Questions

Our target customers are Millennials in India. Avg. annual income of a millennial (software engineer) in India is Rs. 6 lac (i.e 10,000 USD). And we are offering them budget vacations under Rs. 30K (i.e 500 USD). So, there is room for repeat purchases. We are a startup with a nominal funding of 500K USD, tight on cash. Wondering how we can run a loyalty/rewards program to start growing our customer base?

Since cashflow is an issue, here's my advice:

* Get the rewards from someone else. *

There's no need for you to pay for these perks. Find partners in complimentary fields, and approach them with the offer that you will connect them with your buyers list (a very valuable thing) in exchange for their rewards.

When it comes to Cost of Customer Acquisition, this could be an incredibly smart thing to do from the reward provider's viewpoint. They get access to proven buyers in the related field for whatever their rewards cost...and they can figure out how to make money and Lifetime Customer Value from that pretty quickly (some from your list are going to buy from them...CCA = $X rewards...LTV = $Y bought... LTV - CCA = margin per customer.)

"It's not magic, it's math!"


Answered 2 years ago

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