Is there enough space for multiple loyalty Apps in Thailand? How Startup Weekend can help you to gain success?
Interviewing Sitsari Kitisakkul (Sid), Got It Apps co-Founder. Got It Mobile App is already well known among its users and Bangkok’s startup community. The majority of people know that it’s all about loyalty programs. Here is how they introduce themselves.
Sid, how are things going at Got It?
We launched Got It less than a year ago, it was July 2012. Right now we have over 30,000 downloads, that’s total iOS and Android. Got It has very high proportion of registered users: 75-80% of people are taking an effort to register. In terms of active users, it depends on what kind of promotions we are running.
We started off with stamp card promotions such as “buy 10, get 1 free”, and we quickly realized that it was probably too narrow in focus.
Merchants run those types of promotions periodically, seasonally – they don’t run them all year around. And just with the few exceptions like coffee shops and places that sell milk tea and other soft drinks.
What we have done, and we are going to continue doing, is expanding our promotion tools for the merchants. Now we also have one time promotions or coupons, when people can enjoy their discounts right away without accumulating lots of purchases.
In March we launched a nationwide promotion with Dunkin Donuts, where we actually allow people to have a digital version of their member card within Got It. It will be available in more than 240 locations across the country.
Lots of retailers have been distributing member cards or member packs to customers for years. Usually through retailers, where you might pay between 100 and 200 baht and you get a plastic member card, a book of coupons. The purpose of the coupons is to bring people back during the year, purpose of the member card is to get them in by giving 5% or 10% discount all the time. Basically, we are taking all those physical items, and give people the option to have their digital version within the App.
The advantages of doing it all online are: 1. Mobile. 2. Digital and traceable (brands can track how efficient it is to bring people in). 3. To use the Got It App you need to register and create a user profile, we can see which customers are the most active, therefore we can start customizing coupons and segmenting customers and send different types of coupons to different types of customers. When we reach sufficient data, our system can support that.
This is the stage where we currently are, expanding our offering tools for merchants to engage their customers just to make the market bigger, so that we can work with them all year around rather than on a seasonal basis.
How many merchants and brands do you have right now in total, if we are talking about numbers?
We’ve worked with around 30 brands, but not all of them have active promotions right now. I would say one thing that sets us apart from other players in the space is that we work with the bigger brands. It was our intention from the start, and our product is designed to be easily deployed to a brand with a lot of branches.
Dunkin Donuts was one of the first merchants that signed up, and when we first launched our App they were on board. In the beginning we only did a pilot program with 10 of their locations. It was a way to test it for both sides. It’s pretty good when your first client makes such a test with you, in order to analyse strengths and points to improve.
As we understood, your monetization model is to charge the merchants you are working with, is it correct?
Our business model is the following. For this kind of App is really hard to justify or try to get payment from consumers, there are only a few Apps in the world doing that. From day one it should be a free App! But in the way of building a sustainable and profitable business, money comes from the brands and merchants. We have a subscription model: we charge a monthly fee for the basic service and for additional services and customized campaigns, in which case there will be additional.
In recent months we explored other sources of revenue, and one of them is connected with third parties, like banks and insurance companies. Their products, in their own words, is not that interesting or exciting, that’s why they are looking to give their customers extra benefits. You have definitely seen if before: for example, you go to the restaurant and then see a note on the table or in the menu “If you are a green bank customer, you will get this kind of promotion. If you are a blue bank customer, you will get a different one.” And we are exploring ways of working with them now: customers will get a chance to get more benefits or additional promotions on top of the existing ones by using Got It. Banks usually have good marketing budgets, and they will be OK to pay if you can produce results.
This source of revenue is not that much different from search engines where advertisers are willing to pay, based on performance. You actually pay according to Ads performance.
If I own a coffee shop chain here in Bangkok, let it say in 10 different locations, and I want to become your partner. How much are you going to charge me?
Our pricing is very basic and starts from around 1000 Thai Baht Per branch per month. If it’s a large chain that has more than 200-300 stores, obviously, you will have a little bit more negotiation power. And we will work out something that makes sense for both parties.
How many locations, in total, do you need to have to be profitable?
In a short term it’s really hard to say, because all the revenue we have right now, we reinvest in building the business, into additional features.
People are asking me, how are things going as we have a new competitor coming almost every few weeks.
The challenge right now is not the competition, it’s getting brands interested in this type of tool, and it’s getting people to change their behavior. It’s about focusing on the end user, and our paying customers, not the competition.
