Gaming Consumerism Part 2- The ultimate playbook!
2 weeks back I wrote a piece on how business in India has played the consumerism game in the last few years. In this part I am going to introduce you to the consumer playbook to stay ahead of the game. But before diving into it, a small glimpse into the history of Indian consumerism.
Pre 1991-license raj
Let me start with a fact-About 52% of the current Billion+ Indian population has not experienced license raj in any form! Thats phenomenal given they also form the chunk of our online consumers in the digital era! (Dedicated read for people curious about pre 1991 consumerism). Business enjoyed significant monopoly by employing 2 tactics:
- Weed out competition by denying them license either via wielding power of money or political connections.
- Deploy scarcity economy. Customers were so devoid of choice, they would buy any product when given a chance.
This meant companies never had to worry about efficiency, quality or cost reduction. Their success was defined purely on the connections they could make with the authority. The king of License raj Ambani wielded this wisely and his empire is probably only notable survivor today from that era.
1991- The Birth of Consumer Choice
Its well researched and documented fact that Manmohan Singh opened up a new India to the Millennials. As of 2017 we have 1.1 Million registered and active businesses in India.
This simply means there are enough and more businesses eyeing for your wallet thus creating perfect competition. Consumers have turned kings and its now their turn to be pampered and well treated.
But the million dollar question is — how does the consumer stay ahead in this world of chaos? Let me share the playbook to ace this!
“Triangle of Opportunity”
Every business is looking to influence a customer across these 3 stages.
For every business there are specific business owners and teams which have deliverables, metrics and targets tied around these stages. They are desperately on the look out for you as a customer and will sponsor your purchase in some manner.The holy grail is to identify “who will sponsor your action across these 3 stages”. The more( and influential) sponsors you find the cheaper your purchase becomes. Let me break this down for you by stage.
The cardinal sin every customer commits is let google and facebook get paid for your acquisition! If you ever listen carefully to your favourite brands- they are willing to discount organic acquisition (both first time and repeat). They crave for building an organic consumer database and are willing to sponsor your kindness.
Consumer Tip: Build an arsenal of contact: 2–3 Email ids, 1–2 phone numbers and Social profiles across major platforms. This is what you give to get sponsored.
Now that you are acquired, do not go and straight away purchase the product. Wait for the business to tell you what behaviour they are sponsoring at the moment. It could vary from
- Special pricing on a specific channel (for ex app) to encourage app downloads behaviour. (Any e-commerce)
- Member only pricing to improve sign ups (Any e-commerce)
- Waivers to complete cart purchase so that cart abandonment as a metric is reduced. (Any e-commerce)
- Deep discounting to clear their unsold stock (best known in Fashion)
- Advance purchase at promotional rates. This is just to generate cash flow for their future inventory (best known in airlines and hotels)
Consumer Tip: Given you have built an arsenal of contact (emails, calls, sms, notifications) use them effectively to listen to what brands want you to do. You can then decide which behaviour suites you the best.
Once you are through with step 1 and 2, there is still some juice left! Given the Paytm Vs Bank war going on, there are multiple sponsors waiting for you at this step! (Remember this is an acquisition for them). There are plethora of options available:
- 0% EMIs to finance your big purchases at almost no cost.
- Bank/Wallet sponsored Cash backs on certain mode of payments
- Bank/Wallet sponsored promo codes to discount the price further. (like Popular BOGO offers)
- 10x reward points which you can eventually redeem.
Consumer Tip: It pays off to have multiple payment channels. Despite the evils of credit cards and wallets, currently they offer significant savings and convenience. My recommendation is atleast 2 credit cards (from large banks), 1 debit card, netbanking enabled account and a popular wallet account.
“Playbook in action”
I thought of putting the playbook in action and in a space which is my favourite- Flight Hacking
Online Price at the time of search: Rs 1721
Acquisition Channel: Organic referral app download. Goibibo offered 500 Go cash+ and 3000 Go cash for referral app download.
Behaviour: Indigo advanced inventory purchase (to sell their monsoon inventory)
Purchase: Standard chartered debit card (Cash back of Rs 50 for Goibibo purchase. Not reflecting on the invoice)
Overall Discount — 38%
The playbook will fall flat under 2 circumstances:
- when consumer purchase is defined by irrationality. ( Any impulse purchase for that matter!)
- When the brand has built unquestionable moat, value and identity for their service/product. Then the value consumer sees in them supersedes pricing (assuming it is within their price sensitivity range)