David Cogswell | July 06, 2016 12:00 PM ET
The Lessons of Zerve
One problem I have with dotcom miracles: by the time they catch on, they have already crashed and burned.
According to the site, “Millions of people have already experienced the world through Zerve,” people from 183 countries.
Zerve claims, or claimed rather, that it was born to answer the question: “I don’t know, what do YOU want to do today?”
“How many times have we all uttered those words?” proclaimed the site. How many indeed? If you have been plagued with that question, Zerve could be the answer to your problems.
Or could have been. Now it’s over.
The Two Faces of Zerve
Zerve’s business had two facets. One side was travelers looking to book activities and the other side was made up of the providers of the activities, the vendors at the destinations, who used Zerve’s booking platform, ticketing software and a suite of business management tools.
Both clients and vendors were left in the lurch when the company announced last week that it was ceasing operations.
Zerve’s competitors, clones with similar names such as Zozi, FareHarbor, Bookeo, Peek, Bookingboss and Rezdy, are hovering around the corpse of Zerve like vultures to see what they may salvage of the company’s clients, vendors, markets and assets, or whatever prestige or publicity value they may get from helping clients abandoned by Zerve.
One of Zerve’s competitors, FareHarbor, advanced some money to help Zerve continue a few more days to make the transition easier for abandoned travelers and the vendors whose businesses were operated through the platform and who will now have to rebuild their operations through alternative platforms.
In return FareHarbor gets to be the designated heir to what is left of Zerve’s business, those who are looking to Zerve for a recommendation for where to turn next.
Good luck with that.
Zerve has been around for 13 years, so it’s not exactly new. But in the tour industry, in comparison with the big names like Abercrombie & Kent, Tauck, Globus, Trafalgar, etc., a company in business 13 years is still a startup. Apparently the Zerve business model did not pass the test.
Once the company goes down those 13 years don’t count for much.
It looks like another tale of a dotcom miracle company that was supposed to solve all your problems, but came and went like the wind.
So what went wrong? Zerve may have made a wrong term when it entered a deal a couple of years ago to take on some venture capital funding. As part of the deal the investors forced Zerve to drop its commissions from a 10-15 percent breakdown to a withering 3 percent.
It looks like that little exercise in greed may have caught up with them. Render unto Caesar what is Caesar’s. If the venture capitalists are paying the bills, what they say goes, even if they don’t know anything about the business you are in.
In this case they blew off the traditional sales channels, arrogantly believing they did not need them, and now they have only the spoils.
The Return of Service
We may be also witnessing another trend here. Twenty years ago the Internet opened a world of possibilities of every kind, and the number of things you can access via the Web has grown in leaps and bounds ever since. It’s an enormous range of possibilities. One could say that the amount of information available to a person seeking tours and activities on the Web is an unmanageable volume.
You could spend all of it, all the time a mortal human being is allotted just perusing the possibilities. And in the end you are still just looking at Web pages. You might be looking at a page with nothing behind it.
How do you qualify all these search results? How do you know which one is a good bet and which one is a fly-by-night shyster? Such people are still out there, and the Web provides good cover for those criminal minds who are so inclined.
The Zerve site says, “If you didn't eat, sleep, or do anything else in life, it would take you over 4,000 straight days, 24 hours a day, to try everything there is to do on Zerve.”
This is not an attractive prospect.
For me personally, this kind of service would not be appealing. I would rather work through someone who can personally guide me through the massive amount of information on the Internet. And I don’t want to travel with a company that might not exist next week.
After 20 years of Internet searching, many people are looking for a little guidance, the personal touch as an alternative to endless hours of Internet browsing.
The most recent edition of MMGY Global’s market research project Portrait of the American Traveler, showed that the percentage of travelers who now consider using travel agents for making reservations is 32 percent, up 6 points from 2015. Six points is a significant jump in one year. That trend seems to be on a sustained upswing.
It appears that at least some sector of the population is leaning toward more professional guidance and service. Surveying Zerve’s alleged 30,000 activities is not that appealing to everyone. When Google can give you a million results for practically any search term, it is clear that more information and more alternatives are not what we need. We want to be shown something that is good, something that we can rely upon.
The number one motivator for making a purchase is still a recommendation from a real live person. It could be a friend, or it could be a travel agent. And when your travel agent is saving you from being left in the lurch by a tour operator failure, she is your best friend.
This brings us back to the old subject of tour operator failures, a subject that raises its ugly head periodically, whenever a tour operator goes down, pulling many people down with it through failed vacations, lost money or abandonment.
The U.S. Tour Operators Association was formed back in the early 1970s to create a safe haven for travelers who want to be sure that the tour operators they are traveling with will not rip them off or leave them abandoned in some distant country.
All the members of the association post a million dollars with the organization for the right to display the USTOA logo. They are financially strong companies with solid reputations, and there have been very few failures among them in the history of the association.
The National Tour Association is another tour operator association that also monitors its membership carefully to guard against failures, and there have been very few problems with members in its history.
These organizations help travel agents and the individual traveler know they are not booking travel with some website that turns out to be a failure or a rip-off scheme.
A reliable professional travel agent can help a traveler sort through the thousands of possibilities to come up with something good and reliable.
Steve Born, vice president of marketing for Globus, recently explained this principle well.
“If you have plumbing issues, you want the mindset of a qualified expert,” he said. “If you get it wrong there could be consequences. It’s the idea of having an expert help you with your plumbing issues as opposed to you going to Home Depot and taking it on yourself.”
It’s sad to go to the Capterra website and see the video of endorsements of many small vendors who worked with Zerve. “Zerve gets it.” is repeated over and over by these people. You can’t help but wonder what they are saying now.
There are also countless endorsements on the Zerve site: “Flawless!!! This whole experience was a Godsend.”
“I did a lot of Googling trying to find the right tour and I landed on the Zerve website. After reading the different types of tours and the rave reviews that were given, I decided to go with them.”
The massive number of endorsements don’t mean much now.
Okay, so I’m not the target market for this particular kind of miracle. And this case was an example of why it is sometimes good not to be an early adopter.
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