Flipkart Plus: Customer Loyalty Program by Flipkart

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Flipkart, the country’s biggest e-commerce company announced the launch of their loyalty program or customer benefits program (as they are calling it) on India’s Independence Day .

Launch Emailer

Here’s a quick summary of the program

  1. Opt-in membership with zero fee
  2. Free Expedited Shipping
  3. Exclusive access to promotional offers on Flipkart
  4. Reward points (coins) for purchases on Flipkart, which can be redeemed to buy offers on & off Flipkart (other vendors like Bookmyshow, Cafe Coffee Day)
  5. Superior & Priority Customer Support
Membership is just a click away

Flipkart Plus Landing Page

For an e-commerce company to become a sustainable business at scale, customer loyalty (aka retention) is a must. With increased competition and massive customer base, retention is the most obvious and un-avoidable path for all sizeable e-commerce companies, thus the recent public push towards launching loyalty programs.

Coming back to Flipkart, Flipkart Plus is their second attempt to launch a loyalty program. The first attempt was made in 2014.

Flipkart First (Launched in 2014)

‘Flipkart First’, ran for 2-3 years before the company quietly setting the sun on it. Since I was an active customer back then, I purchased ‘Flipkart First’ membership twice to avail the benefits. 

Here’s a quick overview of how the two programs compare with each other

Flipkart First Vs Flipkart Plus

Summarising the key changes:

1. Waving off Membership Fee 
2. No commitment over delivery time and charges
3. Adding early access to exclusive deals
4. Superior and Priority customer service
5. Introducing 3rd part offers and reward points

Let’s try to quickly unpack these changes

  1. Free Memberships:
    Positives — Increased Uptake
    Negatives — No additional revenue from membership fee

    IMO a loyalty program without membership fee is not reflective of brand power and will always restrict goodness you can provide.

  2. Free and Expedited Delivery:
    Positives — Increase in both order count (significant) and revenue (insignificant)
    Negatives — Extra shippings costs.

    Since membership is free and so is shipping, essentially users have no incentive to consolidate their orders and thus they can & will choose to place standalone order for low ticket items but will they spend significantly more because of this, I don’t think so.

  3. Early Access To Exclusive Deals (Actually just Exclusive Deals):
    Positives — Depends on quality of deals. Could lead to more orders & revenue
    Negatives — The deals on low ticket item products can put further pressure on shipping costs.

    The way I see it, I don’t expect great deals for Plus members. Let’s wait and watch on this.

  4. Superior & Priority Customer Service:
    Positives — Difficult to measure and communicate value to users. Negatives — If some changes are actually done at CRM, process and team levels. The costs for this could be significant.

    Unless a customer buys extremely regularly and interacts with CS often they can’t really see the difference. Even if the experience is better, I’d actually prefer to not having to talk to CS at all.

    Also, I’d never want customers to feel they are treated unequally. So generally speaking, I don’t like this feature.

  5. 3rd Party Offers and Reward Points:
    Positives — Additional benefit to customers, should bring some additional revenue from 3rd party. 
    Negatives — The offers currently are unpleasantly few and the usage terms are not friendly (to the point of discouraging impulse use).

    Giving formulaic reward points for purchases in form of coins could have been good had they allowed people to redeem them while shopping (think Paytm Cash) but in the current form, users can redeem coins to buy offers on 3rd party or Flipkart. First option currently is un-exciting and second one involves fair amount of friction
Expect a lot of low ticket orders like these

Unfriendly Terms: Of course I will remember all this two days in advance

Redeeming Rewards: 50 Coin Offers

50 Coin Offers 

Rs 250 earns you 1 Coin, so you need to spend Rs 12,500 to earn 50 coins. 
There’s also a catch, you can’t earn more than 10 coins in an order. So in effect, a user need to place multiple orders (5 big orders or 50 small ones) of Rs 250 or more to accumulate 50 coins.

Once a user has spend Rs 12,500 they are eligible for these offers 
– Rs 1000 worth free Flipkart Voucher (8% cashback)
– Rs 1200 worth BMS voucher or Rs 1900 worth Zomato Gold.

These offers are definitely interesting for regular customers as they get all these benefits for free.

