Pay Now, Get Later. How Ola Electric used Call of Duty’s playbook.
Imagine you go into a bookshop wanting to buy Amitav Ghosh’s latest book, ‘The Nutmeg’s Curse’. It costs a few hundred bucks which you pay.
But at the counter you get the book with only one chapter. And you are told that Ghosh is still writing the rest of the book. So, as the chapters get completed, you would receive them.
You don’t know when you will get it. You may not like what you get.
But you cannot get your money back!
Would you buy the book?
Then think of why so many people have bought an Ola Electric scooter?
Where you have paid the full money upfront. Yet the scooter’s best features will remain missing for a while!
The answer to the why lies in another industry which has perfected this marketing process of “Pay Now, Get Full Product Later”, in the process making millions.
That would be the gaming industry, which now dwarfs the entertainment industry. It has created a rulebook which Ola seems to follow.
The rulebook of taking making the consumer pay for the entire product while actually shipping an unfinished one.
Ideally, a rational consumer would be agitated, right?
The millions that the gaming industry makes suggests otherwise.
Why? It is because of a three letter word that we have accepted as a part of our daily digital life. As every product becomes connected, it’s something that product companies are increasingly relying on.
OTA Or ‘Over the Air’ Wireless Programming
OTA developed as the best way for device manufacturers to update the firmware and resolve bugs without needing to upgrade each device manually. Primarily used in the mobile device industry, today it can upgrade any device that can connect to the internet.
So companies can use it for original purpose — like say your phone software gets upgraded without you needing to buy a new phone to get a refreshed UI (user interface).
Or OTA can pave the way for a money grab by giving a half-baked product with a promise to give a full experience later down the road.
OTA is the most important component of the rulebook that gaming companies use, which Ola is taking a leaf from.
The rule book of ‘Pay Now, Get Later’.
Gaming Industry behemoths like Activison (developers of Call of Duty Franchise) and others like EA Sports, Ubisoft etc have a simple playbook.
- Take a game which has a huge following like, say, CoD franchise (Call of Duty). Key is to have a brand that people love and trust.
- Create a new game of the same franchise. Focus on high octane marketing blitz with pixel perfect graphics and ‘Next Gen’ features. Get people excited to get their hands on the game. The actual game is completely different and carries just enough about the original brand to make it seem similar. This is an important feature which I will talk about.
- Charge the customer full money to pre-book. So that they are first to play, which gives them a sort of social bragging rights.
- Meanwhile, rush through development to create a game which is an MVP (Minimum Viable Product), which has maybe 50–60% of what they promised
- Promise that the features will be released over a period of time via OTA. This is the most important step. Constantly being upgraded is a good carrot to give.
- Release the game, have a good PR team to handle the inevitable backlash. Use the feedback of the fan base to figure out bugs. Helps to shorten the QA (quality analysis) process.
- Start releasing the features one by one in updates (including the bug fixes), which itself becomes mini marketing activities. Game keeps on becoming “new”.
- Keep shareholders happy with step 3. All the money is already made!
Sounds familiar with what is happening with Ola electric?
Let’s quickly go through how Ola followed this checklist.
Along with that, I’ll also attempt to mention the brain hacks that allow them (like the game companies) to get away with it.
Step 1 and 2. — A Brand that people trusted. Creating a new brand which looks familiar but isn’t.
Ola Electric already had the brand Ola with them — which people associated positively with, being a part of their familiar everyday life.
But because of a cognitive bias called Familiarity Bias, people readily associated the brand qualities of Ola (quick, easy to use and always at fingertips) to the brand Ola Electric (the fact the anything Electric is flavour of the season, helping no doubt!).
Familiarity Bias. Essentially, our tendency to stay in our comfort zone. If something looks familiar, it’s good for us.
Ola was obviously counting on it. From logo to the color palette, everything reminded you of the ride app company.
But the products are, of course, very different. Ola is essentially an app with no physical constraints. Ola Electric is a physical product development and distribution business, which needs to follow rigorous testing mechanisms which typically take years. You can OTA a software, not the actual engine.
Parallelly, Ola Electric painted the town green with advertising. This plays into another cognitive bias called Availability Bias.
Availability Bias. People believe that if they can remember something easily, it must be more important. Availability bias gives a false sense of familiarity when actually all you are seeing is a repetition.
This is why high voltage, big budget, omni channel advertising is effective. If you start to see ads, PR news and review videos everywhere, you feel you already know everything there is to know about it.
Because you can easily recall it (Top of Mind) and everyone is talking about it (called a Feedback Loop resulting from the bias itself)
Step 3 — People buying full price for a product they feel is complete
This was one of the most interesting part of Ola Electric’s marketing strategy.
While the biases above make you want the product, Ola Electric made an offer you could not refuse. At only 500 bucks, the final decision-making process became an easy one.
Touted as a booking amount to ensure you are the first to be a proud owner of an Ola Electric scooter, it played into two quirks of human psychology.
Social bragging rights and a cognitive bias called Sunk Cost Fallacy
Sunk Cost Fallacy. Once an investment in money, effort, or time has been made, people tend to continue that process, often becoming irrational in their commitment.
Ola Electric made the booking amount so ridiculously low that you did not even have to forego your daily coffee budget. This led to a surge in bookings.
And when the time came to pay the full amount, almost everyone paid up. There was still no product in sight, though. Not even a test ride!
A classic case of one bias strengthening the other.
Steps 4 and 5 — OTA based product. Tomorrow is always better
To be honest, if the production speed and quality were good and if the range was close to the claimed mark, Ola Electric would have already become a poster child of EV industry.
Even though the cool features that sets it apart don’t even have a full launch date. These are the features that will be sent via the OTA route.
We are so used to OTA for our phones, our work softwares, our entertainment apps that we do not even realize that in case of Ola Electric, you actually paid for the full features, which you will not even have for a while.
This is the genius of OTA marketing. It plays into our everyday experience and you end up paying for a future gratification, for money you pay today.
Once you have bought the scooter, you get stuck in the Sunk Cost Fallacy, so you accept it and move on.
Steps 6 and 7 — Handle the Backlash, Lie low, Work Fast to figure things out
And count on our short memory to forgive and forget.
And it will happen if Ola Electric turns around and delivers on all its promises.
Ola Electric is now in this phase. Can they do a Tesla? Possibly. They have access to an exceptional range of funding along with capabilities to pull it off.
But as consumers, you just have to wait and hope that they do
Steps 8 — Keep the shareholders happy
This has already happened with the initial rush of bookings. If you can pull in money with nothing on the ground, which investor will not love you?
I do hope Ola Electric pulls it off.
We need urgent action in the way we live and work. And going electric, with all its drawbacks, is one of them. In that regard, I would highly recommend the book I started this piece with. ‘The Nutmeg’s Curse’ by Amitav Ghosh. Here, you would get the complete book when you pay for it!
But as a consumer, it is important to not feel like a guinea pig. No matter what the intentions are, consumers being taken for a ride leaves an unpleasant taste in the mouth.
But then, it’s your money!
Me, I prefer indie game developers who are hungry to prove themselves and create outstanding finished products. So, another last recommendation. If you want to know the future of gaming and storytelling, play ‘Disco Elysium’. Where you get more than you paid for!