Club Mahindra, the BSE listed timeshare based holidays business, which was impacted significantly by the implementation of TRAI’s spam guidelines, has said that its web based reservations have now increased to 55% of total reservations. Last quarter, this was at 55%, and but the growth has been significant since Q1FY13, when the web accounted for only 13% of reservations.
In its annual report, Club Mahindra mentions that for the full year FY14, “the percentage of online bookings increased to 45 per cent” from 29 per cent in the previous year. The company also upgraded its website during the year to integrate all services also available via its call center. “These online features such as managing membership account, holiday bookings, payments, amendments and utilisation of vouchers have been very popular with the members.”
The Shift from SMS Spam to online marketing hasn’t quite worked out yet
More important, perhaps, is the forced shift for the company to online marketing for new customer acquisition. Customer acquisitions for Club Mahindra declined drastically over the past year, because TRAI clamped down its SMS and cold-calling approach to customer acquisition. While the company indicated that there was recovery in the last quarter, by an opaque disclosure “4k net member additions”, instead of an exact number, the net additions are down again to 2059 additions, a drop of 33% over the same quarter last year.
However, the company is bullish on the online market. In its annual report, it says that most of its addressable market is very active online, and “the Company has made a conscious effort to focus on ‘digital’, both as a channel for future membership growth and to build its brand. As a result, response times to customer leads, queries or online mentions are being cut drastically.”
It believes that the cost of acquisition will go down, “because of the shift in focus from Prospect Reach Out (PRO) to Digital and the HFRP (referral) program. We believe that the cost of HFRP and Digital over a long term will be lower although there may be short term expenses that we may have to incur but over the long term we would believe that the cost of acquisition will start coming down,” its Chief Sales Officer Rohit Malik said on the recently concluded Q1-FY15 conference call.
Malik added that the percentage of members that the company is getting from digital and via referrals is significantly higher than what it was either year-on-year or sequential basis, and “we have clearly realized that through digital and member references we are able to generate some bit of pool where we are getting members who would stay with us through the full course of membership, and therefore would also give the economic strata that they come from and would spend that much more and therefore one can look forward to higher revenues from the resort. So I think that conscious call and stringent adherence to that is possibly why (it has) shown this steep drop for the quarter. Going ahead, however; we foresee that playing out and giving us the kind of growth that we expect from the right kind of member base.”