Engagement & Retention project | Tactics
Core Value Proposition
Get Salon, Spa, Handyman Servicers, Home Cleaning, Appliance Repair and Servicing delivered by trained professionals at the comfort of your home.
Urban Company let's you book home and beauty services, provided by trained professionals at the convenience of your home. With over 48,200 trained professionals in 59 Cities spanning 4 Countries, Urban Company let's you choose the date and time of the booking for over 50+ services through their online marketplace. From a hair cut to massage and pest control to AC cleaning, Urban Clap is focused delivery of a quality driven, standardized and reliable service experience provided by trusted professionals.
The Product
Urban Company operates a technology-driven, full-stack online services marketplace for quality driven services and solutions across various home and beauty categories.
They operate in 59 cities across India, United Arab Emirates (“UAE”), Singapore, and Kingdom of Saudi Arabia (“KSA”), of which 48 cities are in India.
Their platform enables consumers to easily order services, including cleaning, pest control, electrician, plumbing, carpentry, appliance servicing and repair, painting, skincare, hair grooming and massage therapy.
These services are delivered by trained and independent service professionals at the consumers’ convenience enabling delivery of a quality driven, standardized and reliable service experience.
Urban Company's Focus
They are focused on trust, reliability, convenience and quality.
Trained & Independent Professionals
The professionals who actually provide the services are background verified and trained by UC.
Problems + Features + CVP Alignment
Professionals
For Home Service
Home service professionals includes:
- Handymen (Plumbers, electricians and carpenters)
- House Cleaning and Pest Control Experts (Daily cleaning, high frequency cleaning and professional cleaning experts for homes, sofas, specific areas etc.)
- Technicians (Repair and Installation of appliances like AC, Fridge etc.)
- Painters (Interiors and exteriors)
- Home Upgradation Experts (Wall Panel Installers etc.)
- Waterproofing Experts
For Beauty & Wellness
Beauty and wellness service professionals include:
- Women's Skincare and Hair Grooming Experts (waxing, manicure, pedicure, makeup, cleanup, haircare and facial)
- Men's Grooming Experts (Haircut, Beard Trimming & Styling, Facials)
- Massage Experts (Men & Women)
Problem | Feature | Core Value Prop Alignment |
|---|---|---|
Professionals are not available when you need them. | With over 48,000 professional, there will always be a professional available | Large and growing network of service professionals |
Professionals are not authorized by brands or not trained experts. | All UC Professionals undergo training. Such training is provided by UC in-house. Thus standardizing the service and increasing the quality of service. |
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Sometimes users have to rely on unknown professionals they are meeting for the first time, discomfort and trust issues. | UC does a background check on all their professionals. |
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Professionals demand higher prices and often resort to unfair pricing practices | UC provides standardized pricing for every service |
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Professionals provide an initial quote but then demand higher prices after providing the service | UC Professionals cannot demand higher prices or price other than quoted in the UC App as the payment is processed by UC |
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Professionals do not provide any warranty for the service provided or part replaced | UC provides various warranty periods depending on service for example 2 months of free pest control not resolved in first 2 paid services |
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Professionals buy the products/spare parts at discounted prices and sell at MRP | UC Professionals give a quotation after the consultation. UC also let's users verify the quotation with experts. Only if user is satisfied they can finalize the quotation. |
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Professionals are not available in emergency situations | UC has rolled out a new service feature - Insta Help. Get instant help in situations of emergency |
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Professionals do not come on time | UC Professionals arrive on time. Their in-time and out-time is recorded in the UC app. The in-time starts only after the User provides an OTP. |
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Professionals do not want to come home for example TV repair, mixer repair, beauty and wellness | UC's core feature is that professionals come home to deliver the services |
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Beauty and Wellness Professionals do not take prior appointment and there is often wait time | UC's core feature is that users can pre-book appointments days ahead eliminating wait time at the time of service. Appointment slots at the frequency of every 30 minutes provided |
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Beauty and Wellness Professionals do not provide the same service experience like the last time | UC has created SOP for trainings. Thus UC trains the professionals creating standardized service experience every time. |
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Users are not aware of products used by Beauty and Wellness Professionals | UC provides all the products used to provide the service, from massage bed, cleaners, chemicals, beauty products and oils to everything in between |
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Other Problems
Includes problems related to payments, pricing and experience.
