Microsoft Office Business Scorecard Manager

Customer Solution Case Study

Scorecard Solution Helps Online Travel

Company Measure the Road to
Overview
Country or Region: United States
Industry: Travel
Customer Profile
The largest online travel company
in the world, Expedia serves
travelers on three continents.
Business Situation
To better serve its online customers,
Expedia needed real-time insight
into its Web site performance.
Solution
Implementing a Balanced Scorecard
solution using Microsoft Office
Business Scorecard Manager 2005
allowed Expedia to put complex
Web performance metrics and Key
Performance Indicators at its
analysts fingertips.
Benefits
Faster insight into Web operations
allows for very high responsiveness
to Expedias customer experience.
Automated data collection saved
time and effort, allowing analysts to
spend their time developing
answers rather than crunching
numbers.

Customer satisfaction is essential to helping

make Expedia a great company. With
scorecarding, we have the means to
evaluate how well we are doing to make the
company even greater. And if scorecarding is
adopted throughout the company, I believe
we are that much closer to becoming the
largest and most profitable seller of travel in
the
In theworld.
world of e-business, going from zero to millions in
a short period of time was common in the mid to late
nineties. And so was going bust just about as fast, when
the bubble burst. There were a few savvy companies
that survived the bustno doubt because they offered
real products and services that showed real returns. One
of those companies is U.S.-based Expedia, which has
become the largest online travel agency and the fourth
largest travel company in the world since going public in
1999. With customer satisfaction critical to the success
of online business, Expedia needed real-time insight into
its Web site performance. To do this, the company
implemented a scorecard solution using Microsoft
Office Business Scorecard Manager 2005. The solution
gave Expedia access to complex Web performance
metrics and the ability to respond quickly to customer
satisfaction issues.

Microsoft Office Business Scorecard Manager

Customer Solution Case Study

Scorecard Solution Helps Online Travel

Company Measure the Road to

Situation

We need a timely
and sophisticated
way to gauge the
customer
experience and its
impact on the
companys goals
and bottom line.
Laura Gibbons, Manager, Customer

Expedia has become a major force in

the travel industry global playing
field. The company provides direct
access to a broad selection of leisure
and corporate travel products and
services through its North American
Web sites, localized versions
throughout Europe, and extensive
partnerships in the Asia-Pacific region.
Becoming a global concern in such a
short period of time is not without its
challenges. The massive growth
Expedia has already achieved could
hinder the company as it aims to
become the largest and most
profitable seller of travel in the world.
Are We Getting and Keeping
Customers?
The competitive nature of todays
marketplace leaves many companies
at a disadvantage if they merely keep
an eye on the bottom line to ensure
that business is on track. By the time
quarterly results are available, the
ship may already be sinking.
In an online business, such as
Expedia, the competitive marketplace
is even tougher, with competitors just
a mouse click away. Saying
competitive means ensuring youre
making the right moves every day,
not just on a quarterly or even
monthly basis.
That task might not be difficult for a
sales team, but for a non-financial
business unit, such as customer
satisfaction, it seems like an
impossible challenge.
The customers shopping experience
is key to Expedia revenues, but there
isnt a clear way to measure its

impact on profitability or the

companys overall business
objectives, says Laura Gibbons,
Manager, Customer Satisfaction & Six
Sigma at Expedia. We need a timely
and sophisticated way to gauge the
customer experience and its impact
on the companys goals and bottom
line.
Are We Frustrating Our
Customers?
The online shopping experience can
make or break an online business. A
site must be well designed, not just
from a visual standpoint, but also
and more importantlyfrom a
usability standpoint.
You can have the best selection of
products and services compared to all
your competitors, but if its difficult
for customers to find what they want,
they will go elsewhere, says Gibbons.
The entire selection and purchasing
process needs to go quickly and
smoothly.
The Expedia Customer Satisfaction
group also wants to ensure that a
good online shopping experience is
mirrored by a good trip experience.
We want to be able to measure the
whole trip experience, right down to
ensuring our vendors make good on
the travel arrangements our
customers make, says Gibbons.
Are We Losing Customers?
Because the customer experience is
so critical to Expedia, all customer
issues need to be tracked, monitored,
and resolved as quickly as possible.
Unfortunately, Gibbons and her team
lacked visibility into the voice of the
customer.

Without a total picture of customer

satisfaction and the actionable data
to back it up, the group was not only
a potential source of revenue loss at
Expedia, but it found it difficult to
demonstrate whether or not they
were taking actions that aligned with
corporate objectives.

