Acquisition project | Rapido

Introduction

Rapido is a household name today, but predominantly as a bike taxi platform. Rapido Auto services were launched 5 years ago and cab services a year ago. I have chosen Rapido Auto marketplace for Bhubaneswar as my project. In Tier 1 cities, Rapido Auto would be at the mature scaling stage, but the reason why I have tagged it as an early scaling stage is because the penetration of the category is 29% which means there is a lot of room to scale up. Also, customer acquisition campaigns were done predominantly during city launch and then sporadically a few times over the past 5 years. Also Rapido Auto just owns 15% of the market share as well. These are the main reasons why I chose it to be at the early scaling stage.

Why acquisition is important at the current stage

In January 2024, the market was facing poor quality of supply, leading to a lot of frustrated customers and in turn high churn. This was solved by running multiple initiatives to improve the overall quality of supply leading to better fulfillment levels. This has led to a new challenge of lack of demand for the current base of supply.
Monsoons are expected in early July, which means some customers will step out only if they need to, resulting in a dip in rides. Thus, adding more to the ToFu will help me maintain my marketplace if not scale up during the monsoons. These acquired new customers will help me scale up the market post monsoons through the festival season and New Year's.

TAM

I have calculated TAM from a supply point of view.

Total number of registered autos (data from RTO)	27,000
Average ticket size (internal data)	108
Average daily income needed for a captain (from captain VoC)	1200
Expected number of rides in a day per captain	1200/108=11
Total number of rides in a day if 25% of autos run in a day	(27000/4)*11=74,250

From the 25% of autos that run in a day, there are many routes where these autos run in the shared ride concept, which according to captain VoCs, contributes to half a day's work. This makes my SAM, 74,000/2 (for half the day) = 37,000. Targeting a 25% market share, my SOM would be 9,250 rides per day. With the current run rate, this can be made possible only through customer acquisition, customer retention, and improved customer repeat sales. For my project, we will discuss customer acquisition alone.

Growth avenues - Use Cases

Bhubaneswar is an upcoming IT hub in India. We have seen a considerable number of companies investing in the area. According to my research, 3 major IT parks are hosting over 40,000 employees. Office commute is a top use case in the city.
10 major hospitals span across Bhubaneswar, which includes the famous AIIMS Bhubaneswar and KIMS. It is estimated that these major hospitals have a daily average footfall of 20,000. We want to target only OPD patients for acquisition, the footfall across these 10 hospitals for OPD is around 15,000 every day. Another observation is that around 60% of these patients are from lower-income backgrounds.
Bhubaneswar boasts a top range of educational institutions, like the IIT, XIM, KIMS, etc. Considering top schools, colleges, and other educational institutions, over 60,000 students study here. Considering a fair average of 10:1 ratio for student: faculty (and other staff) which takes the count to over 65,000.
Bhubaneswar has 4 railway stations and 6 major bus stations. The average footfall through all these hubs is over 1,50,000 every day.
Apart from these major use cases, commercial spaces across the city catering to the young and growing IT crowd, other marketplaces for wholesale business, people out running errands, etc. also will add to this list.

Challenges

The budget for ATL or BTL campaigns is very minimal as we just concluded the IPL Campaign.
We are operating as a SaaS model, which means we are currently a demand discovery platform for auto drivers, thus we do not take any money from any transaction between a customer and a captain. This removes the levers of discounts.

