So Zomato launched Gold yesterday and within a day, Zomato has sold
31,000 40,000 memberships (it is now sold out).
Assuming a mix of 50-50 (i.e. 50% taking up 299/ subscription and 50% 999 (annual) subscription), Zomato made Rs. 2.5 crores.
Zomato Gold is an exclusive dine out and social drinking membership program that extends special perks like – a complimentary dish (think BOGO!), and up to 2 complimentary drinks (think happy hours all the time), every time you dine at, or hit the bar at any of our partner restaurants in India. Gold can be used at our partner restaurants and bars in a very limitless way – i.e. on any day of the week, at any hour of the day – on the entire menu – any dish or drink on the regular menu (blog/link)
That is ~Rs 2.5 crores – in real cash for a service which hasn’t been rendered yet.
And no payout to any restaurant has been made.
To me, this is one of the finest execution of a subscription (virtual) product at scale.
Can you also do this for your business? That is, run a subscription business which sells like hotcake?
Well, here are a few things that Zomato did it right.
1. Sell what people need (Everything else is BS).
And not just what you can sell. Most companies sell what they can and not what customers want. Find the fit and do the grill.
People love to eat outside – this is the most basic human need and Zomato has been enabling the same for many years.
Compare this with several kickstarter/indiegogo products – which are fancy, but don’t get enough subscribers. Why? Because they don’t sell what people actually need.
Zomato actually sold the notion of ‘free’ food to people.
2. The psychology of FOMO.
First 10,000 subscribers will get it for a discount amount. And then, a little bit more and more. The team kept increasing the number (now it is 35,000) – smart move to keep it exclusive, test the waters, create FOMO (Fear of missing out) and let the laggards catch up.
Zomato could have said ‘only 4,000’ remaining, but that won’t have given the correct picture of the largeness (of the total subscription numbers).
Only 4,000 remaining out of 35,000 subscriptions creates much bigger FOMO than just saying 4,000 remaining (out of what? 4,001?)
Smart social media integration helps build the noise – which translates to more FOMO. When you see your friends talking about this on social, you are bound to give it a try and buy the discounted offer.
Note that this isn’t a one-day effort, the subscription launch page actually went live on Nov 8th, giving the team enough number of (pre-launch) subscribers – which they could reach out to on the launch day.
It is a steal ?
Prices will go up in a day or two. First 10,000 memberships will be sold in a couple of hours at the current pace.
— Deepinder Goyal (@deepigoyal) November 14, 2017
The referrals actually helped the deal go viral. Zomato offered 1 month extra to users for each referral they receive, and anyone who signed up with a referral code got 25% off.
This is, nicely integrated with the product – and wasn’t a standalone experience. Importantly, the referral code was only for the ones who have already bought subscription – so there is a certain degree of credibility (and eat the dog food) built in.
This is how FOMO probably would have looked like (until they decided to just buy the damn subscription).
TL;DR: What can you learn from this quick success of Zomato Gold?
- Sell what people need.
- Create FOMO.
- Sell to the rich.
- Build a great experience.