Monday, December 26, 2016

In praise of the Big Baskets, Olas and Ubers of the world

Successful companies observe consumer behaviour to keep them
constantly satisfied

I am a consultant who admires and analyses brands. Brands are my livelihood and passion. One of the most important things I have learnt is that there are no brands without consumers. Consumers make brands and when they desert them, the brands no longer exist. Remember Kodak, Nokia and Sony Walkman? Where are these names today?
It is this appreciation of the value of the consumer and their good sense that prompted me to write this piece in their defence. But why now? Yesterday I read an article on how Ola and Uber have got their business models completely wrong. Basically, the piece argues that their model is flawed, built around giving incentives to consumers and drivers who are paid out of cheap capital that is being badly used. I am not going into the economics of their business but let me share my experiences with Uber, as I am a diehard fan of the company, which to my mind is one of the most disruptive brands of today.
Customer comfort is the key
People who live in Bengaluru and take flights generally return late at night to avoid traffic. I usually land at 10 pm and take an Uber to my house, which is a mere 45 kms from the airport! Most recently, I was assigned a new car; Uber seems to upgrade me to a bigger one every time. The driver was respectful and loaded my baggage into the car. But most importantly, he let me sleep! He did not wake me up at the tollgate or ask me for directions as he had an updated GPS. He woke me up respectfully only when we reached my doorstep at 11.15 pm. He deposited my bag and wished me a good night, subtly reminding me to give him a good rating.
But the pièce de résistance for me was that it cost all of ₹649 to travel in the comfort of a Nissan Sunny. I must also mention that earlier, I had travelled the same journey in a rickety Mahindra Logan for ₹1100!
But I’m not complaining. I don’t complain when Ola rides cost ₹6 per km, making commutes in air-conditioned cars cheaper than autos. Nor do I complain when the Big Basket representative comes to my kitchen and loads well-packed vegetables into my refrigerator.
Doomsday is around
However, if you were to believe financial pundits this is the end of such companies and their heady days. Experts have begun asking how long their funds will last while the VCs get jittery.
As a branding person, I know that the pricing is predatory, that they are trying to lock me in. Uber, for instance, makes me many offers as I frequently use their services. My question to the financial experts is simple: Why should I mind? If their business model is flawed, shouldn’t they be more worried than me? I will continue to look out for myself and am fully capable of moving on if I don’t get the value I deserve.
What of the future?
History has shown that consumers are smarter than they are credited with. They know what they want. Remember how consumers rejected the “new Coke” or closer home, Ponds toothpaste? Sadly, marketers and analysts tend to underestimate our capability. As a consumer, don’t you think we know that Uber is pampering us with its predatory pricing? We know that the party may not last. Yes, prices will go up eventually and there is evidence of this worldwide.
I also know that the cars will age and the drivers might get complacent and rude even. What will I do then? I will shop around actively and look at other options. Look at the popularity of UberPool for instance in cities like ours. Regular consumers tend to compare UberPool with Ola Pool and take the one that offers better value.
Yes, consumers are smart and constantly seek value. Today I get value out of these offers but what about tomorrow? Well, who knows? I may even ride a cycle! And what should marketers do then? Observe my actions and scan the environment for new opportunities to keep me constantly satisfied. And I will reward them with my loyalty.

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