Problem | Feature | Core Value Prop Alignment |
|---|---|---|
Wellness services cost higher offline | UC delivers beauty and wellness services under 3 categories: luxe services, prime services, and classic services based on average order value. Thus providing customers with low-price, medium-priced and premium-priced options. |
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User cannot judge the past experience of offline professionals. It's just their word against yours. Users have to blindly trust the experience of customers | UC provides users to rate and review each professional after they have provided the service. UC then, with their internal quality service mechanisms allot only those professionals who have high rating and provide training or remove those who have low ratings. |
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Users have to note down contact info different professionals like carpenter, plumber, beautician etc. who are prone to change their contact information without notice | UC is a marketplace which provides 50+ services in various home and beauty categories by way of website and mobile app |
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It's not easy for elderly and physically challenged people to find professionals | UC has developed a very simple and easy to navigate UI/UX which enables even the elderly to book services with ease and checkout with simple options. It has also launched extensive accessibility options for visually impaired. |
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Professionals can take money and run away, never coming back | UC takes the payment from user via various payment options and then disburses the payments to professionals |
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If the service was not of good quality, there is no way to complain, improve, cancel or raise a request for refund | UC provides customer support after experiencing service. If the service was not of good quality, users can raise a refund request |
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Ability to cancel a service after booking it in case of emergency | Although, this is generally provided by offline professionals as well, UC provides a booking cancellation option in the UC app itself. |
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Users Experience of CVP
Customer journey for UC can be divided into 6 stages, which cover the entire journey from discovery to experience:
- Discovery
- Pricing
- Delivery
- Quality of Service/Products used
- Post Service Help
Stage | Touch Points from Urban Company |
|---|---|
Discovery |
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Pricing |
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Delivery |
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Quality of service/Products used |
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Post service help |
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Natural Frequency
UC has various service offerings the Natural Frequency of each of these services is different.
Moreover, the natural frequency is also varied based on gender, household income and ICP. However, we will be looking at the natural frequency for
Natural Frequency Category and Service Wise
Service Category | Services | Frequency | |
|---|---|---|---|
Home Cleaning (Regular) | Bathroom cleaning | Weekly | 1-2 times a week |
Home Cleaning (Professional) | Full home cleaning, kitchen cleaning, Sofa and carpet cleaning | Quarterly | 1 time per quarter |
Female beauty services | Haircut, manicure, pedicure, facials, waxing | Monthly | 1-2 time per month |
Male grooming services | Haircut, beard trimming, facials | Monthly | 1 time per month |
Handyman | Electrician, plumbing, carpenter | Bi-Monthly | 1-2 time per 2 months |
Spa and Wellness | Massage (men and women) | Semi-annually | 1 times per 6 months |
Painting and Upgradation | Interior painting, exterior painting, wall paneling, water-proofing | Every 3-5 Years | 1 time every 3-5 years |
Pest Control | Cockroach, Ants, Termite, Bed Bugs | Annually | 1 time per year |
Natural Frequency House-hold Income and ICP Wise
Category | Frequency | Reason |
|---|---|---|
Low-income Household | 3-4 times per year | Low income households have lesser appliances and do most of the cleaning services by themselves. They usually require handymen services for fridge/tv. The frequency for which is rather low. |
Middle Income Household | 1 time per month | Middle income groups have more appliances, fridge, tv, washing machine, mixer-grinder, microwave, AC, Cooler this increases the requirement of handyman. These households have part time maids who usually do the daily cleaning only. Hence, for services like bathroom, full house cleaning, appliances. They also frequently book beauty services if the price is low. |
| 1-2 times per month | In High/dual income households both the members work from offices and spend little time at home, thus increasing the spend on home services. They also have full fledged appliances from the usual fridge, tv to OTG and water purifiers. They have limited time so they like to book beauty services and wellness services at their convenience. |
Other Sub Products Provided by UC
Native
Native is a brand created by UC under which UC is currently selling the following 2 products.
Water Purifiers
Frequency of Product
6 Years
Frequency of Maintenance
Semi-annually
Frequency of Interaction
Every few hours
Key observations:
- Although the frequency of buying the product is once in 6 years and the frequency of maintenance is every 6 months, the frequency of use/interaction of the product is daily, which creates TOMA. This is super clever from UC.
- We drink water daily
- By providing in app monitoring of water purifier user checks the data 2-3 times a week.
Electronic Door Locks
Frequency of Product
3+ Years
Frequency of Maintenance
N/A
Frequency of Use/Interaction
Every few hours
Key observations:
- Although the frequency of buying the product is once in 3+ years the frequency of use of the product is daily, which creates TOMA.
- The lock is accessed at least 2-4 times a day
- By providing in app unlock and monitoring features.