The real question is, when will we reach the point when brands say “Oh, that’s a great and useful tool” and feel that it’s really valuable for them. And consumers get to the point when it’s easier and faster just to download Got It rather than to use a bunch of printed cars. And when they have a better experience than just a paper stamp or a coupon.
What kind of numerical results can you provide to evaluate the success of the campaign?
Each brand has its own metrics, but what we share is real performance collected by the Got It platform. There’s a self-service web tool, where businesses can log in, and they can see the amount of people each day coming in and redeeming coupons through the App or obtaining stamps.
They can see:
- How many new customers they get in.
- Top customers.
- How much customers spend.
There’s a certain amount of education, when we talk to the brands how to use that data and how to evaluate it. Because it’s digital, everything can be captured. The additional value we provide to clients, especially the larger brands, is some basic information about customers’ social profile. The majority of users is connected to Facebook. We can tell what their interests are, what do they like, that helps brands to decide where to spend their marketing and advertising dollars.
The other benefit we provide to them is, that when customers connect Got It with Facebook and they engage in a certain activity, we can post on their Timeline. That’s additional exposure for the brand that potentially could be viral if it’s a clever sort of campaign. And it’s a more cost effective than Facebook Advertising.
Can you name the most successful campaigns that you had?
We try to position ourselves as a neutral platform, the effectiveness can be enhanced by work we provide, but a lot of it depends on how attractive the promotion is. Just an extreme example, if it’s “Buy 1 get 1 free” versus “Buy 50 and get 1 free”, obviously the first one will be more attractive. We try to work with merchants and create the promotions, but because we position ourselves as a tool, we can only consult to a certain degree. It’s ultimately up to the marketers to decide what promotions they want to launch.
A funny story about one promotion that was a lot more effective than I thought it would be happened with a campaign of Hokkaido Milk. They have 30+ locations in the malls around Bangkok, and the promotion was getting a stuffed doll. If you collected 10 stamps you could purchase the doll for 100 Thai Baht, and if you collect 20 stamps you could get the doll for free. When I first heard what the promotion was about, I throught to myself “wow, nobody is going to be interested in it!” but you know, I’m not their target market.
Their loyal regular customers are moms with kids, and they buy premium milk for their families and their children. A doll that is just cute, they can give it to their kid. And, finally, we had huge activity for their promotion.
One more interesting case happened with the second promotion we ran with McCafe. The first one was a discount offer for ice blended drinks that did quite well. Then after a little break we did another promotion with them that I thought should be going well too, as it didn’t overlap with any of their other current promotions. It was for hot beverages. Personally, when I go to the coffee shop in Thailand, I usually take a hot beverage, for example, hot tea. Apparently, most Thai people are different from me, and prefer cold drinks (not a big surprise in hind sight). Even though it was a good discount, the hot beverage promotion didn’t deliver the same results as the first one with blended drinks.
A lot of it comes down to the price and how attractive the price is to the target market of that particular brand.
In Thailand there are always promotions going on with AIS, True, or Dtac, and promotions with your credit card, etc. So many people are de-sensitized to promotions.
Unless you have something really attractive, something that doesn’t happen very often. It’s sometimes difficult to get people excited about it.
One more example. Starbucks usually doesn’t discount anything, and recently there was a campaign during certain days of the month, during certain hours in the afternoon: Buy 1 and get 1 free. And I always knew when those promotions occured, because the line was out the door.
We really have to work with the brands in order to come up with promotions appealing to their target market.
After having such interesting experience, you could create a manual of how to make an efficient promotion for coffeeshops and FMCG companies!
You mentioned that you have different types of promotions. How do you usually notify and update Got It users?
Since the beginning we have push notifications. Even if someone has his App closed, we can still notify them about new promotions in the system. We also have automatic alerts: When a particular promotion is one month away from expiring, you get a notification. If it’s a loyalty type of card, which might have different expiration dates, depending on that specific customer, they will be notified as well. That’s one of the methods, push notifications.
Emails are still a thing that people use on a daily basis. One more thing we are planning to do now is use Newsletters and Email Marketing. When people register through Facebook or just link their account with it, we get their email addresses.
How many people do you have in your team?
We’ve got nine team members, but not all of them are full time. Everything is in house, and that is one of our advantages. When there is a business opportunity or a potential client has a request, we can quickly react.
We also have one person who is entirely responsible for PR and overall business development. We have been bootstrapping so we don’t have the massive budget for traditional mass marketing. We’ve also avoided buying Likes or app installs because we feel those don’t directly lead to increased revenues.
A lot of Got It team members have their own projects and businesses, how do you organize your work? How many meetings a week do you have? How do you communicate with each other?
