Tool Vs. Network – What Does Your Customer Pay For?

A popular restaurant wants users to order through apps like Zomato or Swiggy because taking telephonic orders in busy hours requires lots of man power. Whereas, a new restaurant latches on to these apps for the new customers they bring.

The first set of restaurant are coming for the tool whereas the second set is coming for the network. Should the commission pricing be same for both? Does it help to know the segmentation and hence approach both set of customers differently? From what I know of last year, Zomato was treating them differently.

Take another example of Star Network vs. TVF on Youtube. Star’s content is popular and has a ready set of viewers. By being on Youtube, Star was giving more to Youtube than vice versa. May be YouTube did not care for the differentiation much, so Star network launched HotStar. TVF has an app but the Youtube channel is what the audience prefers. It’s like a small restaurant trying to make its own app and hoping to compete with Zomato. Possible to save some commission but not worth the effort.

In offline world, popular retail brands like BizBazaar or McDonald’s have the ability to drive footfalls to any corner of the city. Should a mall charge them the same rent as regular brands? They don’t.

On a related note, does a businessman in Delhi take car loan for the same reason as a techie in Bangalore. No money vs. no white-money. Will their interest paying capacity be same? Which of the two is looking for convenience of assisted service vs. lower price of online buying?

Does the person making a CoD order on Flipkart really not have a debit card? Are such users willing to pay a higher price because it helps them consume untaxed money?

It helps to know the real reason your product is being used. The pricing and User Experience metrics will change when you know that.

Also published on Medium.

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