🛻 Monetization project | Porter.in

🛻

Monetization project | Porter.in

Understand the users and the product

ICP

Porter is in the business of providing on-demand, intracity goods transport for small and medium enterprises (SMEs).

Porter is present in 20 cities in India and 2 international countries (UAE, Bangladesh).

Porter has goods vehicles ranging from 2w all the way to 14ft trucks.

ICP Parameter	ICP 1: Small SME without vehicle	ICP 2: Medium SME with vehicle	ICP 3: Retail	Enterprise	Specialty
Industry	Furniture, Textiles, Retail, Wholesale	Chemicals, Cement	Personal use	Automobile	Milk, Newspaper, Oil
Age	20 - 40 years	30 years - 50 years	15 - 40 years	30 - 45 years	20 - 40 years
Gender	Male	Male	Female / Male	Female / Male	Male
Location	Market area	Market area	Residential	Outskirts, Industrial area	Mixed
Turnover	< 25 crore	25 to 250 crore	Annual Salary ~10 to 50 lakh	250 crore+	25 to 250 crore
Apps	WhatsApp, Facebook, Khatabook, PhonePe, Excel, Maps	WhatsApp, Facebook, Tally, Excel, Maps	WhatsApp, Facebook, Uber, Ola, Maps	SAP, Oracle, MS Office, Maps	WhatsApp, Facebook, Tally, Excel, Maps
Most Value	Cost	Availability	Convenience	Availability, Invoices	Vehicle load body
Frequency of use	2 - 25 times a day	25 - 100 times a day	2-5 times a week	100+ times a day	25 - 100 times a day
Key features	Price, tracking	Near real time allocation	Mobile app	Consolidated invoice	NA
Decision maker vs operator	Same	Mix of same and different	Same	Different	Mix of same and Different
Willing to spend	For 3w, 400 per trip	For 3w, 450 per trip	For 3w, 500 per trip	For 3w, 400 per trip	For 3w, 450 per trip

We will focus on ICP 1 (Small SME without vehicle) and ICP 2 (Medium SME with vehicle) only.

Top Customer Pain Points	Porter Feature	Outcome using Porter
Vehicle not available when needed due to known driver being busy.	Digital matchmaking with a large pool of driver-partners.	Allocation of vehicle within 5 minutes. Arrival at pick-up point within 15 minutes.
Cost is high.	Low prices due to high utilization.	15-20% lower cost per trip.
Need to negotiate with driver.	Fixed price, well defined service.	No negotiation with driver partner.
Need to call and check where my goods on-the road.	Digital tracking.	Real time knowledge of exact location of the goods and vehicle.
Need invoice for records and filings.	Consignment note.	100% compliance through automatically obtained email consignment note after trip ends.
Pay more due to required vehicle not being available.	Select from range of vehicles from 2w all the way to 14 ft trucks.	Pay only for most efficient and effective vehicle.
e-commerce, quick commerce competition is eating into the business.	Digital logistics features expected by end customer.	Compete by providing similar digital features to the end customer.

Product pitch

Porter is a goods transport agency catering to on-demand, intra-city goods movement. Through technology, Porter connects a highly fragmented largely SME customer base with a highly fragmented largely driver-cum-owner partner base.

Demand side user : Customers
Supply side user : Driver Partners

We will focus on the demand side user i.3. the customer

Core value proposition

For a tech savvy SME who needs a reliable yet affordable way to transport goods on demand, Porter is a goods transport agency that provides transparent, cost-effective goods transport pickup within 15 minutes.

Key elements of CVP	Porter	Major Competitor (Unorganized)
Reliable	Vehicle is always available in-app due to thousands of driver partners in a given city	Each customer may only know 2-3 drivers who can bring goods vehicles.
Affordable	10-15% cheaper. Higher demand leads to higher vehicle utilization which leads to being able to offer lower price per trip since the per day earning will be higher because of higher number of trips.	Costly due to the need to pay for return trip also. There is limited set of drivers known leading to higher / willful pricing.
Transparent	Vehicle category, price, ETA are clearly mentioned even before booking. There is automatic tracking through the app.	There is always negotiation on price. There is uncertainty on when vehicle will get free and come. There is manual tracking post pick up.

How do the users experience the core value prop repeatedly?

Reliable: "Vehicle is always available in-app"

Every time a customer enters pickup and drop, and tries to find a vehicle, they will see that a vehicle is available within a small ETA. Further, when they order, they will get the vehicle.

Affordable: "10-15% cheaper"

Every time a customer tries to book a trip, they will see that a vehicle is available with a price that is cheaper than what they will find with the major competitor (unorganized sector). Further, when the order is completed, they realize this value when they pay the lower amount.

Transparent: "Vehicle category, price, ETA are clearly mentioned even before booking. There is automatic tracking through the app."

Every time a customer tries to book a trip, they see ETA and price clearly. What they see is what they pay once order is complete. Once they book, they will see the vehicle in the tracking screen.

