COD or Cash on Delivery as we now know it wasn’t no where near its popularity today a few years back. Today quite a few people (who call us at dialabook and otherwise) know and talk about Cash upon Delivery as a concept (books milne ke baad paise de sakte hain?) if not the exact term. COD as we know has taken the entire e-commerce Industry(if we can call it) by a storm.

To give you some perspective, about 2 years back when we(@dialabook) started collecting payment for books on delivery, we had no idea about this term and no notable e-commerce site had this option. Fast forward it to today and almost all e-commerce sites(and a few others like the one below) accept(or rather promote) COD to lure more customers.

While COD as a concept has been there for ages under the name VPP (Value Payable Post) by India Post. Here’s how their website defines VPP

The value payable system is designed to meet the requirements of persons who wish to pay for articles sent to them at the time of receipt of the articles or of the bills or railway receipts relating to them, and also to meet the requirements of traders and others who wish to recover, through the agency of the Post Office the value of article supplied by them.

Govt VPP however seems to have an upper limit of Rs 5000/-, which means you can’t send goods worth more than 5k through them.

Not just VPP, some courier companies in India have been supporting COD since March 2009 at least. Though some  startups like @dialabook might have been offering COD locally before, the big shift happened in April 2010 when country’s leading e-commerce player Flipkart introduced COD in April 2010 with a cash limit of Rs 2500/-, followed eight months later by Infibeam (FYI: Indiaplaza announced COD on 25th March 2010, a few days ahead of Flipkart ). It is also worth noting that some services like travelguru.com were offering COD option at least 2 years before e-commerce companies started adopting it. Seeing its success elsewhere, online travel portals yatra and Ezeego1 also launched COD in year 2011

As it turns out India isn’t the only breeding ground for COD. China,Russia etc have been a witness to the popularity of COD for long.

Going by the stats in India, as much as 60% customers of top 5 e-commerce sites in India use the option of paying by cash on delivery (COD) and many of these sites have credited COD  for fueling their rapid growth. While COD for obvious reasons makes a lot of sense for Indian customers and definitely opens a new market (students etc) to e-commerce it isn’t exactly what the doc prescribed or should prescribe. Here are some of the things wrong with COD

1. Cost: Nearly all courier companies charge extra for collecting cash. This cost is divided in two parts
   Fixed Cost: Rs 20-150/- ;  Variable Cost: 1-3% of the COD Amount. (This is mostly for high price items like mobile phones, laptops etc). If the item is priced low then the COD charges at times exceed one’s margin in the product and if the item is priced very high then the % COD charge turns out to be in hundreds or even thousands
2. Delay in payment: Unlike credit card transactions, COD payment generally takes 1-2 weeks or more to be transferred to your account. This bites your cash flow especially as the COD amounts start becoming huge.
3. Delay in deliveries: On an average COD deliveries are delayed by 12-36 hours when compared to normal deliveries. The reasons for the same are mostly non-availability of customer or cash and many a times both. Here unlike regular deliveries the parcel can’t be dropped to a neighbors place
4. Higher Returns/Cancellations: Since the customer hasn’t paid in advance, they can always cancel/refuse to take the delivery and sight reasons like I found this phone cheaper locally and have bought it from there or I have changed my mind, will buy a new laptop later
5. Overheads: Collecting the cash, collating the receipts and maintaining records et all is a nightmare

With increasingly every online business offering it despite its disadvantages(to retailers) the situation might just go out of hand and turn into a death spiral (at least for some non/less funded businesses that rely heavily on their internal cash flows). Small startups are the ones that should be really concerned about these issues instead of blindly aping others and starting COD.

With time as the e-commerce market in India matures, there *might* be more trust in established mechanisms of swiping cards for paying and some people will get over the liking for COD and prefer pre-payments. But, given the case in China, Russia etc it looks like unless the e-commerce majors deliberately start demoting COD and promoting other payment options we just might replicate what’s happening elsewhere i.e 60-85% people using e-commerce sites paying by COD.

Some ways around COD

1. Multiple Payment Options (at least 5-6)
2. Pre-payment methods (like wallets, cards)
3. Mobile banking and SMS payments
4. Card on Delivery
5. Giving incentives to users for choosing online payment against COD
6. Alternative payment methods such as paypal etc

While COD is a good option to have in some cases its double edged sword which should be used with a lot of caution and foresight. What do you think?