Our business
analysts spent two
or three weeks
every month pulling
and aggregating
data, leaving them
no time to do the
job they were hired
to doanalyze
data.
Laura Gibbons, Manager, Customer

It wasnt as though we didnt have

any customer satisfaction data to
draw onwe, in fact, had lots of great
data. Our problem was that we didnt
have a way to analyze it or act on it
until, in many cases, it could have a
negative impact on the business,
says Gibbons.
Defining the Problem
The idea of measuring the impact of
non-financial performance areas on
profitability isnt new. Management
and investors alike long ago realized
that intangibles such as Research and
Development or Customer
Satisfaction are reflected in a
companys overall performance, even
if accounting rules dont recognize
their results as assets.
But just how do you measure
something like customer satisfaction?
And once youve decided on the
criteria, how do you show its impact
on profitability and that its aligned
with the bigger, corporate picture?
After some research and
brainstorming, our team developed a
vision of what we needed: a tangible
way to define and monitor the key
drivers of customer satisfaction, such
as breadth and depth of product
selection, ease of the purchase
process, value for price and the level
of service provided by our vendors,
says Gibbons. Ultimately, these are

the drivers that will help build

Expedias long-term growth.
Back at Square One
Gibbons and her team met their first
hurdle almost immediately. Not
management buy-in, but rather the
overwhelming amount of data related
to customer satisfactioneverything
from site analytics, such as clickthrough conversion, to various
customer relationship management
(CRM) systems and customer survey
feedback. In all, there were 20
disparate databases with 20 different
owners.
To start, they charged an Expedia
business analyst to pull and
aggregate data for a number of key
measures of customer satisfaction.
We called it a scorecarding solution
even though it was completely
manual and there was no real way for
end-users to build or manage their
own scorecards, says Gibbons.
While it was a start in the right
direction, we quickly found that we
still didnt have a way to analyze the
data or act in it in a timely manner.
Instead of taming customer
satisfaction data and using it to
develop strategies for helping Expedia
make good on its corporate mandate,
the Customer Satisfaction group
added a new level of pain to their
challenges through wasted resources.
Our business analysts spent two or
three weeks every month pulling and
aggregating data, leaving them no
time to do the job they were hired to
doanalyze data, says Gibbons. We
ended up where we started: lots of
great data that was not actionable. By

A year ago, it
might have taken
weeks or months to
sort out this type of
problem.
Scorecarding makes
it exponentially
easier and faster to
get at the data we
need, making it
possible to resolve
issues in a matter of
minutes or hours.
Laura Gibbons, Manager, Customer
Satisfaction & Six Sigma, Expedia

the time data was presented to the

team at the end of the month, it had
lost some of its value since it was
stale and had no context. We still
didnt know if our results were
aligning with the companys overall
objectives.

Solution
Time to Regroup
The value of scorecarding wasnt lost
on Gibbons and her team. They saw
what could be possible with
scorecarding, even though their inhouse solution provided less than
optimal results.
Through our own trial and error, we
realized we needed something that
would give us a more holistic view of
any particular Customer Satisfaction
issue on demand. It wasnt enough to
aggregate data; it needs to be viewed
in context of strategic goals, and
individuals have to take ownership of
the results, says Gibbons.
The Customer Satisfaction team went
back to the drawing board and came
up with a refined vision of what they
needed. Number one on the list was
being able to respond to any business
issue quickly.
Under our old solution, customer
satisfaction issues were aggregated
on a monthly basis. By the time they
were brought to the attention of the
Customer Satisfaction group, the
information was stale, says Gibbons.
It was easy to see that this could
have a significant impact on our
customers and, ultimately, on the
company as a whole.
To gain the kind of agile insight
needed to respond quickly to business

issues, the company chose Microsoft

Office Business Scorecard Manager
2005.
Refining the Vision
To start, the Customer Satisfaction
group created a more detailed vision
to link the data they collected with
Expedias mandate. They started with
a detailed analysis of the fundamental
drivers of the departments
performance.
Its not enough to say that our KPI
drivers affect customer satisfaction
levels, says Gibbons. We need to
track all events that may occur in the
booking process, the result of the
eventsuch as abandonment versus
a call to Customer Careand the
long-term effect it has on loyalty and
retention. This knowledge helps us
continually serve our customers
better.
Gibbons and her team spent a month
defining the scorecards that would
ultimately measure the Customer
Satisfaction groups ability to deliver
on Expedias corporate objectives.
This process included:

Deciding how to measure

customer satisfaction. We have
20 databases that each measure
some aspect of a customers
relationship with Expedia. Using
business logic, we determined
which data in each database would
be useful in demonstrating a
customers level of satisfaction.
That information, in turn, became
the basis of our scorecards and
their corresponding key
performance indicators (KPIs), says
Gibbons.

Setting the right performance

targets. That meant deciding
whether KPI targets had short-term
or long-term pay-offs. In the shortterm, for example, a customer
might be happy that the purchase
process is easy to use, but in the
long-term, be turned off by Expedia
because the vendor at the
customers destination didnt honor
the reservation as booked with
Expedia.
Putting data into context. For
Gibbonss group, that meant being
able to tie their data to ongoing
customer satisfaction improvement
projects. We also wanted to be
able to drill down into data to view
it from different angles, says
Gibbons. For any particular
customer issue related to a KPI, we
wanted to be able to see exactly
what the customer sees.

