22.03.2019  |  Strategi & ledelse

Sharing savings with clients drives growth

Business interest in responsibility and purpose is definitely growing, but money still talks louder than anything else.

In their second year of operation, the social impact hotel booking platform Goodwings cracked the code to growth: offering a chance to create social impact alone was not doing the trick, their product had to make money for their customers as well. We will get back to how that works shortly.

“What this tells me is that despite our – the CSR community, social impact companies etc – narrative of how business has changed and is much more purpose-driven, the business of business is still business. The pursuit of profit is still the primary business logic and we should not forget that. Because only by keeping that in mind will we succeed in scaling and mainstreaming responsible business solutions,” says Christian Møller-Holst, CEO of Goodwings since 2017.

Goodwings’ three main learnings

  1. Get to know your market sweet spot – for Goodwings this has turned out to be midsize companies with between 100 and 1000 employees. These companies see Goodwings as a way of joining the narrative on Sustainable Development Goals – as well as a chance to save on hotel bookings.
  2. Be ready to fine-tune your product and pricing model – which in the case of Goodwings led to the creation of the subscription model directed at companies and the development of dashboards that integrate with client companies’ finance systems.
  3. Learn and adjust your partnership model – where Goodwings found that in spite of the best intentions in the affiliated NGOs, marketing of hotel booking platforms may not be their core competence nor their first priority. This has led to a slight adjustment to the original Goodwings policy of no paid advertising. They now run 10 highly targeted, co-branded, online campaigns with NGOs per month

“The other part of the equation – purpose, responsibility – definitely is becoming more important. Many more companies want to be part of the narrative around the Sustainable Development Goals (SDGs), engage employees and customers around purpose etc. But while we see clear signs of change, in our experience it is still not the main driver of decisions,” he continues.

A little less conversation, a little more action
Since launching the platform in November 2016, their market proposition had revolved around booking hotel stays at prices similar to hotels.com and channelling funds to one of a range of NGOs affiliated to Goodwings at the same time. The premise was – and remains – that while the hotel booking industry spends at least half of its profits on marketing, the NGOs would work to activate their members and networks to create a similar effect in terms of reaching customers. This would free up funds to invest in these same NGOs.

The challenge was that while companies might sign up with Goodwings and enthusiastically agree with the proposition and concept, implementation of the Goodwings booking platform in clients’ operations would often be slow. Which meant fewer bookings, less funds to the NGOs and less income for Goodwings.

Shared interests with the CFOs
Today, this is history. Implementation time at clients have been reduced to weeks and the list of clients and NGOs signing up around the world as well as number of nights booked are growing fast.

The key to change was a new proposition to clients. In return for a monthly subscription fee of 79 USD, client companies book at wholesale prices 15 percent below the ordinary rates and get to keep two thirds of these funds themselves while one third is sent to an NGO of their choice.

“It creates a beautiful situation of shared interests. The more the company saves, the more they donate and we have a steady and forecastable income through the subscription fees,” says Christian Møller-Holst.

“It has been a real game changer for us, resonating really well with corporate leaders in our home market of Denmark as well as globally. We have seen bookings grow 10-15 percent month on month in the four months since we launched this model. The key is that we now have the CFO interested in Goodwings and pushing for implementation of our platform,” he explains.

The one exception
One SDG does stand out from the crowd of 17: climate change. Working to reduce or neutralising your company’s CO2-emissions can drive action on its own.

For this reason, Goodwings have contracted with the Swiss carbon consultancy firm South Pole – one of the world’s largest carbon offset providers with 700 projects around the world. With the growing volume of the Goodwings’ business, they are able to purchase carbon offsets at a price that allows Goodwings clients to offset all emissions from their travel activities – including air travel.

“All issues represented by the xx NGOs in our network are important to some companies. But CO2 is important to nearly all companies. That is a big difference,” says Christian Møller-Holst.

Creating sustainable services for the middle
Despite the realisation that nothing beats profit, Christian is highly optimistic around the future of corporate responsibility and the SDGs.

Conversations with clients have shown Goodwings that there is a definite change in process, and that this is true not only for the largest corporations but also for medium-sized businesses that constitute the vast majority of companies.

“We need to service these companies with solid, sustainable solutions that make sense. This is what we aim to do, and by increasing the number of NGOs around the world we now have on our rooster from 10 to one-hundred so far, we are set to double our turnover and number of clients several times in 2019,” Christian Møller-Holst concludes.

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