In 2016 Yandex.Taxi’s revenue has grown 2.4 times compared to 2015. The service has been on the market for more than five years and now it operates with reassuring confidence. Unilead News spoke to Daniil Shuleiko, Marketing Director at Yandex.Taxi, and Evgeniy Bikin, Performance Marketing Head, to find out how the company markets its services.
Hi! Well, can you tell us how do you manage to keep such growth rate, what is the secret of your success?
Shuleiko: In the terms of growth Yandex.Taxi is a very interesting phenomenon. On the one side, we are a part of a large-scale company, on the other – a startup where the things move at a crazy speed. It’s true for many sizeable Yandex’s projects: new business areas were set up as independent companies to give them more space.
Such atmosphere and startup culture are one of the main reasons for the growth. You can come to Yandex.Taxi office at any time of the day and at any day of the week, and you will find people there. There will be 20 people working with Vladivostok at 9 a.m., at 2 a.m. you may encounter a heated discussion between a designer and manager responsible for some part of the product.
By the way, speaking of the team – is it big?
Shuleiko: Actually, we hire people on a cosmic scale. At the end 2014 about 15-20 people were working with the service, now it’s several hundred employees. We even have a hiring automation project. We hired a lot of people for regional operations last year, since we’d started working in dozens Russian cities and several CIS countries’ cities, and each of those locations needed a manager. No matter how hi-tech and efficient we are, we can’t manage everything from Moscow. Managers in the cities work as liaisons with taxi parks and they are our eyes and hands.
Let’s move to a touchy question: you started in 2011, and Gett appeared the same year. How bloody is the battle for mobile user loyalty?
Shuleiko: It depends on the city. There are towns where we really do feel competition, and in others all aggregators are so small that we compete not with others of our kind, but only with local phone-call taxis and “manual” cab hailing. We create new market segments in some towns, for example, short trips from subway to office covering such new market shares.
Bikin: We don’t really compete with taxi services, personal cars and public transportation are the closest our competitors.
Shuleiko: Yep, if you calculate all your car-related costs at least once, you’ll understand what we mean. Probably, it’s a bit difficult to perceive the idea of going to a grocery store by taxi, but in fact it’s quite convenient.
And what about car sharing services – are they a threat?
Shuleiko: It’s a bit different story. We not only offer comfort for less money than a personal car, we offer free time. Car sharing is about saving money at the first place.
Tell us about going into regional towns. How do you research a town before going in? How do you make a choice, what is the key indicator for you?
Shuleiko: To be honest, when we were just starting our regional expansion, we didn’t understand a thing about those towns. Most of the things we were imagining about them turned out to be not true. But we did understand the first steps to take – we were launching in regional capitals. Novosibirsk, Yekaterinburg, Krasnodar. We had several ideas on entering strategies, but all of them failed, because they weren’t based on the real picture. What we had was a business plan for some imaginary town.
In fact, all towns are different: different trip lengths, different rush hour times. The copies working well in Moscow may work as well in Krasnodar, but they can be a disaster in Vladivostok.
We have come to the thought that all towns are unique, but they can be grouped by a set of attributes. For example, Siberian towns are alike, Samara and Tolyatti, which are close, are also alike. People there have similar taxi usage patterns. Then we look at the audience: who are our users, who use our service at the start, to whom we lose, then we create audience groups and try to switch them, one by one, to our service.
Bikin: Existing market fragmentation is also an important thing to know at the start. We work only with official taxi parks, and it’s better to have more of those. Also, we try to find out the market size before launching, but that’s not an easy thing, since there are no open source data and different calculation models can be applied. The main things for us are the size of the town, how developed the public transportation is, and roads.
It’s clear for the cities. But how do you enter other countries?
Shuleiko: Oh, here the real difficulty starts, because it means different Internet connection and different language. When Yandex.Taxi came to Armenia, a funny thing happened. There were posters in the drivers’ learning center; they are standard for all countries so we just translated them into Armenian for Erevan. But when I was on a business trip there, I found out that young people in Erevan couldn’t read the font selected by our designers. It was an old-fashioned font, which only the elder generation could understand. So, such little things happen in every town, it’s impossible to foresee everything.
Bikin: Our main strategy is to stay centralized. That means that all our marketing activities, including online ones, are developed in Moscow by internal teams. We don’t set up a separate team for each country. Our team takes on everything involving professionals from Yandex or those working for a specific content adaptation projects.
What are the metrics you look at to determine advertising efficiency, apart from user acquisition cost and first ride cost?
Shuleiko: Well, you need to learn right calculation. First order from a phone number does not equal the first ride. The person could just change their phone number or use another SIM card. It’s necessary to learn to track that right.
Secondly, again, things are different in different towns. If it is a region where Yandex.Taxi name rings no bell, it’s one conversion level. If we enjoy some level of recognition, it’s another story. So, it’s difficult for performance marketing experts to understand what recognition is and how much it should cost, but these are important metrics – we see a direct relationship between service recognition and conversion.
For example, it would be strange to talk about the first ride in Moscow, almost everyone had already had it, so other metrics are important here, such as service penetration level, specific audiences’ parameters (booster chairs for young families, bike holders for the summer time, etc.).
When entering a new town, we encounter losses in the first several months, we try different tools and look what works in the city and what doesn’t. At the same time, we build up recognition using TV commercials, for example.
In the cities with large share and coverage we try to launch highly demanded features. For example, the roads in Samara are not very good, especially in winter. We found a way to solve the problem: our partner purchased cross-country Renault Dusters. We created a special comfort class with this partner.
You’ve said about TV, but do you use radio commercials?
Shuleiko: We’ve given this channel to our partners, taxi parks, to hire the drivers, and we keep out to avoid unnecessary white noise. Yandex is there anyway, like ‘…according to Yandex.Jam or Yandex.Weather data.’
How do you measure your TV commercials’ performance?
Shuleiko: We look at install surges during the time after each commercial and compare it to the similar period when there was no commercial. Thus, we calculate the performance for the TV channel and each commercial. It gives us understanding which channels and TV programs are the best.
Bikin: Also, we look at brand-related search queries, they climb higher after commercials. Also, our service has a strong differed effect, because people don’t hail a cab right after watching a commercial and installing the app.
Do you use trend-related marketing?
Shuleiko: Mostly not, it’s not too much like Yandex. The only exception was when we purchased two Teslas, when the trend peaked, and it was one of the most successful projects. Also, we can recall the VR project, when passengers could drive through a tropical forest in a VR set inside the car.
Well, and the last thing, can you tell us something funny about Yandex.Taxi marketing team work?
Bikin: Well, the funniest thing happened to Teslas, actually. The cars drove at random to any orders made. So, once some people came to a restaurant, bought food, and went home. There they found out that they’d left some bread at the restaurant. They called a taxi to pick up the bread, called to the waiter and told him to give it to the taxi driver. The waiter walks out the restaurant and sees a Tesla waiting. From zero to hundred in 3.7, and bread at the back seat. Well, it was still warm when those people got it.