How to transfer a third of customers to online service using a mobile application: a case of Nova Poshta
In November 2015, Nova Poshta introduced a new mobile application for iOS and Android. Now it serves 1.7 million active users, this is up to 30% of all clients of the company. [Editor’s note: The information is actual as of the date of the original article publication.]
The head of the digital products development department, Artem Volkhonsky, told the AIN.UA editor how the mobile application was created, what it changed and how it affected the work of Nova Poshta.
Artem Volkhonskyi has been the head of digital products development at Nova Poshta since 2014. When he first joined the company, Nova Poshta already had a mobile application developed by third-party contractors.
It was the first mobile application in the Ukrainian logistics market.
“Mobile applications of companies were the hype of that time. At one time there was the same story with the sites: everyone wanted one but did not understand why.”
“Nova Poshta” has launched an application for the sake of experiment. It was rather an image step having its own application for a large company. “It was more informational in its nature, it was another place where I could, same as on the website, type in the invoice number and see the status of the parcel, or search for the nearest branch,” Volkhonskyi says.
The company did not promote the application, they simply loaded it into the market, where it had been located for several years by itself. And it turned out to be quite popular: by 2014, it had about 150,000 active users who came by themselves, since the company did not promote the application at all.
It was clear that the app can cover most of the customers’ needs. However, the first version was already technically old. In addition, in 2015 there was a rebranding of “Nova Poshta”, and the application had to at least correspond to the new design.
The question of developing a new solution from scratch arose, because modifying the old version was unprofitable. First, the functionality has not changed for several years, so it required a complete update. Secondly, the technologies did not stand still, they have changed a lot and now they gave developers more opportunities in speed, ease of support, etc.
“Further use of the old application and complication of its functionality would lead to the fact that every month we would spend more and more money to support it. Therefore, the team focused on making a completely new application as simple and convenient as possible, including one killer feature that would set us apart from the competition and in the market in general.”
A new version
Artem began by analyzing the needs in order to detect the client’s “point of pain.” As it turned out, the most popular service in the company’s online channels is parcel tracking: 65% of customers do not use anything at all except tracking. “It became clear that the killer feature should be somewhere in this place. We solve one problem and immediately simplify the life of more than half of our clients,” he says.
The team decided to simplify tracking as much as possible, and it is better to make the application that will track packages itself instead of the client doing it.
“The most difficult thing is to make it easy. We did a difficult thing to implement, but it is simple for the client: all the packages that I send from my Nova Posh loyalty program account or the ones that are heading to me get into the application automatically. It works by the principle of e-mail: I see all incoming and outgoing traffic.”
At that time, no one in the world had such a realization, says Volkhonskyi, until the middle of this year, it was unique even among foreign peers.
It took 9 months to develop a new version. The team was in a hurry: “Nova Poshta” wanted to present a new application at the large industry event of E-Commerce Congress. “At the event we came out with a beta version. We understood that some work scenarios required improvements, so after the presentation we continued to fix bugs and finish the product,” says Artem.
More than 2 million users by the end of the year
Although the new application was much more convenient than the old one, people are reluctant to part with things they are used to. Realizing that the replacement of 150,000 users of the old application may cause dissatisfaction, the team decided not to close 1.0 version for a while and migrate gradually.
“Of course, it was not painless. We left the old application and offered a new one, only for those who wanted to have choice. We transferred users to version 2.0 with waves up to 5-10% per month. The old application was closed only after six months after the launch of 2.0 version.”
The next year we were working on bugs, tightening technical debts and collecting feedback. Nevertheless, the user base grew rapidly: in the first year after the release, it was possible to attract 350,000 new active users without large-scale promo. They popularized applications only through their own channels: branches, call-center, website, and email-mailings.
Today, three years after the release, the application has 1.7 million users, which is about 25-30% of all Nova Poshta clients. By the end of the year, according to the company’s calculations, there will be more than 2 million of users.
“The application has a lot of opportunities that people lacked: managing their packages, ordering additional services (forwarding, changing data and returning), paying for services using a bank card, and creating a shipment directly in the application. This functionality was created according to the recommendations of users, and today almost 1 million shipments per month are being created in the application,” notes Volkhonskyi.
According to him, the user base is growing gradually, without any serious bursts. “Promotion through mass channels does not give such an effect on the number of active users. This should be a conscious choice of the client – the one must understand what he/she really needs. The client wants to cover the maximum of his/her needs promptly and without a physical presence in the departments.”
