📯 Engagement & Retention project | Urban Company

📯

Engagement & Retention project | Urban Company

Product

This section covers the product overview, the core value proposition, the best engagement framework to use, and the natural frequency.

Urban Company is arguably one of the most pioneering home service products in India. Started in 2014 under the brand name UrbanClap, which many customers still fondly refer to, today, the company has a massive customer base of 5 million worldwide with INR 637 crore in revenue and a new name, Urban Company!

They currently service India, UAE, Singapore and Kingdom of Saudi Arabia. 90% of their revenue comes from India and the company has become a monopoly business here.

They can be a poster child for Kunal Shah's delta 4 theory. Let's compare Urban Company to the old model of ordering home service:

Remember all the hoops you had to jump through to get a carpenter or a plumber to your house back in the day?

Find the person to get the job done (carpenter, electrician, plumber). Either via WOM, searching on Google or physically going to the nearest hardware store.
Call the person, find out their rate, when they can come, and how much time it would take.
Agree with them on time.
Wait for them to come home after a series of calls to check where they are, guide them to the right address, etc.
They would arrive, do their work, go out to get the additional parts required, etc.
After the world is complete, we would generally argue and haggle over a price.
Pray the work is done in earnest, and take the person's number just in case and for the future.

The above process had many issues:

It would take hours/days to get the work done
There was no guarantee that the person would actually come on time.
They were not guaranteed to get the work done.
There was no way to see how good a professional was; no reviews existed.
Prices were not standardised.
There was no visibility into supply.
Cash was the only medium of payment.

When Urban Company took over, they changed everything. A few clicks and you would have access multiple services with standardised prices and reviews. Payments moved online, and the focus shifted towards delivering quality service.

The user experience is so superior with Urban Company that it is very difficult for the customer to go back to the old ways of doing things.

Core value proposition:

The core value proposition of Urban Company is to provide on-demand, quality home services.

Today, Urban Company offers a multitude of standardised services with reliable and trained professionals. Think of any service you may need at home and they have you covered.

Solon services for men and woman
Appliance repair
Electrician, Plumber and Carpenter
Cleaning
Painting and waterproofing

They have improved the quality of supply by providing training, standardising processes, enabling customer review and ratings creating a showcase of their proof of work that did not exist earlier.

The key aspects of it's value proposition are:

Convenience: Access to a wide range of services
Time saving: Booking and payment through app in a few clicks
Trust: Training, background checks, ratings
Reliability: Delivery high quality service

Customers consistently experience this core value by:

Repeatedly booking a variety of services for their personal care and home needs.
Trying different offerings from the company.
Paying and renewing their premium membership.

Among the customers surveyed, the brand recall value of Urban Company is incredibly strong. Not many could even name a single competitor.

Urban Company is a need based product. So the natural frequency is highly dependent on the need that the customers have for a particular service type.

Solon services for men and woman: Once every 1-2 months
Space services: 1-2 times every 3 months
Appliance repair/maintenance: 1-2 times every 6 months
Electrician, Plumber and Carpenter: 1-2 times every in 6 months
Painting and Waterproofing: Once every 1–3 years

From surveys, we have found that customers who pay for a membership have a high affinity to come back to the app to book and try new services because of the cost savings and quick service.

What is the best engagement framework for Urban Company?

Engagement Framework	Key Tracking Metric	Selected	Rationale
Breadth	Number of different services a customer users	Secondary	Increasing the number of use-cases a customer has with the app will greatly increase engagement, lead to more top of the mind recall and then lead to an increase in natural frequency.
Frequency	Number of times the customer uses urban company for their needs	Primary	The more times the customer uses the product helps them understand the core value prop.
Depth	The number of time a customer spends on the product.	NA	UC is purely a need based app there is no need to track dept of engagement. It does not add value.

E&R Metrics

General users

Booked at least 1 service a month (Power user)OR
Book at least 1 service a quarter (core user) OR
Book at least 2-3 services a year (Casual)

Premium Users

Subscribes to a membership
Renews membership once it expires.

Customer Segmentation

User Interviews: A total of 12 customers were interviewed, below is a summary of 3.