Would people spend more often on Flipkart or move to Flipkart because of these benefits (more offers to come) would be interesting to see.





E-commerce Customer Lifecycle Management: Metrics and Goals

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This is second part in a series of posts on ecommerce customer lifecycle management. In the first part we discussed an overview of CLM and in this post we’ll discuss how to identify, measure relevant customer lifecycle metrics and define goals to improve them.

Basic E-commerce Customer Lifecycle.

Pic 1: E-commerce Customer Lifecycle (Basic)

To improve progression of users through the lifecycle we will look at the corresponding funnel as funnels are great to measure stage wise conversion

Pic 2: Customer Funnel (Basic)

Quick Definitions

  1. Total Users: Users with email id/phone number/apn or gcm id.
  2. Total Customers: Users that have ordered at least once.
  3. Total Repeat Customers: Customers that have ordered more than once.
  4. Total Loyal Customers: Customers that have ordered more than Z times.

We’ve mapped the lifecycle into these four basic funnel stages because they represent a user action based milestone. This grouping of users is important because users in each stage share a lot of similarities in their experiences(or lack of) with the product and the kind of nudges required to help them move to the next stage.

Spray and Pray is not a Strategy

A mistake most marketers tend to make is to send the same communication to all users. It’s wrong to assume that the same communication will work for both ‘Non Purchasers’ and ‘Repeat Customers’.

Identifying Key Customer Lifecycle Metrics

The key metrics to be used have to be leading (or input) metrics i.e they are influenceable or directly actionable. In this case, the relevant metrics are the conversion rates from one stage to another. Let’s take some sample data

                           Pic 3: Overview of Customer Funnel

At a high level, this table above tells you all there is know about the business and the levers to improve things are the conversion rates that correspond to each stage.

                                        Retention is poorly understood

Key CLM Metrics aka E-commerce Vitals:

                                     Pic 4: Key CLM Metrics
  1. User Activation Rate
    = (Total Customers /Total Users) * 100
  2. Repeat Customer Rate
    = (Total Repeat Customers/Total Customers) * 100
  3. Loyal Customer Rate
    = (Total Loyal Customers/Total Repeat Customers) * 100

Loyal Customers = Users * Activation Rate * Repeat Rate * Loyal Rate

                                   CLM Metrics are Ecommerce Vitals

These Key CLM Metrics are E-commerce equivalent to the human body vitals.

As a growth guy, I lay extreme emphasis on these CLM metrics because they help me understand the current state of things and point towards directions that need the most work.

             Pic 5: Each Metric Tells A Story and Suggests A Direction to Work On

Defining Customer Lifecycle Management (CLM) Goals

With these three metrics identified, the task ahead is clear

Customer acquisition is just half the battle won.

                   Pic 6: Overview of Customer Data and Key Metrics

There can be 3 broad goals for improvement from here

  1. Increase User Activation Rate (Biggest Improvement Area) — An improvement by 5% here will translate into 20% increase across Customers, Repeat Customers and Loyal Customers
          Pic 7: User Activation Rate — The biggest lever of retention

Since User Activation Rate impacts the top of the customer funnel and a small improvement here will have the maximum impact in both customer count and revenue, it is paramount to improve it ASAP.

                  It’s important to fix User Activation Rate at the earliest

2. Increase Repeat Customer Rate (Toughest Improvement Area) — This is the second biggest improvement area. An improvement by 5% here will translate into 20% increase in both Repeat & Loyal Customers

       Pic 8: Repeat Customer Rate — The second lever of retention

If there are a lot of folks who are placing orders but aren’t coming back to buy again this could be a serious problem. This metric needs to be looked from multiple perspectives — Product Quality, Post Purchase Experience, Post Purchase Communication and such.

3. Increase Loyal Customer Rate (Easiest Improvement Area) — An improvement by 5% here will translate into 25% increase in Loyal Customers.

           Pic 9: Loyal Customer Rate — The third lever of retention

In my experience I’ve found this metric easier to influence than the repeat rate. Customers that have made multiple purchases are comparatively easier to retain & re-activate. You also have the most behavioural data about them.