This post is partly meant to be a rant and partly to share what I feel. Feel free to agree/disagree.

In middle of a telephonic conversation with a friend(web entrepreneur) I popped a question,

Did you see Indian e-commerce stores putting up phone numbers on their website/product pages to help people buy (read order) products?

Gladly, as expected he replied with a “NO” which brings me to the question if/why/how do things change in the startup/business world with new things being introduced and then blatantly reused (copied) by others.

When we started Dial-a-Book some 1.5 years back, we were the ONLY ones that took orders on phone and accepted Cash on Delivery(COD).  Yes, none of the existing players had anything remotely similar in their way of working.

Come 2011: The two biggest e-commerce players in India have started COD (about 6-8 months back for one and  2-3 months back for another) and now they also have put phone numbers on their portals to take orders.  Surprising? Hardly.

Wait for a couple months and you’ll see almost everyone following steps. In fact I remember one of the young and aspiring e-commerce startups went to the extend of launching a service similar to ‘Dial-a-Book‘ and branding it as “X.com’s Dial-a-Book”, Duh.

I don’t mean to say we are the inspiration behind these but definitely the uncanny resemblances are a bit too much for them to be completely independent in thinking and execution. I know it might be really difficult to acknowledge but that’s how it is. The idea of sharing this here was that I felt like putting it done of paper/web for records.

Copying a feature or idea is one thing and doing justice to it is completely different. The most painful part of it being the big guys almost always get the credit for doing new things which aren’t really new.

It will be interesting to see how things change going forward with the e-commerce scene also extending to the phone commerce scene. Stay Tuned !!

It’s been a long time since I scribbled something here but hopefully things will be better in the coming few days.

Anyways, here’s an excerpt from  my email interview with YourStory.in, hope you like it

When was the last time you went to the neighbourhood book store? The chances are, you can’t recollect readily. Gone are the days when buying books involved a visit to the trusty book store round the corner. Online book stores, with a practically unlimited collection and simple search mechanisms, have sprouted by the dozen and the good bit is, all of them are seeing patronage. We at YourStory recently caught up with entrepreneur Mayank Dhingra, the co-founder of Dial-a-Book, who promises to make book buying even simpler. In this exclusive chat with YourStory, he speaks about his startup and how he intends to create a community of book-lovers.

If someone asked you to tell them about Dial-a-Book in about three sentences, what would you say?

Started with the aim of simplifying the process of buying books, Dial-a-Book is India’s first service that lets you order all kinds of books and novels over the phone. We offer free home delivery across India and accept payment by cash upon delivery.

How is Dial-a-Book different from other online bookstore models?

While online bookstores let you order books only on their site, Dial-a-Book allows you to order books over phone, SMS, email, and even Twitter or Facebook. You can even order the books that are not listed in our database but are otherwise available. We accept cash upon delivery and have our own delivery team for the Delhi/NCR region. And most importantly, we just don’t sell books. We are working towards building a community of avid book lovers.

How did the business idea for Dial-a-Book come about?

I have been an avid reader since my college days. I had always thought of doing something with books at some point of time. The advent of the online bookstore concept in India intrigued me and I spent some time observing various online bookstores, their way of working and other variables. I also used to observe how people shop for other things like medicines, groceries, food etc. It was during this time that I realized that the process of buying books can be further simplified and made more user-friendly, just like ordering burgers or pizzas. And hence, Dial-a-Book was born

Tell us about your background.

I did my Electronics & Communications engineering from Delhi College of Engineering (2005 batch). Towards the end of my college stint, I started toying with the idea of staring my own business. I joined Fidelity Investments as a campus recruit and worked there for one and a half years, building software for internal use.

From Fidelity, I joined Slideshare where I worked on various features of the website and some back-end technologies. In Slideshare, two friends of mine and I started an online platform called Kwippy. Kwippy started as a status message aggregator and got a lot of traction in both Indian and international online media.

After working at Slideshare for a year, I left the organization and joined MPower Mobile. I worked there for a year and quit to start something of my own. That’s when Dial-a-Book happened.

Let us know about the tie-ups that you have. Is there acceptance for your concept?

