March 13, 2018
This interview is part of the Turbulence Interview Series, powered by Kantox and was previously published at Turbulence
About Brenda van Leeuwen: After studying Business Economics at Rotterdam’s Erasmus University, Brenda went on to spend 19 years at international electronics giant Philips, where she performed a variety of senior roles. Passionate about travel and making companies better, she joined Eurail.com as CEO in 2015.
Arturo: After almost 20 years at Philips, how did you wind up working in the travel industry and specifically as the CEO of Eurail?
Brenda van Leeuwen: To be really honest, I ended up in the travel industry by coincidence. I came into contact with the people at Eurail.com through word of mouth.
First and foremost, I was a bit surprised that I didn’t know the company because it sells Interrail Passes and I went Interrailing four times myself when I was a student. That was a beautiful experience that has stayed with me, so I was immediately excited by the chance to join Eurail.com, because it’s a product and service that I could really relate to.
It was a difficult decision to leave Philips because I had a fantastic time there and it’s always tough to leave something you know. However, Eurail.com was the perfect match: I love travel — and I get to travel extensively every year — and it fits into my professional ambitions and drive regarding change management, scaling up companies and looking to different business models.
You have a background in marketing too, don’t you?
I’m actually a very old-school marketeer. I studied Marketing and Marketing Management at the Erasmus University a fair few years back, so I was educated as a traditional marketeer. However, I had the opportunity to move into different areas while at Philips: I worked in HR, Recruitment, Learning and IT — I headed an IT department for Marketing and Sales –, and my last role was focused on digital transformation.
What is Eurail.com‘s business model and how do you think your company differentiates itself from its competitors?
Our business model is both very simple and very complex. Basically, we sell Interrail and Eurail train passes through which you can discover Europe. So, you can be in Paris one day, Milan the next day, then Hamburg and so on.
In my opinion, we don’t sell a means of transportation. Unlike a commuting service, it’s not about going from A to B; you go from A to B and then to C, D and X, and then maybe back to B, because we offer travellers the freedom to discover all the beauty we have in Europe, its history, food, beaches and more, in a very relaxed and flexible manner. I think that sets us apart from the competition.
Selling more than just a ticket is crucial to our business model and you can see that on our website, our blog and our newsletters. Our business is driven by generating an appetite for Europe as a whole and especially for exploring Europe by train, which is easier than going to and from different airports. We sell a product that is instrumental for travellers to have a great holiday and a great experience in Europe. Being part of that is something to be proud of.
That is our core business model, but we’ve also started adding several other services to make travellers feel even more at ease and fulfil their needs. Examples include seat reservations and additional insurance and accommodation packages.
That idea of an experience is illustrated by the fact that people will often say, ”I’m going to Interrail or Eurail’ rather than ‘I’m going to buy train tickets’.
Yes, exactly. People ‘do’ our product, which is really fantastic.
To what extent have you been able to leverage your previous experience driving digital transformation at Philips to adopt new technologies at Eurail?
That’s an important, yet difficult question because Eurail.com and Philips are quite different in many ways. Philips is a long-established brand that is well known in all sectors, with hundreds of employees and offices all over the world. Meanwhile, Eurail.com has only existed for 12 years and has 100 people and one location.
The similarity is that we are both originally Dutch companies and both operate in a changing international environment in which, whether you are big or small, you need to be resilient and ready for changes. That means having people and leadership in your organisation that can deal with that. That’s the similarity I see in transforming organisations and adapting them to new environments.
Sticking with technology, what role does travellers’ data play for you? How are you using insights from big data to impact decisions?
We are a data-led organisation and have several types of data, but that doesn’t include automated or real-time traveller data at present. This is simply due to the fact that, although we are an e-commerce company, our product is still a physical one: we print it and ship it to the customer. We hope to change that by making a digital product available on mobile devices. Which is a challenge and big operation, since we need to align the ticket inspection of more than 35 European train operators to make this happen.
For now, we ask customers to send us travel diaries, but only a few percent do so, so the data we have from that type of travel behaviour is relatively limited. We use it to define top destinations and ensure that we have enough relevant content on our website.
Perhaps more important is the data we collect based on how people behave on our website, what type of pass they buy or how they interact with our emails and social media channels. This says a lot about their expectations for the shopping experience and the information they are looking for, and is also used to determine changes we make on the website and the content we make available. In addition, we utilise that data to define what kind of additional services to launch and which partners to work with.
The Eurail pass is for people from outside Europe and Interrail is for European residents. You differentiate strongly around the two, including having separate websites, even though the product is similar. What’s the rationale behind this differentiation?
The Eurail and Interrail products can both appeal to different ‘personas’. Think, for instance, about backpackers, families or also seniors, for whom the train is quite a convenient way to explore. In other words, anybody in the world could potentially be interested in travelling by train in Europe, but not everybody is the same.
Two and half years ago, we started moving away from the concept of one size fits all. Through customer data and people’s buying process, we learnt about the differences between people in the US, for instance, and Japan or Europe. People have different preferences and needs, they speak a different language, which is why our sites are also multilingual, and they’re looking for different information — they have different reasons to buy and ways to be convinced. That’s why you see these differences.
