An excerpt from a new book titled 'Master Growth Hacking', by Apurva Chamaria (with Gaurav Kakkar). It is all about building scalable businesses. This excerpt is about Zomato.
Pramod Rao, VP, marketing, Zomato
(Pankaj Chaddah, co-founder, Zomato, decided to move on from the company while we were doing the interview to understand Zomato's growth hacking approach. Pramod was kind enough to help us complete the study).
Q. What is Zomato's business model?
A. Our product enables users and restaurants to interact and engage with each other through various channels. In terms of our services, we have the following products and services:
• Search and discovery: Whether you wish to go out or order in food, our rich content helps you discover the best restaurants around you. This is our core content business which is focused on getting all the information on a restaurant's operation. This service also acts as a decision-making layer.
• Food ordering: Finding their choice of food at the click of a button helps users order in with ease.
• Table reservations: This platform assures users that they will never have to wait again.
• Zomato Gold: It is an exclusive members' club which helps you find new restaurants in your city every day and enjoy limitless dining privileges.
During the early stages of our presence in a city, once we have enough traffic, we monetize by selling ads. Once our content platform has built a strong network effect, we then monetize that through transactions. We have tried out various models as the years have gone by-from launching an events vertical to cashless payments to loyalty programmes like Treats and Gold. Some of these have worked very well and have scaled significantly-for example, ad sales, online ordering and Zomato Gold. We will continue to focus on building sustainable business models that provide value to all the three stakeholders in our business-users, restaurants and our company.
In terms of the business split, ad sales currently account for around 70 per cent of revenue, online ordering for around 25 per cent and Zomato Gold and other businesses for the remaining.
Q. What is Zomato's approach to brand communication?
A. The majority of our target audience is between twenty and forty years of age. Given the various products and services we are presently in, how we connect with them and maintain consistency in terms of their view on Zomato is very critical. I think we have always been a brand that has tried out something quirky, something out of the norm, and pushed the boundaries. At times I realize we might have pushed the boundaries a bit too far, and then we have course-corrected immediately. If we did unintentionally hurt a certain section of the user base, we would do all it takes to do a course correction and figure out a different approach altogether. However, if we don't push the boundaries, we would just end up communicating a plain vanilla message like 'now order online on Zomato', which isn't really exciting.
We enjoy having these interactions with users and restaurant partners. We want to maintain a jovial, fun kind of experience, whether it is to do with people's interactions with us on social media, on Zomato chat support or across any of the communication avenues we use. If we are planning to do billboards, we would want users driving past our billboard ad to stop and have a laugh or two. It should actually make them smile so that they have a message to take home and talk about. That's what marketing is all about. If we are able to do that and users go home and you tell about our campaign, I think our marketer's job is done well.
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We do all of the design work in-house-that helps us tell our story the best way to our users. For our recent outdoor campaign too, we came up with the design in-house. While there was an agency that helped us take the campaign live in terms of site options, media, activations, etc., the actual campaign design, messaging and all of the creatives were done in-house. Akshar Pathak is our art director. It was he who conceptualized the entire campaign. He designed most of the campaign, including the overall theme and the ingredients we tried out. If we are trying something that has not been done before, we validate it with some of our key function heads to get their inputs. This is not really a long-drawn-out process; there is tremendous freedom to try out new things and push boundaries, but of course without hurting anyone's sentiments. We definitely want to do the right thing-what is right for the users, for us and for others.
Q. What were the growth hacks Zomato deployed to grow? How much money did you spend?
A. Zomato has always been a very limited-cost marketing player. We have never done TV in a big way or outdoors, other than a small outdoor campaign recently where we used quirky messages targeting millennials. We focus a lot on near-zero-cost marketing, such as deploying below the line (BTL) materials like stickers and tent cards in restaurants, building strong online communities, organic social media, etc. We are able to scale fast and do it sustainably because of our zero customer acquisition cost. Some of Zomato's successful and famous growth hacks have been the following:
• About three years ago, we activated banners on mobile web asking our users to download our app. We started with a banner on the top of our mobile web page and also on the inner search and restaurant pages which garner the highest page views on Zomato. So we tried simple things like, you know, prompting the user to download the app after four photos are displayed or to download the app to view the menu because the experience on the app is much better and we are able to retain the user for a longer time once he is on it. These small tweaks-and I think there were at least ten or twelve of them which were rolled out at that point-resulted in a 30 per cent month-on-month growth in mobile downloads coming organically to Zomato, and 50 per cent of the downloads were through mobile web. We inculcate this thought in everything we do-you actually just need to keep thinking about how the user journey is right now and how we can make it better for the users.
• We also introduced an 'order online' feature next to the call button on the app and website at the same time. Zomato already had a lot of traffic that searched for food options on it on an everyday basis. Many users would call the restaurants to place their orders and we weren't able to monetize these calls. Now these calls started shifting to online orders. Most of the online ordering companies need to pay Google or Facebook to get users to transact through the service while we don't as most users at the closest point of purchase (what Google calls 'Zero Moment of Truth') are already on Zomato.
(Published by Penguin, the book has 307 pages).