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Uber, the disruptive peer-to-peer ride-sharing service, has practically decimated the traditional taxicab industry in over 60 countries (and growing). Within ten years of launch, it has become the face of the On-demand Marketplace and inspiration of ‘Uber for X’ entrepreneurs around the world.
So, how did Uber achieve such groundbreaking success? Here are 15 lessons entrepreneurs can steal from Uber’s marketing strategy.
Travis Kalanick and Garret Camp weren’t the only people who couldn’t find a cab on that snowy 2008 evening. They probably weren’t the first ones to ever have the bright idea of ride sharing, but they were the only people who acted and turned their idea into a product that the market badly needed. Too many breakthrough ideas never see the light of day because they’re dismissed too early in the innovation process. So, if you think you have dreamed of a game-changing idea, don’t give up on it too easily.
Even a bad team can be successful under favorable market conditions, while a great team can fail if there are no buyers for its products. In Uber’s case, a great team met a great market. It didn’t happen by coincidence. Travis Kalanick was on the lookout for a product manager right from the outset. Here’s his first tweet after conceiving the idea of Uber:
Too many startups fail because they miscalculate or fail to arrange the funding to transform their business idea into a marketable product. Uber has so far raised a total of $24.2 billion over 22 funding rounds, starting with a modest $11 million in the first round. Without this capital, Uber could never become what it is today. In fact, you might be luckier now than Kalanick and Camp were 10 years ago. The availability of crowd-funding platforms like Kickstarter and Indiegogo, which were just getting started when Uber hit the market, can help you launch successfully and securely.
An incomplete or lousy solution is an invitation to competitors. MySpace introduced social networking but badly lost when Facebook perfected it. iOS and Android beat the pioneering Symbian simply because they were better products. Uber re-imagined the taxicab experience and made it more convenient, predictable, affordable, and fun. The team perfected the solution before introducing it to the market, so the brand has been dominating the industry since its inception.
Uber’s marketing strategy could not have been executed without technology. Geolocation was the first thing Uber’s co-founders needed to figure out. They needed technology to identify and track a device’s location, to provide driving directions, and integrating with mapping software. You’re lucky in the sense that you probably don’t have to work as hard. Technology has progressed, and you can easily access the technology stack you need to build an Uber for X.
Uber’s biggest problem was to attract riders and drivers simultaneously. The team decided to target tech communities because the ideal customer personas depicted they were always interested in trying new tools and improving their lifestyle. San Francisco was the ideal place to target these communities. Uber spread the word among its target audience by hosting tech events and offering free rides. Soon, bloggers were raving about the cool new app and how it blew away the traditional taxicab experience.
Uber offers free rides and discounts to first-time users as well as regular riders. Users can claim free credits after they’ve downloaded the app. The Uber engine targets regular users with discount offers using in-app messaging and push notifications. The Uber Loyalty Program allows riders to collect points each time they ride with Uber. The points can be redeemed toward Uber Cash and benefits. Incentives help initiate trial among new users while retaining old customers.
After starting from scratch 10 years ago, Uber currently has 75 million monthly active riders and 3 million drivers worldwide. One of the secrets behind Uber’s rapid adoption is the company’s ingenious referral program. Both riders and drivers can refer the app to their friends using their personal referral code. If they join the app using your code, you get free or discounted rides. Other companies, including DropBox, Groupon, and Tesla, have successfully used referral programs to generate tremendous word-of-mouth publicity and user adoption.
Uber keeps pulling rabbits out of its hat to keep its customers engaged and make the brand look dynamic. The innovative promotions include on-demand hot air balloon and boat rides, cuddle huddle with puppies and kittens, wine tours and Christmas trees, even helicopter rides. Such marketing gimmicks please Millennials and keep customers coming back.
One aspect of Uber’s marketing strategy includes co-promotions with well-known brands. Uber enters brand partnerships quite regularly. Examples include cash back for Capital One card users, free rides in the BMW 7 Series, and hotel points for Starwood. In certain countries, Uber also runs co-promotions with local workshops to offer discounts for Uber drivers. Co-promotions make the brand look more authentic, apart from offering value for riders and drivers.
The rating system for drivers and riders was a major differentiator between Uber and traditional taxis. Riders can view their driver’s ratings and feel comfortable knowing they won’t be riding with an unwanted chatterbox or dangerous psychopath. Drivers can also rate passengers, but the passenger ratings are not visible on Uber for riders. A rating and review system promotes trust in the brand and encourages people to behave more responsibly. Online customer reviews are also picked up by Google and improve your search rankings and click-through rates.
The omnichannel experience is the most important aspect of Uber’s marketing strategy. Uber didn’t just fix a part of the existing taxicab experience, but re-imagined the whole experience and made it seamless. You could hail a better car, pay a lower fare, share your location, and rate the driver, all from within the app. Uber didn’t stop with the app. Its Facebook page is regularly updated and has more than 22 million followers. It has partnered with Facebook to let user hail rides from within the Messenger app.
According to the vision of its founders, Uber is a local service, so the brand has localization as the cornerstone of its marketing strategy. Uber’s marketing strategy focuses on the local social and cultural landscape to be successful. The brand pursues its strategy live locally, build globally by using local visuals, by solving local community problems, and by localizing marketing campaigns.
Uber has expanded its on-demand business model to new areas of market demand. UberEATS, a standalone app, lets consumers order rapid food deliveries. UberRUSH, a B2B delivery service, has already partnered with Clover, Shopify, and Bigcommerce. The brand has also ventured into bicycle sharing, events, and healthcare. Diversification and expansion are great strategies for boosting profits, but you should be careful not to stretch the brand too thin.
If you’re successful in creating a product as revolutionary as Uber, you’re likely to get featured in the media, and not all that publicity is going to be positive. Uber has a long history of scandals, blunders, and PR disasters, one of which culminated in CEO Travis Kalanick’s resignation. Uber has been the target of privacy concerns, lawsuits, sexual harassment allegations, and viral social media campaigns like #DeleteUber. PR has probably not been the strongest point in Uber marketing strategy, so make sure you’re better prepared if you’re going to create something half as successful as Uber!
Looking closely at Uber’s marketing strategy; you might realize it just did ordinary things in an extraordinary way. A great idea, ideal market conditions, and competent development and marketing teams wrote one of the biggest success stories of the digital age.
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The art is building the right growth campaign. The science is in the results.