We even want to enhance the differences to ensure that we provide the right information to the right traveller at the right moment and on the right platform, because besides our website, we also interact with our travellers through numerous social media channels and through our customer service agents. So, understanding the customer and acting on their different needs is quite fundamental for our future.
Given the product you sell and the different traveller profiles you mentioned, establishing strong partnerships across borders must be vital for your business. For example, you’re cooperating with Alibaba to offer rail tickets on the Chinese market. What’s your secret sauce for establishing powerful partnerships?
I can’t tell you that, or else it wouldn’t be a secret! [laughing] Seriously, though, I couldn’t pinpoint the exact recipe, but transparency, creating win-win situations and doing what’s right for the customer are instrumental. That’s our approach with all our partners, which include railway operators and, on the commercial side, the likes of Booking.com and Hostelworld.
It’s been quite a journey with Alibaba’s Alitrip, or Fliggy as it’s now called. Eurail.com started working with them back in 2015 and we learnt so much from our attempts to conquer China from Utrecht. We had Chinese-speaking employees and customer service agents, we had a little store on the Alibaba platform and we also sold — and still sell — tickets in Chinese via our own website. But we realised that just doing that wouldn’t fly, if you’ll excuse my use of that word in the railway context, because China is so different. For instance, Chinese customers expect reactions within seconds, not hours.
If you want to work with Alibaba, you need to understand how they do business. So, we completely changed the business model for China and now work together with a local partner, who do all the marketing and sales activity for us. They know exactly how Chinese customers read on websites, what they like and which images to use. They do our special campaigns, which are still managed in close cooperation with our office in Utrecht, of course, but it’s much more decentralised.
Many other companies we’ve spoken to have stated that the Chinese market is becoming increasingly relevant for them in revenue terms. Has that been the case for you on the back of your partnership with Alibaba?
Yes, absolutely, and that’s why we started working with them back in 2015. I also know about this importance in part because of my time at Philips. China is a mature market in some spaces, but is still emerging in others. You need to be there first, but you also need a long-term perspective; you can’t just try it for a couple of months and then go back, because it’s so dynamic and even more volatile than here.
The way Chinese people travel is also changing. They are very famous for travelling in groups, but because of changing economics and other circumstances, they are increasingly ready to explore the world on their own or with only two people, and to really plan trips themselves rather than doing something preorganised. This especially applies to Chinese youngsters living in the major tier-one cities. That means there’s a lot of business potential for us.
What is social media’s impact in driving sales for you? Is it a big source of customers?
Yes, social media is quite crucial for us in a couple of ways. First and foremost, from a customer service perspective. We started customer service with only email contact, but we saw that there was a lot of demand for us to be present on Facebook, Twitter, Weibo in China, and other platforms like WhatsApp, although it isn’t a social network per se. So, we’ve extended our social media presence quite substantially to help customers with their questions and interact with them. They also use them to start helping each other, which is great to see!
On the other hand, social media, especially Facebook and Instagram, are also quite important for us as a branding and marketing medium, where we post nice articles about Europe, create content for travellers and share information about our partnerships. Through social media, we can generate traffic to our website.
We are sponsored by Kantox, so we always ask a question regarding one of the major challenges for travel companies: currency management. How do you ensure that you earn stable margins on your tickets when you may be collecting in one currency and making payments in another?
Good question. We buy the product, the passes, from our railway carriers in euros, but we offer different currencies to some of our customers. And we manage our margin and the currency risk based on a strong hedging procedure and policy driven by the solid Financial department we have built over the years, and agreements with our bank, which takes care of these hedging procedures for us.
I have to say that I’m really proud of how we manage the financial risk from that perspective.
For example, do you offer Chinese customers the option to pay in yen?
Yes, we do offer the Chinese yen. We decide on whether or not to roll out a local currency based on the business potential and the risk from a hedging perspective. Every time we open up a new local currency, an impact analysis is conducted. We recently added the Swiss franc and the Korean won. We do it step by step, depending on the focus and the landscape.
Lastly, in general (and this is a question we’re asking all of our interviewees), what do you see as the biggest challenge facing the travel industry today?
In general, I’d say fast-changing customer preferences and market situations. They have a real impact: as I said before, organisations need to be adaptable and have an agile way of working to cope, especially if you’re small, because then you’re more vulnerable to changes.
I think another challenge involves the sustainability of tourism. I see a lot of issues related to that in Amsterdam — I don’t live there, but I live close by. There are more and more incoming tourists and the challenges associated with that include finding the right accommodation and the number of hotels this brings.
I think sustainability is essential. It’s great that people are travelling because the experience is great for their development, but there’s also a downside and I think there needs to be a balance. Maybe this will be partly solved by the fact that, while top destinations like Amsterdam or Paris will remain popular, you also see more and more travellers with specific needs, wanting to meet the locals, do off-the-beaten-track things and go to smaller, more ‘authentic’ places. Maybe this will help achieve more balance. Either way, I see sustainable tourism and changing market situations driven by customers and technology as major trends going forward