We see each other at least once a week, because a lot of us do have other commitments. For a year and a half we have been working one full day together, every Saturday, at the library of my condo(borrowing my neighbour’s Wi-Fi). We also meet online in the evenings, if we need to. We tried a lot of different collaboration tools, but currently we use Basecamp, Google Hangout, messaging apps, and Emails.
It’s also fortunate, and amazing, that after meeting at the Startup Weekend 2011. All of us stayed together for 1,5 years. And it’s lucky that we have all the complementary skills and enjoy working with each other. We have a good time.
Can you share any tips how to increase the number of downloads of your App?
What we did is to partner with strong brands that understand the value we brought to the table – providing the platform that they might rely on, in terms of their marketing. For example, our team was formed at Startup Weekend 2011 sponsored by AIS. And as we were among the winners, AIS helped us a lot in terms of media exposure: They introduced us to some reporters, bloggers, they had some events where they had their own booths, and they allowed us to share it. That put us on the map and gave us credibility when talking to the big brands.
We got quite a lot of users from displays in the stores through the larger brands. The early approach was to try to find strong partners because the funds we raised were used for business development. We wanted to be sure that the product worked. There was attraction, people were coming back and using Got It before we put money into marketing. If you really have a good product, people will stick with it.
There are pros and cons doing it both ways, it always a questions whether to invest a lot in marketing and trying to get lots of people to download your App, and then improve it afterwards, or make all the things work, make people like the App, and afterwards pour money into marketing.
In reality you need to do both at the same time but shift resources depending on the current situation.
Can you tell us how AIS helped you?
It’s quite different when you knock on a door and say “I’m Sid and I have this App” or “I’m Sid and I have Got It supported by AIS”. In the latter case you have people’s attention. It reduced the amount of work we had to do in convincing brands we were a legitimate service provider.
AIS has reached the next level with their new startup weekend called AIS The Startup that is really impressive. They have a lot of new mentors, and they have a bigger budget now. They are seriously trying to incubate those startups and help them grow. With us, with the first generation, the support was a little different.
We dealt mostly with the event organizers, and their team was essentially a startup within AIS, so they didn’t have a big budget. Our success, along with the success of others in the first generation, helped them justify growing their program.. We have a couple of contacts within AIS, we are still talking to them and they are still interested in the helping us when possible. For example, they have an investment fund called Invent that invested in Ookbee, and they helped to arrange a meeting with the Got It team and their representatives several months ago.
One of the main reasons, why AIS sponsored the competition, was that they realized that the future will not depend on the revenue from voice calls. They should rely more on data services and data plans: the more people use Apps, the more revenue operators have. And the strategy is to have more local Apps that people are going to use.
If you have a chance to go back in time with all the experience you have now, what would you improve in your business? What would you do in a different way?
One thing I would definitely do is to launch faster. To just make it, to cut some of the features and leave only the few basic things that work. The reason I would do that is because quite quickly after we launched some other player launched as well. I wish I could say that they copied us, but they launched too quickly after us, so it means we’ve worked in parallel. Being the first in such market gives you great advantages, for example, more attention.
How long did it take to develop the first version?
Far too long! As a business person you usually think is long, but as a developer it’s different. We launched on iPhone first, and it took us around four months to develop it.
What do you think about your competitors?
Our competitors are not really the competitors that everybody expects. The other Apps that you can consider as competitors have their merits. Everybody is doing it in different ways with their pros and cons. And it seems that market is already crowded, but I wouldn’t be surprised if somebody comes with a little bit different angle on it.
What are you looking for now, I mean in terms of investments or marketing?
We are splitting into two areas now. First, is to continue working on Got It and extend our offering of tools to merchants to engage their customers and work with them on a long term basis. Also, we are working with those third parties, banks that issue credit cards, which have the budget to provide us with another source of revenue. It’s all going well, but it’s not generating as much revenue as we want to generate.
The other thing we are looking at is extending either the product into a related direction, or come up with a totally different product that is more international in appeal and has potential to grow bigger. One of the challenges with this business is that it’s still based on face to face negotiations and business development, and that can’t scale fast.
You need to do something like Ensogo did, to be successful – hire really large sales force that goes to knock on the doors and grow quickly.
But I’m not sure if that makes sense for Got It, because even if we do that I don’t know if the potential market is big enough.
We’re exploring completely different business ideas for now. And if we find it, we might be able to scale much quicker, and it will be a business that can be applied not only within Thailand. In our team we feel that we can build anything driven by our imagination.
Our vision is to create world class products and all of us are platform minded. We want to create an ecosystem, where we enable others to generate revenue. People are glad to pay when you help them generate revenue and grow their business.