Litmus test for Porter

Are users buying and retaining?

Are users buying?

Yes, company is growing rapidly at scale.

Present in 20 cities in India
Present in 2 international locations (UAE, Bangladesh)
Porter is growing at ~60% as per Business Standard
Organic channel is a significant source of customer acquisition.

Are users retaining?

Yes, retention stabilizes at 25% at M6.

Are the users building depth of engagement

Yes

Transactions per customer per month (TPC) is on an increasing trend.
Customers are using more of the same category of vehicles and also adjacent categories of vehicles.
Cross sell % is x%.

Are users willing to pay for the product?

Yes

The nature of service is transaction based (Similar to Ola, Uber). Every customer pays per trip immediately before or after the trip.
There are customers purchasing the Porter Gold subscription.

Based on the litmus test, Porter passes the litmus test

Product is already monetizing. The focus will be to build at least three experiments to solve for increased cross / up-sell

Territory understanding - substitute pricing

With Porter, the use case is to move goods from Point A to Point B.

Core value prop: For a tech savvy SME who needs a reliable yet affordable way to transport goods on demand, Porter is a goods transport agency that provides transparent, cost-effective goods transport pickup within 15 minutes.

Key elements of CVP	Porter	Major Competitor (Unorganized)
Reliable	Vehicle is always available in-app due to thousands of driver partners in a given city	Each customer may only know 2-3 drivers who can bring goods vehicles.
Affordable	10-15% cheaper. Higher demand leads to higher vehicle utilization which leads to being able to offer lower price per trip since the per day earning will be higher because of higher number of trips.	Costly due to the need to pay for return trip also. There is limited set of drivers known leading to higher / willful pricing.
Transparent	Vehicle category, price, ETA are clearly mentioned even before booking. There is automatic tracking through the app.	There is always negotiation on price. There is uncertainty on when vehicle will get free and come. There is manual tracking post pick up.

Substitute way	Cost	Reliable	Transparent	Ease of use	Physical effort	Pricing	Core users	Reason for use
Porter	Low	Medium	High	Easy	Medium (Loading, Unloading)	Rs. 300 for 5 km	Tech savvy SMEs with unpredictable, low / medium demand	Vehicle availability Affordability Transparency
Unorganized (Naaka)	Medium	Low	Low	Moderate	Low	Rs. 350 for 5 km	Traditional SMEs	Familiarity with the driver Nuances such as loading / unloading and Proof of delivery
Own vehicle	Variable	High	Medium	Easy	Low	High (EMI, Driver Salary)	Medium and Large SMEs with large, consistent demand	Full control
Long term contract	Medium	High	High	Easy	Low	Variable (Usage dependent)	Medium and Large SMEs with large, consistent demand	Full control

Monetization design

Who to charge?

Given that the the product is transactional since Porter needs to immediately pay the driver-partner to cover their significant operational costs (Fuel, EMI etc.) and livelihood. Hence, we will charge every customer.

Customer segment	Charge?	Why
Casual	Yes	Transactional product with significant cost Need to pay driver-partner immediately
Core	Yes	Transactional product with significant cost Need to pay driver-partner immediately
Power	Yes	Transactional product with significant cost Need to pay driver-partner immediately

When to charge?

Perceived value	Applicable?	Reasoning
Money	Yes	Customer is looking to compete with online and large players who have highly efficient cost structure. Considering the nearest alternatives, Porter is ~15% cheaper.
Time	Yes	Finding a driver, negotiating with them, tracking them are all hassles and a time drain that customer avoids by using Porter
Dopamine	No	There is no exclusivity or any other social status aspect built into the product for now. There is potential to bring in CO2 emission saving aspect in the future.
Efficiency	Yes	Compared to a sequential way due to limited contacts or limited vehicles, using Porter enables customer to operate efficiently in parallel in a digital way.

What to charge for?

Value	Charge?	Reasoning
Time	No	Core value prop realization is not dependent on the time
Output	Yes	Transactional product. Need to charge per trip to be able to pay the driver partner for significant operational costs.
Access	No / maybe	Not for now. For high frequency customers, there is a potential to charge subscription which is time bound.
Shareability	No	Not for now. CO2 savings could be something to consider in the future.

What is the core value prop and currency that helps users experience core value prop?

Key elements of CVP	Porter	Major Competitor (Unorganized)
Reliable	Vehicle is always available in-app due to thousands of driver partners in a given city	Each customer may only know 2-3 drivers who can bring goods vehicles.
Affordable	10-15% cheaper. Higher demand leads to higher vehicle utilization which leads to being able to offer lower price per trip since the per day earning will be higher because of higher number of trips.	Costly due to the need to pay for return trip also. There is limited set of drivers known leading to higher / willful pricing.
Transparent	Vehicle category, price, ETA are clearly mentioned even before booking. There is automatic tracking through the app.	There is always negotiation on price. There is uncertainty on when vehicle will get free and come. There is manual tracking post pick up.

How do the users experience the core value prop repeatedly?

