The food and grocery delivery market in Iraq has seen a significant increase in recent years, with a growing number of customers turning to these services for their daily needs. However, retaining customers in this market can be a challenging task, as competition and perks increase.
Why Customers Switch
One of the main reasons customers may lose interest in a delivery service is due to poor service. This can include issues such as late deliveries, wrong orders, or poor customer support. To prevent this, companies must ensure that their operations are efficient and reliable, and that they have a strong customer support team in place to address any issues that may arise. For instance, they can use efficient logistics and delivery processes to ensure timely delivery of orders, and also have a dedicated customer support team to handle any complaints or issues that customers may have.
Another reason customers may switch to a competitor is due to a better deal or offer. What companies must realise is that the switching cost for customers is almost zero. Customers only need to download a new app and place an order. This means that food and grocery delivery companies must work hard to retain their customers by providing excellent service, competitive prices, and a convenient user experience.
How to Retain Customers
To counteract this, companies can offer discounts, loyalty programs, and other incentives to keep their customers engaged and interested in their service. They should also keep an eye on their competitors to see what offers they are providing and adjust their own strategy accordingly. For example, they can offer discounts on the first few orders to attract new customers or offer loyalty programs for repeat customers to encourage them to stick with the service. These types of discounts are particularly useful for companies entering a new city, as they can help to establish a customer base and gain a foothold in the market. Talabat did this heavily once they entered Iraq, and the internet was complaining about their ads!
Another effective strategy is to offer a wide range of products and services. Customers want to have a variety of options to choose from, and by providing a diverse range of products and services, companies can cater to the needs of a broader customer base. For example, a food delivery service can expand its offerings to include groceries and household items, making it a one-stop shop for customers’ daily needs.
Another strategy for customer retention is to provide a convenient user experience. This includes having a user-friendly app or website, making the ordering process simple and hassle-free, and providing easy payment options. Companies can also use technology such as chatbots or AI-powered assistants to provide instant assistance to customers, further enhancing their experience.
Free deliveries are also an effective strategy to retain customers. This can be particularly useful for companies that operate in a crowded market, as it can help to differentiate them from their competitors and offer an added value to customers. For example, they can offer free deliveries for orders above a certain amount or for repeat customers to encourage them to stick with the service.
Lastly, subscriptions like Lezzoo Flex are a good way to lock-in customers and ensure a steady stream of revenue. Subscription models can be particularly useful for companies that offer regular delivery services, such as grocery delivery. Customers can sign up for a recurring delivery schedule and receive a discounted price for their orders. This can create a sense of loyalty among customers and encourage them to continue using the service.
Each retention strategy is used for a certain goal, for example, per order incentives are useful for acquiring customers when entering a new market or city, or keeping customers from moving to competitors. Whilst loyalty programs are designed for long customer retention. It’s important to consider using a combination of these strategies as different customers may be attracted to different incentives. For example, a new customer may be attracted to a one-time discount, while a regular customer may be more interested in a loyalty program. It’s also important to consider the cost of these strategies and ensure that they are profitable for the company while also providing value to the customer.
The food and delivery space is becoming crowded as ride-hailing apps Careem and Baly are also offering delivery services. Many of these companies spend a lot of money on marketing their offers, but not enough on the user experience (UX) of redeeming those offers within the app. This can create a disconnect for customers, as they may have a hard time understanding or using the offers they have received.
As an example, if a loyalty reward is automatically applied at checkout without the customer’s input, it can be confusing and frustrating if they wanted to save the reward for a future order. Similarly, if the process of using a promo code is not straightforward, it can be difficult for customers to take advantage of the offer. This lack of investment in the checkout pages and UX of offers in the apps can lead to a poor customer experience and dissatisfaction with the service. It can also lead to a lack of customer engagement with the loyalty program or offers and ultimately lead to lower redemption rates, which negatively impacts the ROI of the loyalty program or offer.
It is important for companies to invest in the design, testing and optimisation of the UX of their apps to ensure that customers have a smooth and easy experience when redeeming offers. This can help to increase customer satisfaction and engagement with the loyalty program or offer which ultimately leads to increased retention. For example, Toters’ loyalty rewards are applied at checkout without the user’s input, and the same can be said about most of these companies. Careem’s promo code usage is also not very straight forward.
Having lots of retention strategies does not qualify you to win the customer. The smooth integration with other systems (customer support, partner apps, accounting, reporting and data points) is what gives you insight on what is working and what’s not, and what to do next.