Case study on multiple relaunches of Zomato loyalty

programs

Introduction
 Food delivery apps have radically revolutionized our dining habits due to the
simplicity of ordering food through our smartphones.
 In this competitive climate, retaining consumer loyalty has become critical to
the long-term viability of these platforms.
 Consumer loyalty programmes are one incredibly successful method that
these applications utilize to create consumer loyalty.
The Significance of Customer Loyalty in Food
Delivery Apps

 Customer loyalty serves as the cornerstone of a thriving food delivery

service.
 This holds true not only for sustaining a steady stream of revenue but
also for fostering a robust brand image.
 Devoted customers tend to engage in repeat purchases, offer word-of-
mouth referrals, and can even evolve into brand advocates, thereby
significantly boosting the platform's expansion.
 Given that obtaining a new client is far more expensive than
maintaining an existing one, incorporating customer loyalty programs
becomes an essential investment for any
food delivery app development company seeking long-term success.
Benefits of Loyalty Programs

 1. Increased Retention Rates: Loyalty programs incentivize clients to continue

using a specific food delivery app. These programs encourage consumers to prefer
the platform over competitors by delivering prizes and perks.
 2. Higher Customer Spending: Customers are frequently encouraged to spend
more in order to access larger incentives through loyalty programs. This increased
expenditure directly contributes to the food delivery app's earnings.
 3. Word-of-Mouth Promotion: Customers who are pleased with the app are more
likely to suggest it to their friends and family, gaining new users through word-of-
mouth marketing.
 4. Data Collection and Personalization: Loyalty programs offer valuable insights
into customer preferences and behaviors. This data can be leveraged to personalize
offerings, improving the overall user experience.
 5. Brand Affinity: Customers who are pleased with the app are more likely to
suggest it to their friends and family, gaining new users through word-of-mouth
marketing.
Types of Loyalty Programs

 1. Points-Based Programs: This is the most common type of loyalty program where
customers earn points for every purchase. These points can be accumulated and later
redeemed for rewards such as discounts, free meals, or exclusive offers.
 2. Tiered Programs: In tiered programs, customers progress through different tiers
(e.g., silver, gold, platinum) based on their spending or engagement levels. As
customers move up the tiers, they unlock increasingly valuable rewards.
 3. Punch Card Programs: Similar to physical punch cards, these programs offer a free
item or discount after a certain number of purchases. This straightforward approach
encourages repeat business.
 4. Subscription-Based Programs: Customers pay a recurring fee to access premium
benefits such as free deliveries, exclusive menus, and early access to promotions. These
programs ensure consistent revenue for the app.
 5. Gamified Programs: Incorporating gamification elements, these programs make
earning rewards a fun and interactive experience. Users might spin a virtual wheel, play
games, or complete challenges to earn points and prizes.
Best Practices for Implementing Loyalty
Programs

 1. Clear and Simple Rewards: Keep the rewards easy to understand and attain.
Complicated structures can discourage participation.
 2. Personalization: Utilize customer data to tailor rewards based on individual
preferences and behaviors. This enhances the feeling of value and exclusivity.
 3. Multi-Channel Access: Make the loyalty program accessible across different
platforms—app, website, and even in-store if applicable.
 4. Regular Communication: Keep customers informed about their progress, rewards,
and upcoming promotions through notifications, emails, or in-app messages.
 5. Feedback Integration: Allow users to provide feedback about the loyalty program.
This not only helps in improving the program but also shows that their opinions are
valued.
 6. Limited-Time Offers: Introduce time-limited promotions or special events
exclusively for loyalty program members to create a sense of urgency and excitement.
Summary
 Customer loyalty programs stand out as a powerful tool for creating
long-term relationships with consumers in the changing field of food
delivery applications.
 These initiatives not only improve client retention, but they also improve
the entire user experience, which eventually contributes to the platform's
development and success.
 Food delivery apps can build a devoted client base that is not only
committed to their services but also ready to share positive word-of-
mouth by giving appealing rewards, tailored experiences, and seamless
involvement.
 As the business evolves, loyalty programs remain a steady approach for
remaining competitive and cultivating long-term consumer connections.
Zomato Gold Launch –Nov 2017

• In fiscal 2016, Zomato’s losses increased by more than three times to Rs 4.41 billion.
• The company’s cash burn was also very high at an average of US$4.2 million a month, flagging
concerns around its heavy investments in online food delivery services.
• In order to curb the losses and capture the dine-out market in India, Zomato launched a premium,
subscription-based dining out program called Zomato Gold (ZG) in November 2017.
• The exclusive membership program offered customers complimentary food (1+1) and drinks
(2+2) for every order they place with selected Zomato gold restaurants
Competitor benchmarking-Nov 2017
Zomato got First Mover advantage as “No Competitor had launched
any subscription program on or before Nov 2017”

Program Launch Restaurant Cities Subscription options Benefits Subscriptions

Date partners

Zomato Nov 1200 Mumbai INR 299/3 Months You get 2+ 2 drinks in Zomato Gold More than
Gold 2017 Delhi NCR INR 500/Year partner restaurants 60,000
Bangalore You get 1+1 food in Zomato Gold
partner restaurants
Each partner restaurant offers only
one of above two offers
If all the people who are dining at a
table have Gold, all of them can
avail the discounts
Referral code can be used to add
one more month to your as well as
your friend’s subscription period.
After you have bought the 3-month
subscription, for a small period of
time, Zomato gives you the option
to upgrade to annual subscription
by the paying the residual amount.
There is an auto renewal feature
for the subscription
Online Survey
 Understanding macro consumer behavior to assess overall
product/service experience is importance before diving deep
into specific product/service
 Group 4 has prepared questionnaire for customer survey

Survey:(Customer Feedback - Google Forms )