We’ve tied up with most local distributors based out of Delhi along with a few small to medium-sized publishers and we regularly procure books from them. We did a trial run before starting the service and based on the feedback, we decided to venture into the business. We’ve sold books in almost all of the 27 cities where we have Cash on Delivery (COD) and a few other places as well. A lot of our customers regularly buy their books from us and many of them recommend us to their friends and family.

Where do you see online book buying and Dial-a-Book five years from now?

Five years from now, a significant percentage of books sold in India will be sold online and over the phone. In five years, we see ourselves as the number one player in the ‘over the phone’ category and amongst the top 5 in the online space. Currently, there are a number of guys vying for a piece of the pie(online). But my view is that the next few years will see a lot of consolidation in this space and the market will have just a handful of players who will do a majority of the business.

In the next five years, Dial-a-Book will tie-up with more publishers, expand to other cities, explore other/faster modes of delivery, work more closely with authors and build a passionate community of book lovers. We have a lot of interesting ideas for the business which we’ll put to test soon.

This is an excerpt, you can read the complete story here: http://bit.ly/i1wdfV

Here’s a post I recently wrote for Shack’s blog.

I’ve been into the business of building web applications for a good part of my professional career. During this period(around 3.5 years) I’ve worked for a MNC, two start-ups and also started two companies on my own. A couple days back while thinking about some business it dawned upon  that there are basically two types of businesses (guess you probably know this already) as far as my view point is concerned (Otherwise trading is also a business). If you are not working for someone else (basically a job) and doing your own thing you are either

1. Building a product (A website, a facebook app or something else for Ex: Kwippy)
2. Providing a service ( Social Media Marketing, Website design/development, SEO or something else for ex: Dial-a-Book)
3. Mix of both (for ex: Shack Companis)

These two kinds of businesses (product and service) have almost equal scope when it comes to growing big, becoming popular etc. However what’s interesting is what it takes to get them to that level. I’ve been on both sides of the line that separates a  product business and a services business. I’ve build a product and am now building a service . Kwippy and Dial-a-Book are as different a business as they can get. While Kwippy was all about building a web product from India that had a global appeal, Dial-a-Book is a over the phone service that’s aimed at the local/domestic market(for now at least).

If you think about it product and service based businesses require way different inputs and take way different life forms once they start to grow. I’ll attempt to explore those differences and what we can do to leverage/optimize them

Product Vs Service Based Businesses:

1) Starting Capital: Product based businesses on an average require more capital to startup than the service based businesses due to the raw material and infrastructure needed. While web products don’t require as much starting capital, services will more often than not be relatively cheaper

2) R&D: Irrespective of the line/domain in which you are building a product, you’ll need to spend considerable amount of time as a team or as an individual to understand what’s been done before, what’s not been done, latest technologies involved, costs, maintenance and other issues. While (most) service based businesses don’t need to think as much(it’s a plus if they do) before starting up.

3) Time to go Live: Product based businesses by their sheer nature will take longer time to go live as compared to almost no-time to launch for a service based business. Essentially a service based business is live from the minute the founder(s) decide to start.

4) Business Development/Marketing: How good a services based business will do depends significantly on the founders interpersonal/selling skills the same gets tough for a product based business. For a product based business you need to have the product right, you need to make it easy to find and spread(viral) and market it in a completely different way.

5) Technology/People Balance: I kinda feel that after a while product based businesses are more dependent on the technology than the people as compared to the service ones. For a company that makes diapers for example, the machines, the processes, raw materials are an important bit and once the basics are taken care of it can run without as much involvement  on the founders part. However for a services based business, say a consultancy service started by 5 guys with a finance background the business depends a lot on the people. Even when the organization grows big it will be known/trusted for the few names of smart/senior guys and once they leave for some other company, the clients might just follow them to their new home.

These are some of the differences I could feel and keeping them in mind I feel one might be (slightly)better of choosing the kind of business they want to do depending on their personality/skill set etc.

Guess you know what I mean, if not drop in a comment and we’ll take the discussion forward.

Link to Shack’s post: http://shackcompanis.com/post/1521371790/service-vs-product-business

I’ve been a regular follower of Seth Godin’s blog and like almost all his posts. However there are some posts of Seth that I like way more than others. A couple posts that really caught my attention a few weeks back were on choosing the customer and training your customers respectively.