Note: The frequency of product and maintenance have been extrapolated from the warranty period provided by UC.
Natural Frequency - Product as A Whole
The natural frequency of Urban Company taken as a whole is weekly.
Why? Let's understand the chronology
- UC started out as a home services provider mainly - handyman, cleaning like sofa, house etc. The frequency of these services was quarterly at the least.
- By adding beauty and grooming services, UC moved from quarterly to monthly frequency as women are booking more and more from UC. Users who previously opened the UC app only to book home services noticed beauty services and have started transitioning to monthly.
- With the new feature of "Subscriptions " for home services like bathroom cleaning, UC has transitioned from monthly to weekly.
This strategy has increased the TOMA of UC significantly, which naturally has caused increase in TOMA for all services.
Note: In the case of users who have opted for Native products, the frequency is daily.
This also points us to a very interesting insight on engagement framework being used by UC. From the services categories, the subscription model being pushed it is clear that UC uses 'Breadth' as an engagement framework. But more on this below.
Engagement Framework
Engagement Framework | Meaning |
|---|---|
Breadth | The more a user engages with adjacent products/features, CVP increases |
Depth | The more time/money you spend on a product, CVP increases |
Frequency | Number of times a product/feature is used |
Breadth
UC provides the following 3 category of services/products
Home Services | Beauty & Wellness | Native | |
|---|---|---|---|
Services |
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Frequency for ICP | Weekly, Monthly, Yearly, Every 5 Years | Monthly, Semi-annually | Frequency of Interaction: Daily Frequency of Purchase: 3-6 Years |
Frequency and Annual spend/House Hold for services
Observations
- Every service and product from UC has a different frequency of booking.
- If a user books only Home Services or Beauty Services, then the TOMA and Frequency of UC decreases to higher periods - the minimum would be monthly or bi-monthly.
- Where a user books services from just one of the categories, the revenue per user does not increase.
- In order to increase the ARPU, the user must interact and book other services.
- The Native products, significantly increase the TOMA by shifting the natural frequency from monthly to almost daily.
- This let's users interact with the UC app more and there by let's them discover other service categories.
- This increases ARPU, Net Transaction Value and Lifetime Value of user.
Depth
Depth involves 2 sub-categories, time and money.
Observation | |
Time |
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Money |
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Best Engagement Framework for UC
Engagement Framework | Key Tracking Metric | Selected | Rationale |
|---|---|---|---|
Frequency | Bookings | Secondary |
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Depth | Money | Secondary |
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Breadth | Other Services/Products Booked | Primary |
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To sum up, Breadth is the Primary Engagement Framework for UC because it drives both frequency and depth.
Each service has a varied and low natural frequency. Due to this, the frequency of booking is low and thereby the depth(money) is also low. So, in order to increase both, the Frequency and Depth, the Breadth has to be increased.
Which means that UC has to engage users to try other services. Either
- book a same or lower frequency product in same/other category
- book a higher frequency product in same/other category
- book a service which has higher ticket size or lower ticket size
Buy doing any of the above, the breadth naturally increases and thereby contributing to increase in frequency and thus depth.
Active User
An active user for Urban Company would be someone who books at least 2 services (home or beauty) every month or has taken a subscription.
Figure out the retention data for your product. If you don't have access to the same, begin by adjusting the industry standards. Plot down the data and bring to life your retention curve. Draw out observations and insights from the same.
What is causing your users to churn?
Go back to your user insights and figure out the number one reason of churn by listing down all the factors.
Retention
Current Retention Rate
What we Know
- UC offers various services with different natural frequencies. Hence, to determine the retention rate we will look at the retention rate of it's 2 main categories - Home Cleaning Services and Beauty & Wellness Services. The Home Cleaning comprises home cleaning, appliance repair, pest control, handyman. Beauty and Wellness services includes male, female grooming and spa services.
