Creative Growth Strategy for Tootle (A ride-hailing app)

About Tootle:

It is a Kathmandu based online aggregator of cars and two-wheelers. It aims to disrupt the public transportation business in Nepal by expanding into other major cities starting from Kathmandu. It connects people who are willing to share their two-wheeler and cars ride with people who need to travel. It is a convenient and digital alternative to cabs which is affordable and faster. The smartphone application does the job of connecting.

About tootle application:

The Application allows you to send a request for a ride to a Tootle driver. The GPS receiver - which should be installed on the mobile device (smartphone) on which you have downloaded the Application - detects your location and sends your location information to the relevant Tootle driver. The Tootle driver has sole and complete discretion to accept or reject each of your requests for the Service. While the Tootle client also has an equal right to accept or reject the service. If the Tootle driver accepts your request, the Application notifies you and provides information regarding the Tootle driver - including his/her name, gender, vehicle number, photograph and the ability to contact by telephone. The Tootle driver will also have access to the rider’s information (name, gender, phone number). The application also allows you to view the Tootle driver's progress towards the pick-up point, in real-time.

Since Tootle operates under the aggregator business model, cabs and two-wheelers are our one group of customers and the general public are another group of customers.

Process

Creative growth strategy

1) Partnerships

Partnering with local cabs. Making local cabs function under the ‘Tootle brand’, a win-win situation for both.

Implementation

Apart from social media marketing, local newspaper advertisement, we will reach out to at least 150 cabs per week (individually or via cab operating agency).

Primarily, aim to target young cab-owners/drivers as they are more-tech friendly and understand the use and benefits, thus, the higher prospect of being our customer.

Total cabs in Kathmandu city= 10000

Tech friendly/young cab-owners/drivers = Approx. 4000 (based on informal data)

Reaching out 150 each week,

Customer acquisition

=30% of 150

=45/week

Cost:

Since we have to go to each of their feasible locations individually:

· Travelling cost.

· Around 4 employees at field-work.

· Possible bribery

(to obtain the details and contact info of cab drivers from government authority)

Benefits:

45 new costumers per week.

Valuing customer:

Average rides per day per cab: 6

Average fare per ride: $4.00

Total fair per cab per day: $24

45 cabs: $1080/day

$7560/week (approx.)

We charge: 25%

Increment of revenue per week (approx.) $1890

2) Getting the most from GIS technology.

Tootle being a Geo-spatial technology apart from the use of GIS in maps, location and routing, we will offer the facility of ‘hot-spot’ recommendation to our customers

By Hot-spot, I mean the place where more people are looking for cabs. By this method, the more Tootle cars and two-wheelers can gather in the places where ride-demand is likely to be high. This way, they will have a huge advantage over traditional taxis.

We will thus market this strategy and promise the annual revenue increment of the vehicles, under Tootle, by more than 30%.

Apart from this, marketing strategies can also be designed according to the geographical segmentation.

Integrating following features in the software:

-Monitoring Regular demands from historic data.

-Special Events like sports, fairs, conferences, events etc.

-Sending timely recommendations.

Cost:

The one-off cost of developing the mentioned features in software.

Benefits:

Strong marketing tactics.

Cabs would be tempted and hence, huge customer acquisition.

3) Loyalty prizes.

Customer who completes their first 20, first 50, first 100 rides, and first 1000 will be given loyalty prizes that could be free rides, Tootle balance or discount.

Tootle Cars and bikes who complete first 100, 500 and 1000 ride shares would also be given loyalty prizes accordingly.

-Tracking the number of rides in the app and automating the prizes when they meet the criteria.

Cost and Benefits:

Negligible cost of ‘loyalty prizes’ as compared to benefits from customer retention.

4) Segmentation of customers and potential customers. (Segmentation targeting)

There are many segments of customers. We will target them and develop our marketing strategies accordingly. We will use specific ads and tactics to attract each group of customers. We will also use the platforms accordingly.

Customer segmentation example:

-Commuters who don’t have vehicle preference bikes or cars (Young, office goers, and college student). -Those who don’t mind sharing the cabs

-The one who prefer taking personal Cabs.

-One who prefers premium service and travel.

-Long journey commuters.

After Segmenting the customer devising the right platform, marketing content and social media for each customer.

e.g. Facebook and YouTube contents like catchy and trendy videos for students and youths, LinkedIn contents for jobholders, hashtags, SEO etc.

Cost and Benefits:

-Data collection and analysis costs.

Increased marketing cost which will lead to more effective marketing and hence broad reach and higher customer acquisition.

5) Attracting new customers with cash balance.

As people sign up or do a referral, the direct balance goes to their Tootle account that can only be used to book the rides.

The amount of balance that can book one ride is automatically transferred to the Tootle account as people sign up.

Costs and Benefits:

A worthy investment to make customer try the application. An effective marketing strategy that tempts many people to try the product.

6) Sequencing.

Since, we will have limited resources (drivers, money, technology and manpower) we have got to be really smart about how we choose to expand, picking the right cities at the right time to maximize our success.

We have to choose the locations which have the biggest discrepancy between supply and demand for cabs. Also, while launching in the new city, we have to be cautious and try and launch during times when the demand is likely to be the highest, for example, in tourist cities like Pokhara, it’s better to launch at the peak month of tourist inflow September-November or during large concerts or sporting events, when big crowds of people all need cabs at the same time, so people are more likely to try a new service.

As the company grows, researching the best location to expand and start the new service.

Cost and Benefits:

Effective utilization of resources.

7) Studying the feasibility of Open Maps

Tootle have to rely upon Google maps. One of the major costs for Tootle would be the use of API provided by Google.

Since Tootle only aims to operate in a few major cities and doesn’t plan to get international, if we can use the open-source map for those cities, the cost would be dramatically decreased.

On its second or later round of investments, studying and experimenting the feasibility of Open-source maps.

Cost:

Huge cost of research and development.

Benefits:

Exponential cost reduction if proven success.

-It’s API can be sold separately to other Geo-spatial businesses like food delivery, e-shops, etc,

[Detailed feasibility study and research should be done along with cost-benefit analysis and investment planning (using NPV, IRR, DCF etc.) to analyze the profitability of the project and only be carried out if it is advantageous.]