Reliable: "Vehicle is always available in-app"

Every time a customer enters pickup and drop, and tries to find a vehicle, they will see that a vehicle is available within a small ETA. Further, when they order, they will get the vehicle.

Affordable: "10-15% cheaper"

Transparent: "Vehicle category, price, ETA are clearly mentioned even before booking. There is automatic tracking through the app."

Every time a customer tries to book a trip, they see ETA and price clearly. What they see is what they pay once order is complete. Once they book, they will see the vehicle in the tracking screen.

Pricing model selection

How much to charge?

Experiment 1

Hypothesis: If we guarantee vehicle arrival at pickup within 10 minutes, customers sending goods from one retail shop to another will be happy to pay 15% extra.

Setup:

Select sample size to ensure statistical significance based on delta earnings expected.

Do A:A test to ensure that test and control groups are identical and there is no bias.

Additional price calculation:

Within 10 min ETA translates to

Improvement in funnel drop at customer end by X% which is Rs. Y.
Free up of time at customer end by 15 min per trip which is Rs. Z.

Y + Z per trip translates to ~20% additional potential savings per trip.

Metrics:

Metric Type	Metric
North Star	Delta earnings
Success	% of targeted customers adopting the pricing
Leading metric	CTR of the option
Guardrail	P95 of actual ETA achieved
Guardrail	Additional cost incurred in achieving 10 min arrival
Guardrail	Customer complaints
Guardrail	Driver partner complaints

Experiment 2

Hypothesis: If we guarantee scooter instead of a bike / scooter when 2w is ordered, retail customers will be happy to pay 10% extra.

Setup:

Select sample size to ensure statistical significance based on delta earnings expected.

Do A:A test to ensure that test and control groups are identical and there is no bias.

Additional price calculation:

Providing Scooter instead of Bike translates to

Improvement in cancellation at customer end by X% which is Rs. Y.
Improvement in weight carrying capacity from 20 kg to 30 kg, customer will pay Rs A per kg, trip which is Rs. Z.

Y + Z per trip translates to ~10% additional potential savings per trip.

Metric Type	Metric
North Star	Delta earnings
Success	% of targeted customers adopting the pricing
Leading metric	CTR of the option
Guardrail	Fulfillment of the new category
Guardrail	Driver partner earnings
Guardrail	Customer complaints
Guardrail	Driver partner complaints

Experiment 3

Hypothesis: If we increase price of > 6 km trips by 20%, we will still be the most economic option and hence, customers will continue to use Porter.

Setup:

Select sample size to ensure statistical significance based on delta earnings expected.

Do A:A test to ensure that test and control groups are identical and there is no bias.

Additional price calculation:

Lowest competitor price for trips > 6 km is Rs X. Porter price is Rs. Y.

Y - X per trip translates to ~30%. Porter can add ~20% and still be the most economic option.

Metric Type	Metric
North Star	Delta earnings
Success	% of targeted customers adopting the pricing
Leading metric	Conversion of the Quote to order placed funnel
Guardrail	Fulfillment of the new category
Guardrail	Retention of the targeted customers
Guardrail	Customer complaints related to increased price

Experiment 4

If we guarantee closed body instead of a open body truck when truck is ordered, SME customers will be happy to pay 5% extra.

Setup:

Select sample size to ensure statistical significance based on delta earnings expected.

Do A:A test to ensure that test and control groups are identical and there is no bias.

Additional price calculation:

Providing closed body instead of open body translates to

Improvement in cancellation at customer end by X% which is Rs. Y.

Y per trip translates to ~5% additional potential savings per trip.

Metric Type	Metric
North Star	Delta earnings
Success	% of targeted customers adopting the pricing
Leading metric	CTR of the option
Guardrail	Fulfillment of the new category
Guardrail	Driver partner earnings
Guardrail	Customer complaints
Guardrail	Driver partner complaints

Experiment 5

Hypothesis: Enterprise customers will provide 30% more orders if price is reduced by 10%

Setup:

Select sample size to ensure statistical significance based on delta earnings expected.

Do A:A test to ensure that test and control groups are identical and there is no bias.

Additional price calculation:

Looking at lower priced competitor's wallet share compared to Porter, it is apparent that providing a lower price by 10% translates to

Improvement in number of orders by customer by 30%.

Metric Type	Metric
North Star	Revenue increase from enterprise customers
Success	Orders growth from Enterprise customers
Success	% of targeted customers adopting the pricing
Leading metric	Quote to booking funnel conversion
Guardrail	Profitability at contribution margin level

Pricing page design

Does your product require a quick buying experience?
Yes. Referring to the pricing model selection whimsical above, it is a low value, high frequency use case with instant gratification and no purchase commitment.
Should the experience for a first time buyer vs repeat buyer look different?
No. The experience should largely be the same and quick to go through for both. It should be System 1 design.
What is the natural behavior a user exhibits for a particular flow?
The flows need to be largely the same for both first time and repeat buyer. It should be System 1 design.