- From the financial statements of UC, 80% of NTV comes from retained user. (FY 24 data)
- Around 55% of which is from Beauty and Wellness (FY 20 data)
- Our active user is one who books 2 service in a month
Criteria | User 1 | User 2 | User 3 | User 4 | User 5 |
Name | Deepthi | Priyanka | Suhas | Spurthika | Tabitha |
1st Booking (Year + Category) | 2022 (Bathroom Cleaning) | Nov 2021 (Salon Service) | Feb 2024 (Electrician) | Jan 2025 (Pedicure) | April 2021 (Salon) |
2nd Booking (Year+ Category) | 2023 (Salon Services) | Jan 2022 (Salon Service) | May 2024 (Plumber) | Jan 2025 (Plumber) | June 2021 (Salon) |
Gap between 1st & 2nd | 1 Year | 2 months | 3-4 months | 15-20 days | 2 Months |
- 60% of our users booked beauty as the second booking
- 40% of users booked home services as second booking
- 33% of users who had booked beauty as 1st service re-booked beauty services
D1 Action | D7 Action | D30 Action | |
|---|---|---|---|
ICP 1 (Deepthi) | Booked Bathroom Cleaning Service | None | None |
ICP 2 (Priyanka) | Booked Salon Services | None | None |
ICP 3 (Suhas) | Booked Electrician | None | None |
IICP 4 (Spurthika) | Booked Pedicure Service | None | Booked Plumbing Service (D15) |
IICP 5 (Tabitha) | Booked Salon Service | None | None |
- Since there are no D7 actions by any of the users, we will plot the retention curve on D1, 1st month, 2nd month, 3rd month and so on
Retention Rate for Beauty Services
Beauty services is a very personalized. If the user is not comfortable with the beauty professional or senses any negativity then the experience will be bad. Many users prefer to stick with 1-2 beauty professionals (offline or online). Users do not like to experiment with new professionals.
From our user calls and current trend, many users (including those who had booked home service as their first booking on UC) have transitioned to beauty services category in their 2nd booking, specifically - hair cuts, facials, waxing, manicure and pedicure, makeup. These services have a frequency of monthly (includes both men and woman).
- Natural frequency is monthly
- From users calls we noticed that 33% of users who had booked beauty as 1st service re-booked beauty services again the subsequent month.
- From the contribution of Beauty Services to Net Transaction Value of UC, it is clear that nearly 44% of users re-book.
(80% NTV x 55% contribution in revenue = 44%)
This is only tentative as we do not have any other data from the company.
The above Retention Curve shows the retention rates of users over 12 months period. Based on the data points collected above, we extrapolate that nearly 50% of users drop of after 1st booking due to the below mentioned reasons
- Factors for drop-off after 1st booking:
- From the reviews we noticed that many users are not satisfied with the service provided by UC
- The same service professional they got on the 1st booking is available for the 2nd booking
- The time slot for their second booking is not available
- The price of same service on competitors platform is cheaper
- Beauty is a very personalized service
Due to monthly natural frequency of the service, users experience the 2nd booking. If they have booked the second booking, then it is evident that the service was received well and hence there is only a 5% drop-off in the 3d month.
Due to the composition of the services under beauty category, users book up to 2 or 3 services every month. Hence, the retention rate stays between 30 to 33%.
This is where the curve flattens.
Retention Rate for Home Services
The home cleaning services includes services that have a lower natural frequency. Ranging from monthly to once every 3 years. From our user calls, frequency of booking we notice that users who book their first home service, tend to book their second home service only after 2-3 months.
Services like appliance repair also falls in the same bandwidth.
Assumptions
We have not included any subscription services and Native products
The above Retention Curve shows the retention rates of users over 12 months period. Based on the data points collected above, we extrapolate that:
- After the first booking of home service, due to it's lower natural frequency, retention rate drops to 0%
- About 40% to 35% users rebook in the third month and the fourth month, respectively as these months align with Indian festivals like Holi and Ugadi, users tend to clean their homes. This is also the time before the summer starts and users tend to book AC repair, installation or cleaning service
- Months 5, 6 and 7 are flat due to summers, monsoon and low frequency of category
- Months 8 see an onset of festivals again and marriage season in some parts of India. The same applies to Month 10 which happens to include a major festival during which users clean their houses which is followed by marriage season.
Retention Rate for UC (Avg. of Beauty and Home Services)
Channels to Drive Retention
Since, retention is a function of Activation, Engagement and Resurrection. Let's look at them one by one
The main idea behind driving retention is to increase the breadth of engagement
Channels | Reason | |
|---|---|---|
Activation Stage |
| UC being in the mature scaling stage should scale the following:
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Engagement Stage |
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Features or Sub-Products that Drive Best Retention
What's Included | ||
|---|---|---|
UC Cover Promise |
| This extends the CVP of UC by providing a promise that UC is providing quality services, it is ready to replace if any damage happens, the prices are fixed. All the 4 items are targeted to solve important pain points of users |
Native Products | Water purifier and Electric Lock | These products even though are bough once in every 3-6 years, the interaction with the product is daily which increases the TOMA for UC, thus increasing brand recall for other services. |
Subscription | Take monthly subscription for services like bathroom cleaning | Increase frequency of use case and depth of engagement |
High Frequency Products | Ideas
| Adding more and more high frequency products will enable UC to provide breadth of engagement and lowering the frequency. This increases ARPU |
Insta Help | Get a help in 15 minutes | Aligns with CVP, increases breadth and depth |
Churn
Churned User
A churned user would be one who has not booked a service for 2 months.