Here’s a quick summary showing the impact of a 5% improvement in each key metric on One Time Purchasers, Repeat Customers and Loyal Customers.

Pic 10: Impact of a 5% improvement in each metric on Customers, Repeat Customers & Loyal Customers

The table above summarises the impact pretty neatly. In case, this is looking exciting, let me add to the excitement by showing you the improved numbers in a case where you are able to increase each key CLM metric by just 5%.

      Pic 11: Impact of 5% improvement across all three Key CLM metrics

Not only the % of people in each lifecycle stage looks quite better, the increase in loyal customers by 80% is fantastic

With these three broad CLM goals defined and projections explored, we have a task cut out for the marketing/growth team to make plans around.

In this post we’ve focused on identifying the Key CLM Metrics and Defining CLM Goals. In the next post in this series we’ll discuss some strategies to achieve these goals.

If this is the first post you are reading in this series, there’s a prequel to this post on introduction to Ecommerce Customer Lifecycle Management here

Thanks Navneet Singh and Saurabh Tuteja for their feedback

E-commerce Customer Lifecycle Management (CLM): An Introduction

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This is the first part of a series of posts on e-commerce customer lifecycle management. In this post we’ll discuss an overview of CLM (The What & Why) and it should be useful for a marketing/growth person in designing their CLM strategy

A few things to note:

  • Analysing data only makes sense once you have a sizeable amount of it.
  • In this post we are only covering user and customer engagement.We will cover visitor data in a separate post
  • For sake of simplicity in this post we are only looking at linear movement across different lifecycle stages.

There are a lot of lenses to look at e-commerce customer behaviour data from but Customer Lifecycle Management(CLM) is at the core of it all. I believe CLM is the fundamental element that needs to be in place for you to drive good ROI on your marketing or growth efforts. Once you have a defined CLM framework, you can start focusing on other aspects. Let’s dig a little deeper


What is Customer Lifecycle Management?
Customer lifecycle is a term used to describe the progression of steps a customer goes through when considering, purchasing, using, and maintaining loyalty to a product or service.

Customer Lifecycle Management (CLM) is a framework to facilitate a smooth movement of users(non-purchasers) from acquisition towards loyalty (repeat active customers) by maximising the value delivered at each customer engagement touchpoint and removing all friction in conversion

                                    Pic 1: E-Commerce users’ Journeys

 

Why is it important to manage Customer’s Lifecycle?

  1. With limited customer acquisition channels, the customer acquisition costs will continue to rise unabated
  2. It is much easier to convert and retain an existing customer than to acquire a new one
  3. A happy customer will not only purchase more, they will also spread the word for you and bring additional customers.

Or put it other way,

“You can’t build a sustainable e-commerce business without repeat customers”

The Scope of Customer Lifecycle Management

Let’s briefly discuss what all does a CLM framework entail. We can divide the scope of work for CLM into the following

  1. Defining lifecycle stages, identifying relevant metrics and data
  2. Conceptualising categories of customer communication to nudge users from one lifecycle stage to the next
  3. Designing campaigns and creating content for categories defined above
  4. Executing various CLM campaigns and iterating on them to improve their efficacy.

Designing The Customer Lifecycle

While there’s no standard way to define a customer lifecycle for an e-commerce/transactional business, in my experience I’ve found this flow to do the job well.

                                           Pic 2: Customer Lifecycle (Basic)

This basic version of customer lifecycle is useful to get a high level overview and is easy to get started with.

                                        Pic 3: Customer Lifecycle (Advanced)

For the mature growth/marketing person, this advanced version of lifecycle will be beneficial. The advanced lifecycle is particularly beneficial for mid to large sized businesses.

I find this representation useful because it gives a more in-depth view of what exactly is happening in each lifecycle stage (Pic1). Also, by splitting various lifecycle stages by their purchase activity you get a better sense of how many customers are active, at risk of getting churned and have already churned.

Defining Lifecycle Stages
Before we jump to the metric, let’s quickly understand what each stage means.

                                     Pic 4: Definition of Various Lifecycle Stages

In this content, a couple key definitions one must understand are

  1. Risk Window — Number of days for which if a customer doesn’t purchase they are at risk of churning (X days).
  2. Churn Window — Number of days for which if a customer doesn’t purchase they are churned (Y days).

