The company is working with corner stores, or ‘kiranas’, and consumer brands to create an operational model that will enable shoppers to buy at neighbourhood shops using digital coupons via its Jio Money platform or text messages.
Jio is launching a 360 degree attack on every possible digital player, thanks to the basic experience it owns.
The Jio Phone.
Jio not just has 132 million users, but access to SMBs (remember they also sell GST software) – so bringing them on to the Jio nework is not just one transactional business (like Paytm, PhonePe), but a wholesome one.
Reliance already has a fashion portal, AJio, but expect Jio to launch grocery and other related business.
So Zomato launched Gold yesterday and within a day, Zomato has sold 31,000 40,000 memberships (it is now sold out).
Zomato Gold is an exclusive dine out and social drinking membership program that extends special perks like – a complimentary dish (think BOGO!), and up to 2 complimentary drinks (think happy hours all the time), every time you dine at, or hit the bar at any of our partner restaurants in India. Gold can be used at our partner restaurants and bars in a very limitless way – i.e. on any day of the week, at any hour of the day – on the entire menu – any dish or drink on the regular menu (blog/link)
Assuming a mix of 50-50 (i.e. 50% taking up 299/ subscription and 50% 999 (annual) subscription), Zomato made Rs. 2.5 crores.
That is ~Rs 2.5 crores – in real cash for a service which hasn’t been rendered yet.
And no payout to any restaurant has been made.
To me, this is one of the finest execution of a subscription (virtual) product at scale.
Can you also do this for your business? That is, run a subscription business which sells like hotcake?
Well, here are a few things that Zomato did it right.
1. Sell what people need (Everything else is BS).
And not just what you can sell. Most companies sell what they can and not what customers want. Find the fit and do the grill.
People love to eat outside – this is the most basic human need and Zomato has been enabling the same for many years.
Compare this with several kickstarter/indiegogo products – which are fancy, but don’t get enough subscribers. Why? Because they don’t sell what people actually need.
Zomato actually sold the notion of ‘free’ food to people.
2. The psychology of FOMO.
First 10,000 subscribers will get it for a discount amount. And then, a little bit more and more. The team kept increasing the number (now it is 35,000) – smart move to keep it exclusive, test the waters, create FOMO (Fear of missing out) and let the laggards catch up.
Zomato could have said ‘only 4,000’ remaining, but that won’t have given the correct picture of the largeness (of the total subscription numbers).
Only 4,000 remaining out of 35,000 subscriptions creates much bigger FOMO than just saying 4,000 remaining (out of what? 4,001?)
Smart social media integration helps build the noise – which translates to more FOMO. When you see your friends talking about this on social, you are bound to give it a try and buy the discounted offer.
Note that this isn’t a one-day effort, the subscription launch page actually went live on Nov 8th, giving the team enough number of (pre-launch) subscribers – which they could reach out to on the launch day.
It is a steal ?
Prices will go up in a day or two. First 10,000 memberships will be sold in a couple of hours at the current pace.
3. Referral. The referrals actually helped the deal go viral. Zomato offered 1 month extra to users for each referral they receive, and anyone who signed up with a referral code got 25% off.
This is, nicely integrated with the product – and wasn’t a standalone experience. Importantly, the referral code was only for the ones who have already bought subscription – so there is a certain degree of credibility (and eat the dog food) built in.
This is how FOMO probably would have looked like (until they decided to just buy the damn subscription).
TL;DR: What can you learn from this quick success of Zomato Gold?
Do you think that many tech entrepreneurs get a MASSSSSSIIIVEE ego boost by bringing in celebs as brand endorsers (at somebody else’s cost, i.e. VC money?).
Agree that celebs give you a mass promotion, but it works with intent. SRK has a mass appeal, but is he known to influence our buying decision when it comes to educational products? He can influence vegetable / grocery decision (i.e. Big Basket), but educational? Not really. I am actually more appalled by this and won’t even try BYJU’s for my kids. To me, it now feels like a ‘wannabe’ product.
If you were to bring in a ‘celeb’ to boost your educational product, who else would you go for?
“You get a show or a movie you’re really dying to watch, and you end up staying up late at night, so we actually compete with sleep,” Reed Hastings, CEO of Netflix.
“Sometimes employees at Netflix think, ‘Oh my god, we’re competing with FX, HBO, or Amazon,” said Hastings, “but think about if you didn’t watch Netflix last night: What did you do? There’s such a broad range of things that you did to relax and unwind, hang out, and connect–and we compete with all of that.”
Voonik has told 200 employees that it won’t be able to pay them their salaries for the next three months as it undertakes massive cost-cutting measures.
“Voonik is currently one or two months away from EBITDA profitability. One of the measures is restructuring certain teams. As part of this exercise, we have requested these team members to self-select to being part of our last leg of journey towards profitability, which includes deference of salary if required. We have done this exercise in the past as well and we always have paid back the deferred salary.” (Sujayath Ali, Voonik founder/source)