Promotional Codes - Vacasa

My Role

Product Manager for Vacasa.com leading a scrum team of 5 SWEs and 1 UX, in collaboration with Marketing, Revenue Management, and Payment Processing team.

Background

As PM of Vacasa.com, my objective was to drive as many reservations through the site as possible. I worked closely in conjunction with the Digital Marketing team to develop a roadmap to bring more users to the site and convert them at a higher rate. We identified Promotional Codes as a major opportunity to power our marketing campaigns. In addition to promo codes being a well-established e-commerce tactic, particularly in the travel industry, we saw several use cases for promo codes that were specifically salient to Vacasa’s business model and goals, including:

• Drive targeted reservations - as a two-sided marketplace, it was crucial that we keep our homeowners happy and profitable, otherwise they churn and we lose our inventory of homes. If a home went a long period of time underperforming on expected reservations, a homeowner was almost certain to leave our management service. That means that not all reservations are actually of equal value to the business — a booking on a home that receives many reservations is not of the same long-term value as a booking on a home that has not seen as many. Ideally, we’d see a relatively even distribution across our inventory. With promo codes in our marketing arsenal, we could build campaigns targeting under-performing homes and ideally reduce homeowner churn.

• Build campaigns around seasonality - The vacation rental industry is highly seasonal, with multiple overlapping seasons depending on region. We saw that promo code campaigns could 1) allow us to seize more of the market share during the competitive high season, and 2) increase demand during the low season.

• Target user groups - Promo codes could also be used to target specific customer segments / personas. An example being what we called the “drive-to weekend getaway” — customers who were more likely to book spontaneous travel to a location within driving distance (e.g. San Francisco to Lake Tahoe or Austin to Galveston).

• Generate repeat bookings - Perhaps our most important customer segment were repeat bookers — guests who returned annually or more often to the same home or location. With promo codes, we could target users who are in the planning and consideration phase with a special offer that might encourage them to return and book directly with us.

• Customer loyalty and LTV - Promo codes could also be used to build customer loyalty and long term engagement. Promo codes were a powerful selling point to encourage users to sign up to receive our promotional marketing communications. Promo codes could also be used to nudge users toward behaviors that we knew were associated with lifetime value, including leaving reviews and downloading our app.

A previous team had built a legacy promotional system, where Marketing was able to generate URLs with encoded promotional codes to distribute in campaigns, but there were severe limitations with this system, including:

• Guests would be required to log in to redeem the promo, which meant we could only offer promos to guests with existing accounts

• Marketing could only set the promo value; otherwise there were no configuration or targeting options — the promo could be redeemed on any home over any date period.

Project: Promo Codes MVP

We determined that we would build a new promotions application to replace the legacy system. This would be an MVP that would meet Marketing’s minimal requirements and that my team would own and continue to iterate on in the future.

Requirements

Working closely in collaboration with Marketing to determine their use cases and needs, we agreed to the following requirements for a Promo Codes MVP:

As a Marketer creating and managing promotions:

• I am able to target units either directly via a list of IDs or by market/location

• I am able to exclude specific units from my targeted list

• I can configure a promo for a specific redemption value, either a raw amount or a percentage of the total rent value

• I can set date ranges within which a stay qualifies for a promotion (e.g. eligible on stays October-November 2024), and add specific day of week exclusions within that range (e.g. no weekends)

• I can set date ranges for when a promo can be redeemed (e.g. redeemable September 2024)

• I can set price ranges for which a stay is eligible for a discount (e.g. ‘must be >$200’).

• I can name a promo and specify the redemption code (which must be a unique value), and leave a comment/description for my peers

• I can set a redemption count maximum (e.g. only redeemable 500 times)

• I can see how a promo is performing, including the redemption count and total reservation value generated

• I can turn promos off or on with the touch of a button

• I can view a change log to see who made what updates to which promos

Implementation

Building out the Promo codes MVP would require three distinct areas of work:

• Promo Codes Service - A backend with APIs that work between the website, the Promo Manager, and our payment processor.

• Promo Manager Front End - The front-end of the tool Marketing would use to create/manage promo codes

• Promo Codes in Checkout - a new flow in checkout allowing guests to apply promotional codes