A churned customer is one who hasn’t purchased for long enough that we can consider them to be lost.

Repeat and Loyal Customers
There isn’t a definite way to define repeat and loyal customers. For sake of simplicity, I’ve defined repeat customer as anyone who has placed more than one order. Similarly, Loyal customers can be defined in multiple ways (orders/revenue etc) but I’ve defined them on the basis of number of orders (Z orders).

Depending on the nature of business, you can decide values for X,Y and Z

With the Customer Lifecycle in place, we now have to define our goals and make plans to achieve them. We’ll cover those in the remaining parts of the series.

Update: You can view the part two of the series in which we cover CLM Metrics and Goals here

Thanks Navneet Singh & Nitish Varma for reading the drafts.

Notes from “Zero To One” or Peter Thiel For Beginners

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Two years after purchasing I finally decided to give “Zero to One” a read & totally loved it.

About four years back I came across Blakemaster’s notes from Theil’s Stanford class and was totally blown away. A lot of the content in the book is from these notes.

Sharing some things from the book that stood out for me

Zero To One:
For the uninitiated, loosely speaking creating new technologies/ways of doing things is “0 to 1” and just replicating what works/doing incremental improvements is “1 to N”.

In a world where technology creates an extreme leverage, it is much better to do “0 to 1” than “1 to N”. The “Zero to one” approach helps you in thinking bold and trying to solve bigger/non trivial problems. Successfully solving hard problems in most cases can lead to supersized returns.

Brilliant thinking is rare, but courage is in even shorter supply than genius.

Contrarian Thinking:
You get outsized returns for being right when the consensus is opposite to your thinking. The suggested way to get there is to
a) Think for yourself — Independent thinking over opposing the crowd (just to be contrarian)
b) Question what you know — Especially question what you know about the past and if you are not reacting mistakenly about the past

Secrets and Business:
Being contrarian in business is akin to uncovering a secret. Secrets(difficult to figure out) are different from Mysteries(impossible to figure out).

Great companies can be built on open but unsuspected secrets about how the world works.

Very few people take unorthodox ideas seriously today, and the mainstream sees that as a sign of progress.We have given up our sense of wonder at secrets left to be discovered.

You can’t find secrets without looking for them. Belief in secrets is an effective truth. The actual truth is that there are many more secrets left to find, but they will yield only to relentless searchers.

Great companies have secrets: specific reasons for success that other people don’t see.

Competition Is For Losers:

Competition and Capitalism are opposites.
Competition can make people hallucinate opportunities where none exist.

People tend to think competition is good but as per Thiel, competition is a destructive force and not a sign of value. When it comes to competitive environments, people tend to lose sight of what matters & focus on their rivals instead.

While competition might be good for consumers/supplies it definitely isn’t the best for the competing players. Monopoly businesses on the other hand (except when they purely act as rent collectors) by virtue of having higher margins/profits can afford to plan for long term and drive progress by innovation.

Who is likely to innovate more? Amazon/Google or say Lenovo/HP (PC space)

Making A Monopoly:

Only one thing can allow a business to transcend the daily brute struggle for survival: monopoly profits

Every monopoly is unique, but they usually share some combination of the following characteristics:

a) Proprietary Technology
b) Network Effects
c) Economies of Scale
d) Branding

Brand, scale, network effects, and technology in some combination define a monopoly; but to get them to work, you need to choose your market carefully and expand deliberately. Proprietary Technology can lead to the strongest form of Monopoly while Brands are the weakest form of monopoly and only work well for long in a few cases such as Pepsi & Coke.

If your company can be summed up by its opposition to already existing firms, it can’t be completely new and it’s probably not going to become a monopoly (Think of a 10X better product/technology)

Running Startup as a Cult: While the popular answers to the question “What would the ideal company culture look like?” could include perks such as Foosball/TT tables, mac for everyone, open work hours etc Thiel calls them out for NOT being substance. What matters is

The opportunity to do irreplaceable work on a unique problem alongside great people.

