Zomato’s managed to eke out a successful loyalty program in a space that doesn’t traditionally do loyalty programs.
Zomato Treats, the company’s experimental initiative through which it was throwing in a free dessert with each order to customers who paid Rs. 299 a year, now has 50,000 paying users. Treats is live in Delhi NCR, Mumbai, Bangalore, Kolkata, Chennai, Pune, and Ahmedabad, and subscribers get a free dessert when they order from a selection of 2,500 restaurants.
— Deepinder Goyal (@deepigoyal) October 26, 2017
Zomato Treats seems to have made quick progress — just this July, it had reported to having 10,000 customers. Treats clearly has a market, but it’s not a strategy that other food tech companies have tried. None of Zomato’s competitors, such as Swiggy or Foodpanda have a comparable offering, and even Dominos, which has been delivering food for over a decade, doesn’t give people incentives to keep ordering from its service.
But Zomato Treats seems to be working. It probably helps that instead of giving a monetary discount, it gives users free dessert, and ends up feeling more like a club and less like a commercial scheme. And it sets Zomato apart from other food delivery services — given a choice between ordering from Zomato or a competing service, Zomato Treats customers would almost always choose Zomato, thanks to the free dessert.
That probably is the whole point of Zomato Treats — each new customer who signs up is one fewer customer for Zomato’s rivals. Food delivery services have become fairly indistinguishable over the last year, with the three main companies offering similar user experiences, prices and delivery times. Zomato Treats positions Zomato as distinct from the rest of the pack in a way that foodies appreciate.
And building loyalty programs is a proven strategy for firms to deal with similarly-placed competition. Amazon Prime has helped Amazon get a leg-up over both e-commerce firms and traditional retailers, and Zomato Treats could help it make its mark in the crowded food tech space.