ICP

	ICP1	ICP2	ICP3	ICP4
Who	Employee	Parents traveling to the hospital either alone or taking a family member	College Student	Outstation Traveller visiting Bhubaneswar
Age	21-30	30-60	16-20	20-50
Income	20-50k /mo	household income <30k /mo	Pocket money - monthly 5k	<50k /mo
Occupation	IT	Any	Student	Any
Lives with	flatmates, family	Family (dependants)	Parents	Alone or with flatmates in Bhubaneswar
Dependant	No	No	Yes	No
Where do they spend most of their time	40-50 hours on weekdays at work. 8-10 hr over the weekend out with friends at commercial spots like malls, cinemas, and restaurants. Free Time - Instagram, FB, LinkedIn, OTT, youtube	60 hours a week at work Weekends are spent at home or shopping for provisions and essentials. Free Time - FB, Instagram, TV	30-40 hours at college Weekends - chilling with friends, Tuition centers, Sports/extracurricular activities Free Time - Instagram, FB, OTT, TV, youtube	If he is working in Bhubaneswar, 60 hours on weekdays, and weekends he would go back. If he is visiting someone, then at their place predominantly but also at restaurants, malls, and other marketplaces. If he is attending a function then at the venue.
Where do they spend their money?	Rent, Food, Commute, Entertainment, emis, SIPs.	Rent, emis, provisions and essentials, commute, kids fees, medical bills.	Study material, phone recharge, commute, snacks, movies	Commute, food, lodging.
Options for Commute	Own vehicle, with a friend, offline auto, online auto/bike, Bus.	Borrowed vehicle, Auto - offline and online, Bus	Walk, cycle, bus - public/college, with a friend on a bike, bike taxi, auto-offline/online.	Bus, auto, cab, traveling with the friend he is visiting.
Frequency of rides	4-10 times a week	1-3 times a month	10 times a week	At least twice a week but can go up to 5 to 6 times a week.
Pain points	Generally wouldn't have enough money or salary bracket to get an own bike. Depending on a friend comes at the friend's convenience. Offline auto drivers ask for exorbitant amounts and have to haggle. Busses take too much time.	A borrowed vehicle is always a risk, in terms of damage and then the incurred costs. Busses take a lot of time. Offline auto requires you to go to the nearest auto stand or wait in front of your home expecting an auto to come up soon, too random.	Walking and cycling are tiring. Busses are scheduled and take a lot of time. Bike Taxi looks cheap.	With luggage getting in and out of buses is a task. A lot of luggage means a cab, which is expensive.
Top priorities while choosing a ride	Affordability and availability	Affordability and availability	Status and availability	Affordability and availability

ICP Prioritisation framework

	Adoption Capacity	Frequency of Usage	Appetite to pay	Distribution potential
ICP1	Very High✅	High✅	Very High✅	High✅
ICP2	Medium	Low	Medium	Medium
ICP3	Very High✅	Very High✅	High✅	High✅
ICP4	Medium	Medium	High✅	Very High✅

Based on the framework above, taking adoption capacity, frequency of usage, and the appetite to pay as the top priorities, we can conclude that ICP1 and ICP3 qualify.

Core value proposition and JTBD

The core value proposition: easily available commute options at affordable rates. In similar terms, JTBD would be able to reach point A from point B faster and economically.

Current Acquisition Channels

Currently Paid Ads through Google is the only channel we use. There is no strategy behind this and we allow Google to run its algorithm without any direction from us. On a weekly average, we generate 500 FTUs (First Time Users) at a CAC of 100. Organically through word of mouth, we get a weekly FTU count of close to 3000.

Acquisition Experiments

1 - Paid Ads

43% of the organically acquired customers do at least one ride whereas only 17% from Google do. This shows that the customers generated from Google are not from the right TG. A better-designed and targeted campaign could improve the conversion numbers through Google Ads.

The experiment: ICP1 and ICP3 spend their free time on Google, Instagram, Facebook, YouTube, and OTT channels like Amazon Prime, Disney Hotstar, and Netflix. We are going to target these two customer segments on Google, Instagram, and Facebook.

The campaign intent to increase App Installs. This is going to be done through static ads and user testimonial videos through these channels. The target audience here is between the age group of 21-30 years for ICP1 and 16-20 years for ICP2. We will target Nelladri Vihar, Patia, Chandaka, KIMS, Nayapalli, Shaheed Nagar and Phase 2 areas. Once the App Install phase is completed, we will push in-app PNs to get them to do their first ride. We will be going through this for 6 weeks and take a call after a post-performance analysis. This campaign will give us around 5000 new customers who have done their first ride with us.

Overall costs would be 9 Lacs for 6 weeks and the expected new rides from the new customers is around 5-6K. Then the CAC would be 9,00,000/6000 = 150

CAC Ratio: Expected CAC is 150. LTV would be 100 (ATV) x 20 (avg. rides per month considering 5 rides a week for both ICP1 and ICP3) x 1 (avg. churn time in months), which is 2000. CAC Ratio = 2000/150 = 13.33

The marketing pitch would be on the lines of affordability and ETA. E.g., budget rides that fit your wallet.

