Yes, virtual reality can lead to ROI – YouVisit shares their business model

SUMMARY:

At Collision 2016, I had another run-in with virtual reality tech, courtesy YouVisit. This time, it worked out differently. It was more intense, but also much more practical. Here’s what happened.

youvisit-booth-vrI’m not what you’d call a virtual reality fanboy. But at Collision 2016, when YouVisit promised me a business-focused talk about virtual reality (VR), I took them up on it. Turns out, there were surprises in store for me.

My tour guide was Suzanne Sanders, YouVisit Director of Marketing. She told me about how YouVisit started with virtual college tours.

And that’s one clue to YouVisit’s approach: forget about whizz-bang VR; focus on practical needs. In this case, visiting colleges is cost-prohibitive for many due to location or budget. That was the thinking of YouVisit co-founders Endri Tolka, Taher Baderkhan, and Abi Mandelbaum, who luanched the company in 2009.

As Mandelbaum told the Miami Herald, “We had friends that ended up at colleges that weren’t the right fit for them.” Enter virtual tours. In 2012, YouVisit took its “Virtual Guided Walking Tour” tech to other industries. Popular industries now include education, travel and leisure, hospitality and real estate. From music festivals to luxury resort tours, YouVisit is finding use cases.

At Collision, Sanders discussed projects that ranged from Microsoft to Rio Tinto Mining Company:

Rio Tinto wanted to get rid of their visitor center, so we replaced their visitor center with a VR experience of their mine operations.

jon-reed-virtual-reality-goggles
Yours truly

For now, Sanders acknowledges that YouVisit’s best fit is for one-to-one sales. Equipment is one obstacle. But as VR headsets and gear become more common, Sanders thinks the experience of the web itself will change, laying the groundwork for more advanced applications.

For my part, I donned the headset and was treated to a surprisingly real dance performance on top of a rooftop, with 360 views I was able to control (I resisted asking Sanders for the dancer’s phone number). The experience was more intense than I expected. Sanders, who could tell I was a bit unnerved, said to me:

That just shows you how close somebody can get, how it feels, that presence – you feel that presence in VR. We’ve done some experiences you can do travel-wise that make you feel like you’re really experiencing it for yourself.

The missing piece was interactive – I wasn’t able to interact with anything in the VR demo environment. YouVisit is working on that now. Sanders gave the example of a someone planning a trip to Houston. The virtual tour could include different choices based on your interests. Don’t like museums? Tour restaurants or music venues instead. Fashion shows are another scenario: like the dress on the catwalk? Click on it to explore that fashion line and see it modeled in depth.

Virtual reality and that pesky ROI question

So what about that pesky ROI question? Sanders told me the colleges who use their virtual tours have seen a thirty percent increase in physical visit requests. Over all of their use cases, there is 12.3 percent conversion rate. YouVisit also measures “engagement,” which is based on duration of use. 10.4 minutes of engagement is the current average. That’s from a pretty broad base of the 1,000 tours YouVisit has built to date (their customer count is a bit less than 1,000, as some customers have multiple tours). YouVisit now has around 100 employees; Sanders’ team has tripled in size in the last year.

youvisit-virtual-reality
YouVisit’s Sanders and Turino

Just as we were discussing the ROI question, Sales and Partners Director Mike Turino bounded towards us. Like any salesperson who is passionate about their wares, Turino was loaded for bear. He took the ROI question head-on:

We’re known as being the virtual reality company to figure out ROI for enterprise clients. We have a lot of use cases from Microsoft’s facility in India, to Cisco Systems’ threat intelligence ecosystem that they use on their face to face meetings; Everyone uses it for trade shows. We have situations like Red Roof Inn, Visit Houston, Mercedes-Benz – they’re all there.

Turino doesn’t think much of virtual reality fancy talk. He’s focused on business results:

Our clients are not clients that are just creating content because they’ve got a big budget and they want to show something off; our clients are coming to us because they need to fill an ROI. That’s why we’re pretty successful with them.

Then Turino hit the ROI point home, explaining that YouVisit’s deal structure makes them accountable:

A lot of companies take a 360 degree camera, mount it somewhere, and say “We can do VR.” We’re not that company… Our model that holds us accountable every year to show an ROI. No one does that. That means when someone signs up with us, we’re telling them, “You have no obligations to renew next year; we have to show you the ROI.”

Turino says prospects are surprised by that message, and cited a 90 percent customer retention rate.

Looking ahead – can VR go mainstream?

I asked Sanders which VR use cases she anticipates. She says YouVisit is working on one-to-one capabilities, or the ability to “be with the person” in a virtual setting. This has potential for numerous scenarios, from celebrity encounters to executive interviews. She’s also interesting in “brand activation,” and using VR to improve the customer experience. Clothes shopping, to name one chore many of us dread:

I would love personally to be able to try on clothes from home, because I don’t like shopping… I’m a mom, and I hate shopping, so I’m slowly increasing my digital buying behavior, but there’s clothes I have to try on. Imagine if I could try it on with VR, and really see it on my body. I think some people are concerned about the touch. I’m not as concerned, but it would be nice to touch, and people are building out that technology.

Sanders thinks that VR is the next web platform (after mobile). But to get there, we’ve got equipment issues. She’s optimistic, pointing to the brands that are starting to send out headsets (e.g. the New York Times sending out Google cardboard headsets to its print subscribers). Sanders sees a potent example in SCAD (Savannah College of Art and Design), which sent out 5,000 VR headsets to accepted students. At a SCAD event, Sanders heard firsthand about how the VR goggles made a huge impression:

A lot of parents said, “This sealed the deal. I’m sending my kid here, because they’re forward thinking. This was an amazing innovative piece of … ”

Sanders says you’re giving them an experience, or to put it more vividly, a memory:

It’s the ultimate leave-behind; it’s the ultimate mail piece. It’s a new experience. A lot of the students were like, “This is the coolest thing a college has ever sent to me.” The first, second, third time you’re interacting with such an interesting immersive experience, it’s in your memory for good. Instead of cost per impressions, we call it cost per memory.

My take

I’ve put on VR goggles before and left unimpressed. This time, the images linger. If nothing else, YouVisit gave me a memory I wasn’t planning on.

In the wake of so many virtual reality failures, YouVisit’s success is not surprising. Though they may be dreamy about VR possibilities, their practical use cases are, well, ruthlessly practical. And I get the sense they are rigorously customer-focused, which never hurts your chances.

When I asked Sanders about why YouVisit impacts conversion rates, she pointed out it’s classic marketing analytics: test, analyze, and course correct. YouVisit provides their customers with an analytics platform to do just that. As Sanders says: “It’s all about where you’re putting the content, how available you’re making it to the person who’s really interested in finding out more, how they use in their marketing efforts. It’s just marketing best practices.”

I’m not sure if virtual reality will become the next web platform. But fast forward a generation, and I could see people putting in some type of VR contact lenses and using them throughout the day. But that’s not today. Today we’re dealing with goggles and ROI questions.

If anything has a chance to decrease business travel, it’s VR. Video conferencing has had limited impact on travel reductions. From what I saw this week, VR could soon offer a far more realistic means of interaction, something much more personal. Even jugular – and let’s face it, we don’t crave bland experiences, we crave jugular ones. That use case isn’t science fiction, so we’ll see. In the meantime, YouVisit tours on.

Image credit - On-site photos by Jon Reed.

Disclosure - Collision provided me with a complimentary media pass to the show; I covered travel expenses.