Name	Akshay the casual user	Ali the Core user	Shelly the Power user
Age	30	28	34
Lives with	Wife	Alone	With husband and kids
Urban Company User Since	2018	2020	2019
UC products used	Electricians & Plumbers mostly repair services	Salon services Cleaning services	• Womens salon • Massage • AC repair • pest control • Cleaning services
Notifications from UC	Turned off	In scheduled summary/Turned off	Turned on
Uses UC	Once in 6 months	1-2 times every 3 months	Every month Salon(Only when the 3 professionals they like are available) House cleaning every month or every 2 months Massage once in 3 months
Average spend	INR 300-500	INR 500-800	INR 1000-2000
Need vs Discovery based use	Need	Need	Need
What they value most	Hassle free service no negotiation required, granularity in terms of choosing what repair work is needed, clear and transparent pricing	Convenience and ease of use	Sending people within a day for any kind of work Read reviews Good customer service Good payment portals no issues
Features not liked/ Not valued	-	-	Internal inventory of UC expensive. Specifically for repair parts.
What keeps her engaged	Repair services	Salon services	Salon and spa services
Feeling when service was used last time	Relieved	Piece of mind	Happy
Recommends service	Yes	Yes	Yes
UC Exceeded expectations	Last time the plumber was called, showed up on time chosen and provided a seamless service.	Last time the bathroom cleaning was done really well	Last time when haircut was used. Loved the setup and thought put into detail specially the cleanliness
Frustration	None	None	Last salon booking, partner gave services more than what was booked and then at the end quoted a different amount. 2x of the original. Complaint raised to UC.
Used any competitors	Local vendors, cannot recall any competitors	Local vendors, cannot recall any competitors	Local vendors, cannot recall any competitors
How much better is UC compared to the competitors	Way better	More convient	More reliable
Features they would like to see in UC	Catering services	B2B services Tie up with brands for post sales services like TV, AC, washing machine tec	Let customers use their own inventory for parts. No minimum cart value Mani and Pedi with friends. Group spa session Gift cards
New features they are planning to use more often	Cleaning services	-	Cleaning services
Anything UC can do to improve their overall experience	Nothing as such	Nothing such	Current experience is great
What will force you to leave the company	Only if there a real big problem with the service	Nothing as such	If plumbers, carpenter and electricians become more expensive.
Do you consider yourself a loyal user	Not really	Yes	Yes
Hoe often they require appliance service at home	1-2 times a year	1-2 times a year	1-2 times a year
How often do they require electrical services at home	1-2 times a year	1-2 times a year	1-2 times a year
How often do they require plumber	1-2 times a year	1-2 times a year	1-2 times a year
How often they need carpentry services?	1-2 times a year	1-2 times a year	1-2 times a year
How often do they go to the Salon and time invested	Every 1-2 months, 1 hour	Monthly, 1 hour	Monthly, 1000, 2 hours minimum
How often do they go to the Spa and spend and time invested	once in 6 months, INR 3000-5500 for couple, half day activity	Once in 3 months, INR 1000-2000 spend, , 2 hours	Every month, INR 1500-4000, 2 hours
How often do they get their house cleaned? Need external services	Festival deep cleaning by local help	1-2 times a year using UC	Every day by house help at home. Monthly Toilets deep cleaned by UC Home deep cleaning only during festivals
Last time thought of using UC but did not use	Wanted to call plumber but then was recommended someone by the society	Had called for barber nut cancelled as the professional was late	Tried to call for painting but quote was too high
UC membership	No	No	Yes
Booked service for someone else	Yes for family	Yes for family	Yes for family and friends
Most used times	No specific times	No specific times	Start of the month and weekends and during need

Summary of casual/core/power

	Casual	Core	Power
Who	Use UC only when their primary service provider is not available	Has preference uses UC for some services and local vendors for others	Uses UC as their go to for all possible services
Services they use	AC cleaning, Sofa cleaning, bathroom cleaning, Repair services	Salon, Spa service, bathroom cleaning, and and repair services	Salon, Spa service, bathroom cleaning, repair services
Frequency	1-2 times every 6 months	1-2 times a quarter	1-2 times a month
UC member	No	Maybe	Yes
Average Spend	INR 500	INR 500 - 1000	INR 1000+

Engagement Campaigns

giphy (27).gif

The overarching goal of these campaigns is to:

Move Casual users → Core
Move Core → Power
Keep power users engaged and reward them for their loyalty

Campaign 1: Move Casual to Core users

Goal: Expand service usage

Pitch: Don't just clean, pamper! Enjoy a relaxing spa treatment at home, use code PAMPERME20 and get 20% off your next spa service!