Posted at an interval of two days these two blog posts taken together offer a nice(different?) perspective of looking at things when it comes to Customer Development. Against the common notion that you should try to attract all kinds of customers Seth suggests that you choose your customers. Yes, you choose your customers for your business by your brand value proposition, pricing, customer experience and other things. All aspects of the way you run your business attracts or repels certain kinds of customers. You might wonder, why is it important to choose your customers?

It is especially important to choose your customers if you have a perspective/vision and you want things to happen according to that and not according to the terms defined by the market. For example sake, consider two product companies, one of which is very choosy when it comes to picking their customers and would rather prefer a smaller set of customers of the kind that they’d like while the other company is not really that choosy and is open to catering to all sorts of customers, the more the merrier. Assuming they both start from the same point, it won’t be difficult to imagine how differently would shape up after an year into the business. Company A which focuses of select customers will emerge out to be almost on the lines of the founder(s)’s vision while Company B which wants to get as much customers as it wants will have significant difficulty living up to the varied expectations and might just give in to the (un)reasonable demands of the majority.

Not only this, Seth suggests that businesses should also train their customers. Yes, training the customers by encouraging certain type of behaviour by rewards etc and discouraging certain type of behaviour. For ex: If you’ve priced your product slightly above the market standard then there’ll be lots of customers complaining about your price and trying to negotiate their way down(in terms of prices). Now there are two ways to go about it, one that you let customers negotiate and other is to don’t bother. Over a period of time if you follow the don’t bother policy you’ll observe how some price sensitive customers will move out and the remaining customers will get used to the higher than market price and stop complaining (This assumes that their is something that the business  offers to offset the high price).

Another interesting effect that this has is that it helps in building a culture among your customers that’s decided to a large extent by your terms and not the markets.

My new startup ‘Dial-a-Book’ has got its first mention in print media today. It’s been almost a year since I started working on Dial-a-Book along with my younger brother and it’s been an absolute fun ride.

Here’s an excerpt from the article

Past life

Dial-a-Book is a Delhi-based start-up founded by brothers Mayank and Tarang Dhingra. Tarang, 25, is a final-year student at the University of Delhi. Mayank, 27, is a software engineer who left a corporate job at Fidelity International in 2005 to work for a string of tech start-ups—from SlideShare, an online presentation hosting service, to MPower Mobile, which works with mobile payments. In 2008, before the Twitter bandwagon bulldozed its way across the country’s Internet landscape, he experimented with creating a Twitter-like service for India called Kwippy—which Mayank called a “conversational platform”. The site folded in mid-2009, and subsequent dabbling in ideas on what to do next led to Dial-a-Book

and you can read the complete article here

I know some of you *might* find this surprising and *might* have some questions for me, so feel free to ping me anytime

The easiest, most straightforward way to create a great product or service is to make something you want to use. That lets you design what you know—and you’ll figure out immediately whether or not what you’re making is any good. – Jason Fried & DHH in Rework

(Image courtesy: topnews.in)

“Scratching your own itch(SYOI)” is a popular phrase amongst many startup circles. What it essentially means is to build something that solves a problem you face. The case in point cited by many is the fact that when you are solving your own problem you know what exactly the problem is and how it can be addressed while on the other hand if you are scratching someone else’s itch you are sort of taking blind shots at both the problem and the possible solution(s).

Apart from the obvious fact of knowing the problem a bit better what works for SYOI is

1. Immediate & Direct Feedback: You can directly feel the impact that your solution creates. If for example one builds a product to manage his food expenses, the utility/futility of the product can be judged directly and immediately. One doesn’t need to do a long trial run/demo to see if the product works.
2. Extra Incentive: You + Customers > Customers. Working on a problem that benefits oneself directly has additional incentive because of the direct personal impact. Not just this, the beauty of this scenario is that one doesn’t need to think about the customers all the time i.e one can be content by just solving his/her problem. Other customers become secondary and this is a good thing because you don’t have to worry about what they might/might not like and just focus on what works for you, simple.
3. Passion: SYOI also makes one more passionate about the problem they are working on because they can relate a lot more to the problem and the issues that arise because of it. The direct impact of the solution on you also adds to the passion.

However having said all that, Is ‘Scratching your own itch’ the only way out? or Is ‘Scratching your own itch’ better than ‘Scratching someone else’s itch’?

