No Pay on Delivery (POD)..The good, the bad and the ugly

Mid Nov 2017, Konga took a bold step to discontinue the almighty POD that represented a major part of our daily orders and decided to focus on service quality and further invest towards the future.

In the earlier days of Konga, we saw a 300% increase in orders in states where we turned on POD and it helped us gain credibility over time so when we decided to turn off POD and the associated costs, there was a lot of apprehension as to how things will pan out.

In my earlier post I had promised to provide insight for the benefit of the industry! So here is a summary of the good, the bad and the ugly

The Good

We now effectively net 93% of orders and the implications are

Better customer experience

We have less complaints, order to delivery time has shrunk by 20% as we deliver faster and failed deliveries are now down to 1.9% from 25.2% (we are marching towards less than 0.5% ).

Our Merchants now know with certainty that we only present them serious business leads and therefore merchants cancellations, reduced by over 50% from 15% to 7% (not that we are happy with 7%).

We are now able to better consolidate the customer journey on the platform and spend more time on customer experience rather than chasing POD deliveries all over the country.

Further Automation is on the way
Without the need for long winded POD payment processes, which included the need to confirm order authenticity over the phone for high value goods, we can now better automate our work. For instance, customers have been initiating refunds for cancelled orders from their Konga wallet and receiving credits on the same day, this they do via our desktop channel (mobile coming soon).

Our collections reconciliation process is now easy and you don’t have to be James Bond or Paul the Octopus to be able to unravel where the cash collected for each order sits.

So in a nutshell, Konga now has a better buy, deliver and refund experience. If you run a business and haven’t heard about unit economics, I implore you to read up about it. Our unit economics are much better as we no longer incur costs on huge volume of shipments that will not be delivered.

The Bad

As expected, volumes dropped but not as much as we predicted. At this point all I can say is thank you to our customers that have switched to prepay and trust us to deliver on our promise. I had thought we would loose a lot more orders but we are in a good place and this can only get better as we create trust on the platform.

An indirect consequence is that, we have now limited our business to the banked populace in Nigeria. To continue on this path means waiting for the banked customers to grow which is a possible strategy, but can we pin our hopes on CBN policies and banks increasing penetration? No

If cash payments still dominate and there are still a lot of underbanked and unbanked customers, we still have to address how we reach those customers, watch this space as we look to offer a different solution shortly.

The Ugly.

The amount of failed payments attempts is insane!! We would easily save 50% of lost volumes if payments went through seamlessly. We truly need more FinTech innovation in the payment space to make the payment journey simpler but still safe. I remember when I first joined Konga in its early days and as the CFO was very livid that a bank platform was down on a Sunday only for the bank staff to say, “do you expect us to be up on a Sunday? I am like….erm, I sell on Sundays and you are providing me a service! We therefore need an industry-wide mindset and infrastructure that encourages successful transactions and trust the customers a little bit more (maybe with the help of InsureTech)

I will also be the first to acknowledge the improvements we have seen in this area since we launched but like Oliver twist, we need even more!

That is it, as promised! We remain committed to the market.

Thank you to all our Customers, Merchants, Franchisees, Well-wishers, Konga Staff and Konga staff Alumnis who have embarked on this journey with Konga. You truly are appreciated.

I end with the man in the Arena’s words
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”….Theodore Roosevelt