How To Model The Lethal Strategy OPAY Used To Literally Bully The Bike Hailing Market From GOKADA.

Let’s be honest, being a pioneer isn’t as romantic as most people tend to think or assume it is, while it may have its advantage for a moment, failure to capitalize on it could be suicidal for your business.

Now, I understand that there could be factors beyond your control that may impede your projected progress but beware of the pioneer syndrome.

Take a look around at the
disruptions in several industries and you’ll understand that first come doesn’t
necessarily mean first served.

And that ushers in the beginning of the end of the Gokada Story.

To get a good understanding
of this post, let’s take a few steps back.

Gokada was founded in
January 2018, launching operations in Yaba axis and extending it to Victoria
Island in Lagos, and in May 2019 it landed its Series A funding of $ 5.4
million to scale up operations.

On the other hand, let’s take a look a good look at Opay, the truth is most of us got to know about Opay in June 2019 with the launch of their NGN 100 promo across Lagos state (in particular), but in reality, Opay has been in operation since 2010 as PayCom Nigeria Limited ( a mobile money platform), and in August 2018 Opera acquired a controlling of Paycom.

In mid-2019, Opay landed its first funding of $50 million from a group of Chinese investors and launched a series of strategic campaigns that would literally leave Gokada in the past.

Of course, Max has been around since 2015, operating as a logistic company before venturing out into the motorbike hailing space. Notwithstanding I wouldn’t credit them with the idea of being a competitor.

Before I begin breaking down the lethal strategy Opay deploys, I want to show you their standing as of now.

As you can see that Opay has over 1 million downloads as compared to Gokada who has over 100K downloads and Max which has 50K downloads.

This gives an idea of how
many active app users they have and their consistent promotions also shows the
extent they go in keeping them engaged.

[Keep in mind that Opay is the youngest of the 3 brothers, but with the fattest wallet].

I know what you might be

$50 million who wouldn’t take over any market?

And quite frankly, you’re
right to think so.


It’s not so much about the money (while that is good), but the thought process behind the plan.

I want you take you on a journey and show you the “lethal mammoth" strategy Opay uses that is backed by a ton of cash, and dissect the brilliance of it so you can implement such masterpiece in your business.

Let’s go into the apps

Opay uses a 2-pronged strategy at all times, that leads with market penetration and then follows up with market domination and they don’t play fair. They eat up everything in their way.

In other words, none of their strategy exists alone, but has a domino effect leading to other things that allows them to increase the transactional value of each customer on the horizontal as well as vertical axis for maximum output.

This is a graphical representation of what Opay is really doing that Max and Gokada can’t keep up with( please note that this is a hypothetical scenario of what's happening behind the scene and not factual, but just to give you a clearer picture of what Opay is really about).

The above graph shows that the best Gokada can do is get Customer X to take more rides on their platform. On the other hand Opay does so much more than that by ascending Customer X through a series of products on the same app.

To get a vivid picture of this strategy lets analyze the transactional value of Customer X to Opay and then compare it to that of Gokada (or Max).

So while Gokada can only get customer X to make more trips, Opay, on the other hand has tapped into other needs customer X has and it serves them thereby increasing the value of each customer to the business.

This simple strategy gives
them an unfair advantage over the rest.

Look at it this way, Opay
understands that Customer X is a human being with the need to move around so
they have Oride, the need to eat; and they have Ofood, etc.

In other words, Customer X is already spending money on the other things so why not just get a piece of his usual transactions, as compared to Gokada who doesn't even come close.

So, we can reasonably say that if Opay and Gokada had the same advertising budget and did exactly the same thing, Opay would eventually come out ahead because it has taken care of Customer X need’s before, during and after each trip.

The secret to brilliant marketing is not so much in the tactics but a good understanding of human behavior and aligning your marketing message to speak directly to the underlying needs.

In addition to what I have said so far, Opay and the other companies have 2 customers they market to.

  1. The Primary Customer: Passenger
  2. The Secondary Customer: Bike Rider

And they have different marketing
messages for each customer (but I wouldn’t want to dive into that or this post
might get too lengthy).

But what I want to bring out
are the basic  behavioral pattern of
people (Nigerian market in particular) that Opay took  advantage of to roll out their campaigns:

  1. People
    Love Free Stuff:

Opay launched a N100 promo campaign in June to drive its market penetration strategy (to acquire customers at a loss that would be profitable over a period of time). And this strategy worked because they repeated it again the following month and even increased the price to N200.

2. People Are Only Loyal What They Stand to Gain:  

Opay understood that Nigeria is a very price-sensitive market and are only loyal to their pocket, so they continually give discounts to customers who pay through the app. Think about it…why would anyone go for Gokada or Max when they get great discounts on each trip with Opay.

3. People Love Convenience:

Opay launched out with Oride (motorbike), and then branched into Otrike(keke), and then Ocar (cars), and then Ofood (food ordering). So you basically have one app that gives you access to so many other things plus discounts…why would you want to go anywhere else? Its like having all your favourite stores in the one mall while have to travel far and wide for it.

4. People love shortcuts

continually gives discount to in-app purchases because they realize that the
only way to curb people making payments outside of the app or stop the riders
from making a quick buck outside of the app is to give incentives, and by doing
this they are able to increase the value of the customer through a suite of
other services within the app.

To conclude this post, I’ll share how much traffic Opay generates monthly and how you can adapt the brilliance of the Opay business model into your business even though you don’t have such a deep pocket.

As you can see, in the past 3months, Opay has over 2 million visits, with over 95% of it from mobile devices. With such a traffic volume you can imagine what their bottom line would be if they just get these 2 million visitors make as little as a NGN 10 transaction(I know you get the picture). Let's bring this home to you, here's what you can learn from this for your business:

  1. Map out the customer’s journey based on their needs:

Your business exists to serve the needs of a customer and the best way to meet those needs is to have a clear picture of the customer’s journey towards finding a solution to those needs.

2. Identify complementary services that can increase the transactional value of a customer to your business:

Opay launched out with Oride to get the customer’s attention and later begin adding other services that will help them maximize the profit, and you can also do the same by simply looking for other products that increase the amount of money a customer will spend with you.  As little as a 3% increase on the average transaction can boost revenue exponentially.

3. Create An Ecosystem Around Your CUSTOMER:

This approach is not unique to Opay alone, as a matter of
fact it is used by Google also, the only way to increase engagement with your
customer is to create an invisible hedge around them so they don’t have to go
elsewhere for anything.

4. Create an Irresistible Referral System that cuts down your Cost of Acquisition:

Not very many people understand the power of a good
referral system, this strategy can skyrocket your revenue and the fact about it
is that it is hinged on human behavior and then backed by technology, but most
businesses focus on the technology and that’s basically putting the cart before
the horse.

5. Establish strategic partnerships that allow you to offer value to your customers:

Every business starts out drawing up a SWOT analysis, and most businesses only focus on their strengths but what if you can actually profit from your weakness by forging strategic partnerships. This can actually boost your revenue by at least 10% without any hassle.

That'll be all for now, and if you want us to show you how to craft and deploy such a brilliant strategy send us a message.

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