While SYOI might have it’s own benefits, it certainly isn’t the only way out for entrepreneurs and not every invention/business is born out of it. For ex: A closed social networking platform for Chief Executives (CEO’s, CXO’s etc) of Fortune 500 companies built by 24-25 year olds can still work or a dating platform built by a married man is no less likely to work because he’s not scratching his own itch {assuming he’s not interested in finding himself a date through this platform }

Also, not all’s good with SYOI and it also has its fair share of negatives

1. Small Market: What bothers you which might not be bothering others. Thus some SYOI businesses also stand a risk of solving problems for a very small market segment. For ex: A friend of mine hates to wait in queues for getting CNG for his car and is ready to pay someone extra amount to take his car and get CNG filled in it. So if he were to start a service based just on this then it’s quite likely that there might not be a lot of people willing to pay extra money to get CNG/Petrol.
2. Financial Feasibility/Business Model: SYOI might work great for Open source where all developers are constantly writing/modifying code to meet their needs and in the process helping scores of other fellow developers it might not work that well when it comes to doing a business. Not all personal itches and their solutions can have business models. This is not to be confused with the previous point on Small Market as having a solution for small market can still be monetized but monetizing something that appears to be a problem to you but no one else might see it as a problem can be an issue.
3. Domain Knowledge or lack thereof: Needless to say, while starting a business it makes a lot of difference if you have enough domain expertise in your team and it might hurt if you are trying to solve your problem without having enough domain knowledge. For ex: I probably won’t land anywhere if I were to try to solve my itch of building a car that flies instead of crawling on Delhi roads. It’s worth noting that lack of domain knowledge is also likely(a bit more?) to hurt when you are trying to scratch someone else’s itch.

S0 are you scratching your itch or someone else’s? How’s it going?

Links:

1. http://archipreneur.blogspot.com/2010/03/scratch-your-own-itch-rework-by-37.html
2. http://gettingreal.37signals.com/ch02_Whats_Your_Problem.php
3. http://www.instigatorblog.com/scratching-your-own-itch/2010/08/12/

Customer Service would easily be one of the most oft used(and abused) words in Business. For some people, customer service means giving their customers the kind of experience they would like to get (as a customer) but for others(majority?) it’s a mere formality, a lip service that you have to offer just for the sake of it.

While customer service in itself is a big subject comprising numerous things including principles,  processes and much more, there’s a particular thing that I feel is amiss especially when it comes to online businesses, i.e. Personal Touch.

Personal Touch in customer service for online businesses is according to me a great value add given the fact that unlike offline businesses the customers are not talking to a company rep face to face or they can’t talk at length(or decide to wait in the company’s office) till their issue gets resolved. In fact Customer Service, especially over email, which is the most prominent way of offering Customer Service/Support is by design(asynchronous) a customer-unfriendly method. Given the fact that instead of talking to someone in person or over phone you are literally talking to a computer and unless the guys at other end make some real effort to add some personal elements things are bound to not be smooth.Adding Personal Touch to any non-verbal communication not only helps build credibility/trust but also ensures smooth resolution of any issues that a customer might have.

Over the last few months I’ve run into(online) customer service reps of various services including E-commerce and Mobile operators and almost NONE of them have what one can say Personal Touch in their customer service. As expected, almost all of them just work on a few standard templates which their customer service reps copy and paste. What further intrigues me is the fact that contrary to being Personal some of these online businesses try to be the opposite i.e. being as impersonal as they can be.

While this reply

is still acceptable, these ones

are completely unacceptable.
I completely fail to understand what is the ingenious thought behind hiding the identity of the person who is responding to these emails. Could it be the CEO/CTO/CFO himself?

Not only is the case of missing identity a big barrier in building any sort of rapport with the business it also complicates things as the customer never gets to know who was the person whom they last spoke to(over mail), who are they talking to now and how much do they already know about their issue.

It’s not Rocket Science that small things like how your customer service team addresses their customers (Dear Customer Vs Dear Mr Dhingra), the tone/format in which they talk or type emails(Pre-decided formats or customized replies), how they sign off their emails(Customer Service, XYZ.com or Shantanu, Post Sales Support, XYZ.com, Email:-, Ph:-) matter a lot. They especially matter a lot when you are an online business and even more so when you are just starting up.  BTW Dell India is an exception in this regard(at least)

Isn’t it great to actually see the “Full Name”(unlike just the first name) of the person who just mailed you back?
Isn’t it re-assuring to know that you also have their professional email id, telephone number and even extension in their email signature?