Benefits
Putting Vision in Action
The Customer Satisfaction group
ultimately came up with about ten to
twelve objectives that linked directly
to Expedias corporate initiatives.
These objectives, in turn, are linked to
more than 200 KPIs within the
Customer Satisfaction group. KPI
owners can build, manage, and
consume their own scorecard, while
managers and executives have a
transparent view of how well actions
are aligning with strategy on demand.
The KPIs draw data from several
sources, including several types of
customer surveys, CRM systems,
Interactive Voice Response (IVR), and
other customer self-service systems,
as well as collections of industry data.
KPIs measure everything from the

customer shopping and buying

experience, the customers pre-trip
experience to, ultimately, the
customers trip experience.
The ability to drill down into data is
proving invaluable to the team. For
example, there is a KPI for customer
booking reconfirmations online versus
utilizing the IVR system or the more
expensive Contact Center channel.
With the new scorecarding solution,
the team is also able to drill down to
find out how many of those costly
calls are abandoned and where in the
system the call is abandoned. Insight
into this type of customer behavior
can then quickly translate into action.
A year ago, it might have taken
weeks or months to sort out this type
of problem, says Gibbons.
Scorecarding makes it exponentially
easier and faster to get at the data
we need, making it possible to resolve
issues in a matter of minutes or
hours.
Another key component of Expedias
scorecarding solution is a
dashboarding feature for at-a-glance
graphical representations of data. It
takes just moments to pull together a
trended view of data over time or
overlay graphs of two KPIs, such as
the wide selection of travel products
and buyer usage.
We have such a wealth of useful and
accurate data at our fingertips now,
says Gibbons. With scorecarding, we
can see whether or not were
measuring up on individual KPIs,
which in turn is reflected in our group
objectives, and, finally, in the
companys objectives.

Easy Integration and

Collaboration
From a technology perspective,
Microsoft Office Business Scorecard
Manager 2005 met all of Expedias
requirements. It was easy to integrate
with Expedias existing systems, such
as Microsoft SQL Server 2000. And,
because its a Microsoft Office
product, it didnt require a lot of enduser training. End-users can build,
manage, and consume their own
scorecards without the intervention of
the IT department.
Business Scorecard Manager also met
Expedias collaboration requirements.
We needed a way for the Customer
Satisfaction group to collaborate with
respect to our team objectives, says
Gibbons, Manager, Business
Scorecard Manager integrates with
SharePoint, a Web-based portal that
allows our team members to share
insights and analyze data as a group.
By leveraging its employees skills,
as well as its existing technology
investments, Expedia is getting
greater value for less cost, time, and
risk than had they chosen to build
their own scorecarding solution from
the ground up, adds Gibbons.
Return on Investment
Its still early to reflect on Expedias
return on investment for its
scorecarding solution. There is buy-in
at the companys corporate level, all
of whom are excited about the
opportunities scorecarding creates for
employees to align their day-to-day
activities with the companys
strategic objectives. There are plans
in the works to implement
scorecarding company-wide.

Customer satisfaction is essential to

helping make Expedia a great
company, says Gibbons. With
scorecarding, we have the means to
evaluate how well we are doing to
make the company even greater. And
if scorecarding is adopted throughout
the company, I believe we are that
much closer to becoming the largest
and most profitable seller of travel in
the world.

Company Profile
Expedia, Inc. [Nasdaq:EXPE]
Corporate mandate: Expedia, Inc. is
on a mission to become the largest
and most profitable seller of travel in
the world, by helping everyone
everywhere plan and purchase
everything in travel.

Corporate Travel Group:

Comprehensive online travel
products and services for
corporate customers worldwide.

Partner Services Group:

Consolidates all of the companys
supply expertise into one strategic
group to heighten the ability to
serve supply partners and simplify
the way they interact with
Expedia, Inc.

Expedia Europe, Middle East,

and Africa: Operates Expediabranded Web sites in France,
Germany, Italy, the Netherlands,
and the United Kingdom, as well
as Anyway.com, a leading seller of
discount air travel in France, and
Voyages-SNCF.fr in partnership
with Frances railway company,
SNCF.

Expedia Asia Pacific: Manages

the companys activities in Asias
fast-growing travel markets.

eLong: One of China's leading

Web-enhanced travel service
companies and the second largest
travel provider in China.

Size: Expedia, Inc. employs 4,300

full-time employees worldwide (as of
December 31, 2004).
Industry position: The largest online
travel agency in the world; the largest
online leisure travel provider and third
largest travel company in the U.S.;
the fourth largest travel company in
the world.
Management/ownership: In 2001,
USA Networksnow
IAC/InterActiveCorp (IAC)led by
Barry Diller, bought a controlling
stake in Expedia. Dillers company
bought the remaining stake in the
company in 2002. In July 2005, IAC
separated into two publicly traded
companies: Expedia, Inc., and IAC.
Barry Diller remains Chairman and
Senior Executive of IAC, as well as
Chairman of Expedia, Inc. Expedia,
Inc. is led by CEO Dara Khosrowshahi,
formerly the Chief Financial Officer of
IAC.
Businesses
Expedia Inc. owns and operates a
diversified portfolio of U.S.-based and
international businesses, including:

Leisure Travel Group: Focused

on the leisure travel market and
includes Expedia.com, Expedia.ca,
Hotels.com, TripAdvisor,
Hotwire.com, and Classic Custom
Vacations (CCV).

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