Channel: Push, Email

Offer: 20% off next spa service, valid for 30 days.

Frequency: Monthly

Timing: Select user with low usage history and send them notifications

Metrics: Open rate, click-through rate, redemption rate, increase in booking by these users for other high frequency categories

Alternate copy for Campaign 1 above:

Hey handsome, Planning a stress free weekend? How does a haircut, massage, and a 20% discount sound? Use coupon code #urbanman20 on all men salon services

Campaign 2: Move Casual to Core users

Goal: Build a Habbit

Pitch: 5 stars dekar aapne, aise khushi hamein dedi, Toh isiliye aapke next booking pe 30% off on mani and pedi!

Channel: In App, Push, Email

Offer: 30% off Spa service (Manicures and Pedicures only). Offer valid for 30 days.

Frequency: Once after 5 star rating of the last booking

Timing: Immediately after booking

Metrics: Open rate, click-through rate, redemption rate, increase in booking by these users for other high frequency categories

For campaign 2 above, here are alternate pitches.

Khush toh aaj bahot honge tum, Jo karaya hai ghar baithe facial, 30% off aapke next purchase pe, kyunki 5 stars rating ne humein kiya emotional

Campaign 3: Move Casual to Core users

Goal: Build a habbit

Pitch: kya khoob lagti ho, badi sundar dikhti ho, fir se book karo, karte raho, kyunki agle 3 salon services pe 15% off! Offer valid for 90 days.

Channel: In app, Push, Email

Offer: 15% off the next 3 salon services to be consumed within 90 days!

Frequency: On Friday for 2 weeks

Timing: Identify users with low usage history and start campaign.

Metrics: Open rate, click-through rate, redemption rate, increase in booking by these users for other high frequency categories

Campaign 4: Move Core to Power users

Goal: Increase frequency and service package usage

Pitch: Chasing deadlines, exercise, investments, and the next promotion! Phew! life can get exhausting, let us take care of your home while you take care of your life. 20% off cleaning & repair services.

Channel: Email, App Notification

Offer: 20% off on cleaning and repair services. Use within next 45 days.

Frequency: Two times with a difference of 7 days

Timing: First one immediately after last booking

Metrics: Open rate, click-through rate, redemption rate, increased frequency of booking by core users.

Campaign 5: Move Core to Power users

Goal: Increase frequency and service package usage

Pitch: We prioritise you! Here is a free 60 day trial of the the premium membership free with your next order.

Channel: In App, Email, Push

Offer: Get free UC membership with next purchase. Purchase has to be above INR 1000, all membership perks apply to same order. Offer last for 10 days

Frequency: Once every 5 days via email email and push

Timing: 30 days after last order via push and email, Immediately in app after last purchase.

Metrics: Open rate, click-through rate, redemption rate, conversion from free to paid UC membership

Campaign 6: Keep Power users engaged

Goal: Reward for more usage.

Pitch: Buy 2 get 2 free, buy 2 massages and get 2 more on us. Use code WELOVEYOU2!

Channel: In app, Push notifications, WhatsApp

Offer: Buy any 2 massages and get 2 massages free.

Frequency: Once very month

Timing: 15 days after last booking.

Metrics: Open rate, click-through rate, redemption rate, top line revenue contribution by Power users.

Campaign 7: Reward Power users

Goal: Get them to use more premium services

Pitch: You go girl! Get luxe at the cost of classic. Upgrade your next 2 salon treatments to Luxe.

Channel: In app, WhatsApp, push notifications

Offer: Free upgrade to luxe for the next 2 salon bookings, offer valid for 60 days.

Frequency: 3 times after every 7 days.

Timing: 25 days after last salon booking

Metrics: Open rate, click-through rate, redemption rate, more user of luxe services

Retention Design

Based UC's 2023 Annual Report: Source

Total transacting users: 5.3 million
77% of the revenue came from repeat users.
23% of the revenue came from new users.