Besides other things, businesses should realize that by adding “Personal Touch” in their customer service, not only can they solve customer vows more quickly and efficiently, they can expect to get more/repeat business from them.

So having said all that, does your Customer Service have enough Personal Touch?

About a couple weeks back I happened to come to know about Mr Bala Balachandran from a friend of mine who also shared with me the printouts of an article titled “I firmly believe that all customers are not equal” that  appeared in Business Standard on 24th December 2002(couldn’t manage to find a link). It’s not often that one comes across this much business wisdom in a 4 page printout.

After giving that article a re-read yesterday, I searched a bit on Mr Bala Balachandran and amongst other things I stumbled upon this series of fantastic videos on everything from Cost Management to Customer Astonishment. This would by far be the best material on business I’ve come across in 2010 and the fact that these gems are hidden from the world is reflected in the fact that these videos had been viewed 2-5 times at max. It’s only now after repeated views from me that these numbers have jumped up . Also, Balachandran not only shares his business wisdom, he does so in a nice and funny manner. At 72, he has contagious energy and passion.

Only if someone could stitch these  small 2-3 minute videos together would they make into an amazing video.

This is a classic dilemma that many entrepreneurs(especially the offline one’s) are likely to run into. Customers as we all know come in all shapes and sizes(and mindsets). While there will be some customers who will talk nicely to you and your employees, pay their bills on time and offer you a piece of advice or feedback whenever needed, there’s also a bunch of customers that’ll act as if they are doing you a big favor by using your product or services, they’ll negotiate endlessly on the price and keep getting into endless debates about the most minute(and irrelevant) issues possible.

As an entrepreneur and consultant both I too have run into the thought of segmenting customers into good,bad and ugly but I am not completely convinced if that’s such a good idea. I mean on one hand there’s a thought of optimizing the whole thing for a better ROI on other hand there’s this idealistic thought that customers/clients should be treated fairly and equally irrespective of their spending powers and other behaviors. I for sure would like to get a fair/equal treatment in all the products and services that I use irrespective of the segment I belong to.
If you are committed to offering a delightful customer service the non-segmentation of your customers is highly likely to come in your way. As pointed by Seth Godin here

If you’re going to be obsessed with delighting customers, it’s a lot more efficient to focus on customers that are able to be delighted.

A case in point being if a particular bunch of customers is impossible or way too difficult to delight/please why waste your resources on them when you could focus ‘em on some other set of customers that are more likely to be delighted by what you are offering?

A few things I could think of that one needs to keep in mind if such a situation arises are

1. Is the customer bad or your offering?
   A situation like this can also be a opportunity to give your offering another in-depth look. Maybe the customer is right and there’s indeed a scope for offering a better solution at the same or reduced price or maybe the customer service offered isn’t up to the mark. So before branding a customer as a bad apple, give a second thought to their feedback and see if there’s a genuine problem there.
2. How would it affect the Word of Mouth?
   While not giving the same time, attention etc to a not so good customer might be a good utilization for your resources it might have a spill over effect. In cases like these it is also pragmatic to ensure that your segmented behaviour will not spiral into a bad WOM loop. To avoid that ensure that this bunch/segment are not influencers/thought leaders or highly connected individuals from your target segment. For ex: If you are targeting a product or service aimed at doctors and for some reason you decide to segment them, try to ensure that your segmentation policy will not spill over to other doctors and doctors as a community tend to be highly connected to each other
3. Customer Segmentation != Spending power segmentation
   While you’ll find plenty of real life instances in which retailers/suppliers and many more tend to treat customers with high spending powers differently, it’s not the most wise thing to do. When I started this discussion though I included “paying bills on time”  and negotiation I never mentioned spending power as the deciding factor. I strongly feel segmenting your customers based on just their spending power isn’t such a good idea
4. Do not do unto others as you would expect they should do unto you
   One should always keep “The Golden Rule” in mind before taking any call on customer segmentation. This will most certainly save you from some bad decisions

What do you think about treating different customers differently?