However, there are customers who use the services of the company rarely, so they do not see the need for an application for themselves. For these customers, the digital team plans to launch a convenient site with a mobile version.
What does the application give to the company?
According to Volkhonskyi, creating a mobile application, first of all “Nova Poshta” wanted to give the client a service that will exceed his expectations. “We were faced with the task of providing such a level of services so that the company would be perceived out of competition and there were no alternatives.”
At one time, PrivatBank did something similar. They brought banking to the deep blue ocean, which no one could reach, thereby securing a competitive advantage for the years ahead.
We also want to minimize the client’s contact with our employees, give the most convenient and understandable digital service so that a person could do his or her usual activities and not spend time on trips to the department, signing statements, etc.,” – explains Artem.
A side effect is saving money for the company itself. After all, if the client solves all the issues within the application, it reduces the load on the offices and contact center operators. The company was unable to assess the economic effect of the application in money or specific figures, however, according to Volkhonskyi, the cost of its development and support is many times lower than the funds saved for the company with its help.
“Only in September 2018, we recorded more than 1.7 million active users who created 915,000 online documents. And this figure is growing by at least 10% every month. At the same time, in the mobile application, our clients traced more than 8.5 million express-invoices, issued almost 70,000 applications for additional services (call forwarding, return and change of data) and made 137,000 online payments.”
To encourage users to switch to online services, Nova Poshta launched a motivational program using bonuses. For example, if a client has made a shipment in a mobile application, he receives 2 – 2.5 UAH to the bonus account. And if you combine a lot of shipments to the registry, simplifying their registration for the company in several times (when sending through the registry, all markings are printed immediately with one code), then you receive 3 – 3.5 UAH for each express invoice to your bonus account. Accumulated bonuses can be used to pay for services in the future.
Today, the inhouse team, which is engaged in digital projects, is still relatively small as for a company of the “Nova Poshta” scale – it’s only 11 people. However, until recently there were only five of them.
Two full-time employees are the product owner, who is responsible for developing the application, and the head of the mobile direction, who is responsible for integrating the application with other systems in the infrastructure, as well as several third-party specialists who work directly on the application on an ongoing basis.
The mobile application is only part of the cloud infrastructure in which most of their digital products will work: a business office, a courier application and a website. More than 30 people work on these projects in total.
It was not easy collecting such team. At the time of launching the development of 2.0 version, Nova Poshta was not ready to hire many specialists. “We began to look for a reliable contractor with highly qualified specialists, with whom we could cooperate as partners. We were looking not for a programmer who writes code for money, but for the one who would see the value of having such a client as “Nova Poshta”, and would grow with us and our requirements,” – explains Volkhonskyi.
The problem is that the teams that broadcast themselves to the Ukrainian market are much smaller than those oriented to the West. According to Artem, many work through Upwork and do not want to deal with Ukrainian customers at all. Therefore, the choice was small and the stage of selection of the contractor was stretched for a long time.
Today, projects are conducted in Jira, the contractor’s experts form product backlogs and two-week sprints with tasks for developers in the team. They also participate in the support of the mobile application and work with errors that are submitted by users.
Mobile application as a driver for change
It was originally intended to fine-tune the old application for the Nova Poshta company, which was updated after the rebranding. The result was the opposite: the company had to change for the application. In order for the auto tracking feature implemented in the application and other innovations to work stably, it is necessary to change the internal processes in the company.
“Over the 9 months we worked the application, a lot of changes happened in the “Nova Poshta” system. We had to completely change a number of processes in order to give customers a good user experience.”
Currently on their agenda Nova Poshta has a 3.0 version of the application. “Over the years, we have gathered enough feedback and data on user behavior to realize the need to re-launch. It will be a completely new mobile application, with different approaches in development and it will become even easier for the client,” says Volkhonskyi. The main target audience is small and medium business, but at the same time it will also satisfy the needs of private clients.
The next step will be the launch of a business office, and then a site that will simplify the relationship of corporate clients with the company through automation. The third step is to re-launch the site. “In order for us to implement all the planned functionality on the site, the company will have to change a lot in the direction of simplification, clarity and predictability again,” Volkhonskyi explains. “We will seriously change part of our tracking and notification systems before we even start working on the site itself.”