Why?
Since, all the services have different natural frequencies as listed out in the natural frequency section above, we notice that beauty services have a natural frequency of at least once per month and this was validated by the user calls as well. Most of the ICP's booked beauty services once per month.
Coming to the home services, the natural frequency is low for majority of the services in this category except bathroom cleaning. This was validated in user calls as well. Time lapse between subsequent bookings in home services is at least 2 months.
By taking the maximum time i.e., 2 months we assume that a user has churned if service is not booked in this period as most services get covered in 2 months.
Reasons to Churn
Reason | Category | User Insight Indicating Churn |
|---|---|---|
Increase in Pricing | Voluntary | UC was offering very competitive prices that were lesser than beauty parlors and offline home service provider. However, the prices have increased and other competitors like Yes Madam are offering Beauty Services at much lower prices. |
Low Frequency of Some Services | Voluntary | Many services that UC offers has a lower natural frequency that would cause users to churn as they are not looking to try higher frequency services. |
Post Sale Customer Support is Impossible to Reach | Voluntary | Many users have posted in their reviews that the customer support is impossible to reach and an AI chat bot has replaced human support. This is a major reason for churn as many users may not be comfortable or tech-savvy to speak with an AI with limited capability. |
Inconsistency in Service Provided | Voluntary | UC aims to provide standardized services, some users have experienced that the service provided by UC for the same service lacks consistency. For UC, customers experience of service is everything, if the experience was not good then user would not book a service for long time. |
Service Provided was Not Good | Voluntary | 2 of the users I spoke suggested that services related to male grooming are not good. The service provided was not up to the mark and thus would cause user to not book other services. |
Late Arrival of Service Professional | Voluntary | On-time arrival is a CVP for UC along with convenience with regards to time for the user, if the service professional arrives late then users would not want to book any service again. |
Booking Slots not Available | Voluntary | Availability of booking slots is CVP of UC. If the platform doesn't have a wide network of professionals then booking slots will not be available to users as the whole point of booking at-home service revolves around the time convenience of the user. |
Service Professional further Damaged the Product (Fridge, AC etc.) | Voluntary | In instances where services professionals did more harm than good, a user would churn |
Minimum Cart Value | Voluntary | A user I spoke with said that services like fan cleaning which cost 49 cannot be booked, even if 3 fans are booked as their is a minimum cart value ceiling limit thus causing users to churn |
Quality of Work | Voluntary | If the quality of work done is not good then a user will churn for example if waterproofing was not done with quality materials and work, then it would leak and cause user to not trust UC again. Which is again a CVP |
Shifting to Another City | Involuntary | Shifting to a city where there UC is not available |
Death | Involuntary | Death of the user would cause churn |
Injury or Health Issues | Involuntary | Users unable to continue workouts due to injuries or health conditions, temporarily or permanently. |
Financial Constraints | Involuntary | Unexpected financial setbacks force users reduce some additional spends like beauty and spa. |
Negative Actions
Negative Actions | Reason |
|---|---|
Increase in customer support service requests | Is a clear indication of dissatisfaction for a service as a single user has raised multiple tickets |
Increase in lower CSAT score due to unresolved support tickets | From user calls and reviews, it's understood that users are not happy with the AI support offered by UC causing many unresolved requests. If the support feedback is taken and user provides lower score then it indicates dissatisfaction with service as well as post sale support |
No subsequent booking for beauty services with monthly natural frequency | Beauty services is one of the key categories with higher natural frequencies and loyal customer base. That is most ICP's book this category every month. If a service in this category was not booked for 1-2 consecutive months it indicates that the user has churned due to bad experience of price |
App Notifications Turned off | Throws light that the either the push notifications are too much, user does not not want to book those services |
Location Permission Turned off | Location setting is a key CVP and commitment action, if this is turned off then it indicates that the user does not want to use UC |
Users posting negative review on Google or App Store | User is not happy with the service provided and has shown his dissatisfaction in UC app |
Increase in app opens and session time without proportional increase in bookings | This indicates that the user is visiting the app, checking the price or other details but not booking the service. For example, the app opens for a user is 4 times per month and each session lasted about 2 minutes but no service was booked. |
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