Some commandments from Thiel in this regard include
a) Hire people who are talented, but even more than that they should be excited about working specifically with you.
b) You’ll attract the employees you need if you can explain why your mission is compelling.
c) Everyone should have a shared understanding of the world and your company’s intended position in it.
d) Defining roles reduces conflict. Everyone is responsible about one thing and everyone else knows about that one thing.

A Framework For The Future: Thiel offers an interesting lens to look at the future.

An indefinite pessimist looks out onto a bleak future, but she has no idea what to do about it.
A definite pessimist believes the future can be known, but since it will be bleak, she must prepare for it.
To a definite optimist, the future will be better than the present if she plans and works to make it better.
To an indefinite optimist, the future will be better, but she doesn’t know how exactly, so she won’t make any specific plans. She expects to profit from the future but sees no reason to design it correctly.

We cannot take for granted that the future will be better, and that means we need to work to create it today.

Thanks to Saloni, Navneet for reading the drafts

Startup Jobs

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I’ve got tons of friends/acquaintances who are running startup and the only thing common to each one of them is that they are looking to hire smart talent. Despite 100 job sites, a lot of match making takes forever. Here’s a little effort from my side to fill this gap.

Running a startup? Looking to hire people? Share Job details (140 character), company name and contact email id at (dhingra dot mayank at gmail dot com)

Technology 

Marketing

Sales

Account Management

HR

Others

Books I read in 2015

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Here’s a list of all the books I read in 2015. If you’ve read any of them or would like to recommend some books to me drop a comment below

Jan 2015

    1. The Power of Habit: Why we do what we do and how to change (Rating: 4/5)

 

A very interesting read on how to recognise habits, how they are formed and how to amend them. Great way to understand personal as well as institutional/organisational habits. It has suggests some experiments to cut down addictions like Smoking

2. How football explains the world (Rating: 3.5/5)

A good primer for anyone interested in knowing about Football and Globalisation across different countries and continents. Football fans would find it interesting how various clubs across the world came into being and how violence b/w fans accompanied many of them. Non football or globalisation fans might not find it that great.

April 2015

3. Heart of Darkness (Rating: 3.5/5)

May 2015

4. Dogfight: How Apple and Google Went to War and Started a Revolution (Rating: 2.5/5)

 

 

15 Best Articles on Product Design & Product Management

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Want to become a PM or get better at it? This list of some of the best articles on Product design/management is a great way to onboard yourself (or your team members) on PMship

Articles:

1) The end of apps as we know them #intercom.io
2) How to do a Product Critique – Julie Zhuo #facebook #medium
3) The making of tiiny
4) Stop making users explore #medium #lauraklein
5) Super Normal: Innovation often starts with the ordinary #medium
6) How to Build Products Users Love – #howtostartastartup #video
7) So you want to manage a product? What no one tells you about the role
8) Product Strategy Means Saying No – Intercom.io
9) This Product Prioritization System Nabbed Pandora 70 Million Monthly Users with Just 40 Engineers
10) How Spotify builds products – Spotify
11) Twitter Will Onboard Users With “Instant Timeline”, Inject Top Tweets From “While You Were Away”
12) Chinese Mobile App UI Trends
13) The only metric that matters
14) Good Product Manager/Bad Product Manager
15) Why mobile unbundling isn’t inevitable

 

 

 

Myntra’s End of Reason Sale in 7 images

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# 1: A week or so back

The Build Up

YT ads promoting the sale
#2 Midnight on the day of sale

Midnight of Offer DayAs per Myntra’s twitter account, they were updating the offers

 

#3 Morning of the day of sale

Morning of the day of sale

Front double page ad on HT Delhi

#4 Minutes after the sale begins

Minutes after the sale began

 

Push notification to their app base (along with emails and sms)
#5 Few hours into the sale

Few hours into the sale

User Accounts (some say IPs) on both app and web were blocked for 30 minutes from making any request to the site

#6 Less than 12 hours into the sale

12 hours into the sale

 

 

#7 A little over 12 hours

end_myntra7

If the sequential order numbers of Myntra is anything to go by, the order id increased by over 1L  in the first 2 hours of the sale.

Time – 9:42 AM, Order id: 70303245

Time – 11:42 AM Order id: 70425987

Run rate: 60k orders/hour (16.67 orders/sec)