you are confident what you are building is exactly what people need at the time.
It charges based on a SaaS Model, with fees dependent on size of hotel. Its features now include an FAQ, room request, F&B (in room, in restaurant, deliveries, takeaways) and facilities. Live chat is available where necessary and it will launch mobile check-in this month.
“Our intention is to cover the entire guest journey, pre-stay, during stay and post-stay,” said Ling. “We did the tough integration with the PMSes, housekeeping systems – that was the hardest thing to do. For hotels without their own system, we use a simple method – add room attendants to the chat.”
Expanding beyond Singapore and hospitality
Having secured its footing in Singapore, which accounts for 90% of its business, Vouch now wants to expand overseas, eyeing Indonesia and South Korea where it has offices as well as Japan and the UK. Its target clients are mid-scale to luxury hotels, mainly chains which can roll it out at the group level as well as individual property level.
It’s also going beyond hospitality to cover attractions such as museums and attractions. It is developing its digital concierge system for museums in Singapore, said Ling.
The biggest challenge currently is deploying the product abroad, said Ling. “Closing the sale with overseas hotels is harder. Hotels have been affected by Covid, they have less money, less desire to purchase but they have been forced to innovate during this period. I believe it’s all about luck and timing – we hung on long enough to enjoy a bit of an upside down but we still have a long way to go.”
His product helps hoteliers at a time of need – not only in revenues but also in manpower. With hotels having cut down on manpower, it’s been hard to manage the ups and downs in occupancy with the fluid and changing nature of this pandemic and constantly changing restrictions. “There’s more work, less manpower, so we have to turn to tech,” said Ling.
So from retail to social commerce to hospitality and travel, Ling feels he’s learnt a lot along the way, especially about the limitations of chatbots. “You have to predefine what you want to use it for, you can’t expect it to answer everything. You analyse the conversations, and you respond to those learnings. Chat almost always moves to transactions.”
As he sees it, chat is the best automated consumer research tool there is for hoteliers. “That’s how you should use it, it is an entry point towards constructing a customer journey.”
Bootstrapped so far with S$200,000 investment, Vouch now has 33 staff, half of whom are based in Singapore. At the end of 2019, it had 12 staff. He acknowledges the usefulness of government grants to help entrepreneurs like him by “subsidising failures” and giving them softer landings.
At the end of the day, though, it is up to the entrepreneur to make it or lose it, he said. “You have to be realistic, learn to manage cash flow, don’t treat grants as revenues, and seize opportunities when they rise.”
Featured image credit: Getty Images
