Vodafone’s Micro Recharge Card is a win-win for all 3-stake holders:
• Shopkeepers: It made them appear generous.
• Customers: They got what they desired & valued
• Vodafone: It helped them gain goodwill among the low-income group, who were the biggest beneficiary of this program; it also increased the number of distribution points at which Vodafone’s Recharge Cards were available.
Business Lesson for us:
1. Be mindful of your environment. Opportunities are plentiful but are camouflaged.
2. View problems as opportunities.
3. I believe that foundation of great business lies in understanding the pain points of customers & then attempting to reducing or eliminating them.
4. The business model should strive to arrive at a solution, which is a win – win for all stake holders.
5. The best solutions are those that dissolve into the lifestyle of its customers, remain invisible but enhance their lifestyle.
6. Whenever you create a property - brand it. In this case, Vodafone has branded this property as ‘Fakka’.
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In this series, Rajesh Srivastava, Business Strategist and Visiting Faculty at IIM Indore gives you a regular dose of strategy case studies to help you think and keep you one step ahead as a professional as compared to your peers. Rajesh is an alumnus of IIM Bangalore and IIT Kanpur and has over 2 decades of experience in the FMCG industry. All previous Strategy with RS posts can be found here
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Comments
Sajal Singh
Self improvement geek, drummer, digital thought leader in europe advising companies to invest in future than financial ratios. IIM matters less, attitude and common sense matters more Delhi boy who went from, chikmagalur to europe. Went to (IE Business School, Spain) https://www.linkedin.com/in/sajalsingh
No better way to start the day than to read such an amazing strategy story. Thanks.
22 Sep 2015, 08.50 AM
ramji yahoo
contribute to society thru management audits, cost audits
very great idea, win win for all (seller buyer country). thanks for sharing this inspirtional story
22 Sep 2015, 09.31 AM
Rajesh Srivastava
Sajal I am glad you liked the post.
22 Sep 2015, 09.54 AM
Rajesh Srivastava
Ramji. Yes the best strategies are those which are win - win for all stakeholders.
22 Sep 2015, 09.55 AM
Media Cell DMS, IIT Delhi
Media & PR Cell, DMS IIT Delhi
Very informative and insightful
22 Sep 2015, 09.58 PM
Rajesh Srivastava
I am really happy that you have found it informative & insightful.
22 Sep 2015, 10.05 PM
Sandeep Chowdary
Why are the setbacks that kept Vodafone from implementing the 'fakka' model in India?
22 Sep 2015, 11.29 PM
Rajesh Srivastava
Sandeep I am not sure what they are. Because there are several successful schemes they have run abroad which can 'fly' in India - M Pesa being yet another concept.
23 Sep 2015, 04.22 AM
Sandeep Chowdary
Yes. Even the very rampant Airtel Money has lost its charm.
23 Sep 2015, 03.35 PM
Rajesh Srivastava
Sandeep I am unable t understand your comment ... can you elaborate on it...
7 Oct 2015, 11.43 AM
Sandeep Chowdary
Airtel Money which once had a popularity and could have possibly started a similar fakka type model in India but since, now it has lost its charm due to some unknown reasons and many other easy-pay options (Paytm cash, payUmoney) have already come and became popular, even Airtel can't do the fakka type model in India now.
7 Oct 2015, 04.18 PM
Rajesh Srivastava
Sandeep we should always remember the saying of Shakespeare, 'There is a tide in the affairs of men. Which, taken at the flood, leads on to fortune; Omitted, all the voyage of their life Is bound in shallows and in miseries. On such a full sea are we now afloat, And we must take the current when it serves, Or lose our ventures.' Airtel seems to have ignored this .... & as rightly pointed out by you, it has lost its charm & it will be difficult to regain its charm.
7 Oct 2015, 07.47 PM
Sandeep Chowdary
Wah! What an apt piece by Shakespeare. Maybe we can write an article about "What businesses can learn from Shakespeare"
7 Oct 2015, 08.35 PM
Rajesh Srivastava
Sure Sandeep you should write it.
7 Oct 2015, 08.39 PM
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Sir, Vodafone started this in India in Rajasthan,UP East & Maharashtra a few years ago(2010-11) with a concept called "Chutta Recharge"-they started giving out 1 rupee or two rupee worth recharge coupons to shop keepers to give it as a change. As far as I understand it failed due to following reasons: 1) Unlike Eclairs or any toffee which could be consumed with ease by every person, recharge coupons would require the user to scratch and painfully enter the lengthy code given on the coupon. Many customers started giving back them back to shop keepers and slowly retailers stopped keeping them 2) Even after customer painstakingly scratched coupons and entered the numbers on card, he didn't like the product as a whole because all it gave to him was just one rupee balance. Vodafone tried to tackle this problem by giving some other goodies on this product like 10 SMS or 10 Night minutes which made product a bit attractive 3) Still, it failed to pick up as a normal toffee because of it's limited usage. Customer was able to use it only if he is a Vodafone subscriber. Imagine the plight of retailers where the market share of Vodafone is just around 10% and almost everyone visiting shop used to reject this Please share your views on this & how Vodafone could have made it a successful product
15 Oct 2015, 02.21 AM
Rajesh Srivastava
Vamsee, thanks for your post & apology for delay in responding. 1. The 'fakka' type strategy will work with brands who are deeply penetrated & widely used. 2. A strategy should be drawn by the company to address to either reduce or eliminate a customer's pain point. It should certainly not be geared to help them achieve there narrow self interest - making more money from its customers. If it does then 'chutta recharge' happens.
18 Oct 2015, 05.21 AM