Retention Curve Calculation

In the consumer transactional services industry, 30% is considered good retention, and 50% is considered great.
1. Source
2. Considering UC is a monopoly business in India and quite huge in terms of number of users, I think it is fair to assume that they have retention rate of about 25%
3. If we compare this to a nice business with small user base, it would have a higher retention rate of about +40%
As with all applications, in M1, retention falls sharply.
Here we assumed that M0 starts with 100% customers, and then we see a steep fall of 50% in M1 in line with the general industry wide retention rate fall in M1. (Based on experience)
From here on, we assume a steady decline of roughly 10% until the curve normalises to 25% in M6.
In reality, the decline will not be exactly 10% per month, but for the sake of this exercise, this is a good assumption.

UC has many service lines, each driving their own retention. The chart below is an aggregated view of all services based on Industry averages and best guess. From customer calls, we know that Salon and cleaning services have the most retained users, followed by spas. repair of all sorts and so on.

Which ICPs drive the most retention?

Nuclear families
Women and men needing salon service

What acquisition channels drive users to retain better?

WOM
Social Media
Digital Advertising
Television commercials

What sub-features drive the best retention?

Salon services
Home cleaning
AC repair
Spa

Reasons for Churn

One of the most interesting reasons for churn for UC is that once a customer get's a service from a professional, they then convince the professional to directly serve them in the future by bypassing the app. This way, the customer get the service at a 15-20% discount, and the partner gets a quicker payment.

giphy (29).gif

Top reasons for churn

Data sources: user interview call, app store reviews, trust pilot reviews

Voluntary	In voluntary
Price Sensitivity	Moved cities where UC is not available
Minimum Cart Value Restriction	Moved countries with no UC services
Long service wait times	Moved cities where supply is limited
Professionals are not available at desired time	Better offers on competitor apps like No Broker, MyGate, other niche companies
Bad experience with a booking
Bad customer service
Incorrect charge
Refund not completed
Partner professionals quoting extra money outside of UC app
Customer soliciting partners for direct service
Rude partner professionals
Bad after sales service

Negative actions to look for

Low service rating
Low app rating on play store and app store
Support tickets increase
Booking cancellations
Cancellation of the UC membership
Total number of bookings is reducing
App fore ground and background behaviour resulting in drop at checkout
Drop at payment page
Saved cards removed
Negative social media posts
Notification access removed
Location access removed
Notification CTR reduced
Refund request increased
Reduction in the variety of services used

Resurrection Campaigns

giphy (26).gif

Where ever days or specific services are mentioned they are meant to be dynamic. e.g if one user is offered a discount on an eye brow service the other will be offered another one. If one campaign has "monday" in the copy the same campaign on another day will have a different copy.

Campaign 1: Minimum Cart Value Restrictions

Goal: Re-engage users who have churned due to minimum cart value restrictions

Pitch: No minimums required, eye brows karwana hain, parlor janeki kya jarurat! Just call Urban Company.

Channel: Email and Push notification.

Offer: No minimum cart value, offer valid for 15 days only.

Frequency: Once a week

Timing: 45 days after churn

Metrics: Open rate, click-through rate, redemption rate, post-campaign revenue for smaller jobs.

Campaign 2: Long wait times

Goal: Win back users frustrated with long wait times

Pitch: We have improved our scheduling, get priority booking and 20% off on your next service - use code 'FASTSERVICE'

Channel: Email, Push notification and in app banner.

Offer: Priority booking and 20% off on next service.

Frequency: Once a week

Timing: 60 days after churn

Metrics: Open rate, click-through rate, coupon redemption rate, reduction in cancellation due to long wait times.

Campaign 3: Bad booking/customer service experience

Goal: Apologize and regain trust.

Pitch: We are sorry your experience was not ideal. Get a free service upto INR 1000.

Channel: Email and Phone call

Offer: Free service upto INR 1000. Discount automatically applied at checkout.

Frequency: Once

Timing: Single email 7 days after churn followed by a phone call to the customer

Metrics: Open rate, click-through rate, response rate to phone call (if applicable), sentiment analysis of replies, redemption rate, post-campaign revenue.