2 - Referral Programs

Target user stories for referrals.

5-Star rating: Post payment after the ride, if there is a 5-star rating given, we will push a 'Refer a friend' CTA button. We will give the customer a link, and upon clicking the app will send the 'Join me at Rapido' message with an app download link through WhatsApp.
Completion of 3 rides within a week: If a customer does 3 rides within a week, then there is enough reason to believe that either he is happy with the service or he has chosen us over the competition. In both scenarios, the customer is happier than he was before. Thus, before he books the 4th ride, we send him a congratulatory message 'You have done 3 rides already! you are a Rapido Rockstar! Share the news with your closest 3 friends.' With this, there will be a link to send out this message to 3 friends through WhatsApp.

For the referral programs, if the referred person downloads the app and does a ride, we will give the customer the next ride free of charge. All the referral messages will be forwarded through WhatsApp.

For tracking their referrals, we will have a referral page on the app where they can refer other friends and also track the status of the referrals. On this page, the customer has to click avail award to use the free ride and a coupon code will be generated. They will have to use the coupon to avail the free ride. There will be a referral journey tracker with these milestones; Downloaded --> Registered --> First Ride done. We have seen in previous scenarios when a lot of fraud referrals happen, thus we need to make sure the referred new customer does a ride.

CAC over here would be the ATV for the next ride which would be 100. This is less than Paid Ads but the conversion would be lesser. Usually, 10% of referrals get converted to new customers, and from that around 50% do one ride. So, out of 40,000 customers (monthly net customers), 32,000 customers rated their ride out of which we have a chance of getting 33% of the customers to refer. (NPS score was 25 for last month with 33% of rated customers giving a rating above 3, out of 5). This gives us 32000 * 33% = 10,560 referrals. 10% conversion would give us 1000 new rides. This means 1000 new customers who have done their first ride with us.

3 - Product Integration

Book My Show - BMS has over 75% of the market share when it comes to movie tickets that are booked online. Once the tickets are booked, BMS usually sends a WhatsApp message and a Google calendar reminder for the upcoming movie that was booked. In the WhatsApp message, there will be an additional message 'Reach the cinema on time' OR 'Take a Rapido Auto and spend the saved money on popcorn' followed by 'Download Now' CTA. In exchange, we are ready to provide BMS access to the Rapido app where they can advertise. Across 10 cinemas, with 5 screens on average, 4 shows a day with 120 tickets sold (200 seats available on average and 60% occupancy) we see 7.2 Lac tickets sold in May in Bhubaneswar. Out of these over 60% is sold online, which gives us 4 Lac tickets sold online. BMS has a 75% market share which means over 3 Lac tickets are sold through BMS. If we convert 1% of these to app downloads that leads to over 3000 app downloads in a month and at a 40% download to one ride conversion, gives us 1200 new customers who have done their first ride.
We are in conversation with MoBus, to integrate the Rapido App into their app to fulfill their customer's FM and LM (first mile and last mile) requirements. MoBus has over 3 Lac footfalls in a day. They cater to Bhubaneswar, Cuttack, Puri, and Konark. We are operational in all these areas. There are 13 main routes and we plan to provide FM and LM access to customers. Out of 3 Lac customers traveling on MoBus, 22% are registered on the app and using it, which is over 7 Lac customers. Our integration will be such that there will be an option to download the Rapido App on their app. This of course we have eyeballs for all three categories. We are keeping a very pessimistic conversion rate for autos to 0.5%, which still will get us 3500 downloads. Download-to-one-ride conversion is around 40%, which gives us 1400 new customers who have just their first ride.

Conclusion

Through Paid Ads we will acquire 5000 new customers, through referrals 1000, and product integration 2600. Overall giving us 8600 new customers and with a monthly RPC of 2 for Bhubaneswar Auto, we can expect them to do 17,200 rides in a month. That is a 20% increment in our monthly rides only through customer acquisition.
There are 2 more ICPs to tap into that have been listed here and probably will be done in the coming quarters after we see the results of this new acquisition program.
Apart from these campaigns, we will also be looking at doing BTL campaigns like OOHs, TV ads, and localized branding events throughout the city once budgets are approved.