Tag: Ecommerce

The Missing Piece Among Indian Ecommerce Players : C.R.M.

Qn: When did Flipkart start sending emails (latest being valentine’s day offer) to its customers?
Ans: A few weeks back.

Qn:What about other ecommerce companies?
Ans:They took the extreme route and have sent mailers to those who never bought from or, never ever subscribed to their newsletter.

No focus has been given to understand the customer’s behavior or its affinity towards the marketer’s communication.

Current Metrics followed by Indian ecommerce companies

Transactions. And not repeat purchase, or returning customers.

An investor (of an ecommerce company) made an apt statement during an informal conversation that most of ecommerce players are focusing on ‘acquiring transaction’ and not on acquiring customer. In fact, very few actually are spending efforts in understanding the difference between the two.

Theoretically speaking, these companies are targeting repeat purchase (they are trying to), but practically speaking – the focus is more on getting ‘that one’ transaction from users – and this is obvious from the sleazy or misleading banner ad you will spot of ecommerce companies trying to sell anything in the name of ‘category expansion’. The trend has been the negative margin campaigns where the marketer literally shows the desperation to get that one time transaction happen.

For instance, Yebhi did a campaign to sell slippers at Re 1, yes Re 1. The result was great – they sold a lot of slippers for that cost, but how many of them later came back to buy shoes or,even socks? So who are these guys that Yebhi acquired with this revolutionary campaign?

One example is “Paras” – a college kid(from Delhi University) who recharges his prepaid cell phone from a particular shop near his home cause he gives him a free chewing gum each time. Paras has visited the website so many time after that just to find out if any thing else he can get at Re 1, as on today that was his first and last transaction with the retailer. Plus as he has been finding the emails irrelevant- he has been marking them spam. There are many other examples where the retailer is getting people like Paras on board in the name of acquisition and inflating the customer base to go back to the VC to show him growth and secure that next round of funding in the bank account.

Loyalty : The Ecommerce Way

Today the customer has so many options,so is it that make jump from one website to another? Is it only pricing?

Most of ecommerce companies have been busy playing the ‘hey! we are cheapest’ game but is that all that matters to the customer? You deliver the product in a bad shape the customer is annoyed, your customer care is rude the customer is annoyed, your delivery is late the customer is annoyed and there are many more things that affects the customer and it could result in change of mind to switch to your competition.

One of biggest thing that all these guys missed out is the fundamentals of why would a customer would buy from you and only from you. For this to happen the first step is that the consumer needs to like (oh! Please stop buying Facebook likes?) you and fall in love with you. What have you done to make this happen? Have you done anything special that the buyer is bound with “stickiness” to you? Have you shown him that you really care for him, or, have have you expressed that you really understand him and his needs? Unless you have done any of the above you have no right to complain that the customer only looks at pricing. And neither is pricing the only metric to pay with – unlike what most of the ecommerce companies like to think.

Real life example

(1) Boy reaches late on his date with his lady love and hands over a Rs 100 to buy herself an ice cream – By the way that is how your customer feels when you delay or, deliver the product that is not matching the customer’s satisfactory level and you have given them coupons/store credits.

VS.

(2) Boy reaches late on his date and takes out a red rose (Rs10/) from his inside pocket with a small note saying “I am sorry”- Have you tried sending them- be it a small gift saying sorry and appreciating their patience?

Now, take a look at how companies like Amazon have built customer loyalty.

The first thing that they took care was actually becoming a shopping destination rather than becoming a discounted shop. They actually reward loyalty! Case in point: FREE Super Saver Shipping, that gets you free shipping of products if you place at least $25 of eligible Amazon.com products in your Shopping Cart.

Now, how many Indian ecommerce companies are even thinking of rewarding loyal users? Do they have the understanding of the individuality of the customer to reward them appropriately?

“Flipkart is now charging me Rs. 30 to ship any order in case the total order is lesser than 200.! Well, amongst the 230 odd books that i have purchased on flipkart, less than 5% of the books were of cost above 180..!! So, what i dont understand now is why is there a shipping cost?” [@Madani/Pluggd.in Forum]

The key to understand here is that customers are not always looking for cheapest price, but a lot more in terms of what efforts you take to make them feel cared and understood. In a brick and mortar world example,you don’t want to be the factory outlet that sells stuff at a discount throughout the year, you want to be the shop in downtown that the customers thinks of first when he wants to buy clothes.

Long story short, most of the ecommerce companies aren’t yet with the customer. They are more focused on the customer wallet than a customer’s preference and expect the bravehearts of the ecommerce space to come out and do a better job of building a solid CRM around the service.

Having said that, companies like Flipkart are doing a few things right. Like ensure timely delivery by their OWN logistics providers. Empowering call center executives to give refunds amongst a few customer focused actions. However its still the tip of the iceberg – and a long way to go for the community as a whole.

For now, customer relationship is invoked only when a customer tweets or puts up a blog post. Till then, it is assumed that everybody is happy.

What’s your take?

[Article jointly authored by Ashish Sinha, Sameer Shisodia and Saurav Patnaik (cofounder of kenscio).]

Click here to read the original article at pluggd.in.

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How to survive the eCommerce bubble burst?

Already there have been quite a number of articles and open letters written about Taggle shutting their shop and what direction the existing online retailers are moving.

I was not surprised learning about the burn rates for Myntra, Snapdeal(Pluggd.in) etc. Not too sure about the margins that they make on the each sale. Considering the price of acquisitions for each customer coming in the range of Rs. 1200 to Rs. 2500, I am sure about the revenue generated by that customer must be some thing out of this world – yeah right!

ecommerce bubble burst

The Ad Networks and the Publishers are having their best sales year. Have few friends (Media Sales) who had completed their annual sales target by the end of the second quarter of this year. Dot com players have been pushing hard to earn and grow their marketing lists.

Essentially, it has been a competition among the players to get more and more buyers to register on their website. Considering the current situation every player has been able collect huge numbers. However if we look a bit deeper the calculation of revenue per user has gone for a complete toss. Loyalty towards a retailer means nothing to the consumer as everyone’s initial proposition was and is that I am cheaper than the other guy. In the greed to sell more every retailer took up more orders than they could actually deliver resulting in order cancellations, irritated customers, bad customer reviews.

Net Result – One-night stands or, sour relationships.

The price of acquisition per customer increases many fold the moment you have new customers who are irate. Because, they are not likely to shop again. They are Lost Customers.
How many orders can i fulfill ensuring customer delight in at least 90% cases? This is the math, which needs to be done each morning & not how many orders can I ship today and which ones?

If this is the scenario than maybe we are venturing a decade back when dot coms tried to “Get BIG fast” and crashed by the dozen. According to dot-com theory, an Internet company’s survival depended on expanding its customer base as rapidly as possible, even if it produced large annual losses. For instance, Google and Amazon did not see any profit in their first years. But their timing was impeccable and they made it. Both the companies also ensured Customer satisfaction, which brought loyal customers to them.

A backward calculation of the ROI expected per sale SKU can help determine the maximum cost per acquisition which can be invested. Going beyond this figure would mean eating away not only the marketing bucks but also the operational cost to ensure smoother operations.

It is also a fact that the cost per acquisition is not going to be the same at all times. Infact it is going to be lower- The primary reason being either few players would crash or dry up their marketing bucks :). As it is going to be the last man standing who shall reap the benefits of calculated spends and ensuring customer satisfaction.

Timely interventions bundled with relevant communication to the right audience are always a killer combo. Yes it does require some efforts but it pays having the right mix of Profitability and Growth.

Soon we will be posting more strategic initiatives that a marketer could take up to achieve the mix.

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