REDBUS CASE STUDY

Name: Shashank Karanth

Identify at least 3 key metrics for RedBus that you, as a Growth PM, would monitor actively
in order to improve its transactional funnel? Also, provide relevant reasons for considering
Question 1 these metrics.

(Instructions: Review their app and website thoroughly to be able to come up with relevant
metrics.)
1. Number of Engaged users: Engaged users means the number of people that are
actively using the product
2. Average Ride per month: Average ride per month to understand the revenue
generation per month
3. Daily Active User: Daily active user is the number of active users per day. An Active
user is one who signed in an account and performed some valuable activates.
Response 4. Customer Retention Rate: This metric will measure the number of users retained
after using the service. The percentage of users who return to your site or app.
5. Refund and Cancel rate: If the user is booking ticket and cancelling frequently.
Understand the reason and take feedback while cancelling the ticket.
6. Customer Lifetime Value: This metric tells how much revenue a customer will bring
during their lifetime as a paying customer. CLV helps to develop strategies to
acquire new customers and retain existing ones.
7. LTV: LTV of different customer groups tells where to focus to grow the business
and which traffic sources give most valuable customers.

Revenue:
1. Monthly Revenue: This metric provides the measure of revenue earned per month
and allows to compare the company’s performance month over month.
2. Conversion Rate: This metric helps us identify how many visitors actually book a
ticket, also helps check each stage of the funnel as to which stage has the most
drop-off.
3. Average revenue per customer: The Average revenue per customer metric helps in
calculating the average amount of monthly revenue that you can receive per user.
Monitoring the changes in the ARPC metric would be helpful in tracking the growth
and revenue generation on a per unit basis.

The Metric that needs active monitoring:

• Conversion Rate: As this is a metric which helps us identify how many visitors
actually book a ticket, also helps check each stage of the funnel as to which
stage has the most drop-off.

Question 2 Which of the 3 user segments could be the most valuable for achieving your business
objective? Explain your reasons behind selecting these segments.

(Instructions: Explore the behavioural, demographic and technical segmentation

categories, which you learnt about earlier)

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 REDBUS CASE STUDY

• Behavioural Segmentation: This helps in designing the product features

according to the preferences of the majority customer base.
o Preferred travelling mode: In Tier 2 & Tier 3 cities people mostly
Response travel via bus as air connectivity is a bit scarce, Trains usually rub
completely booked during peak season hence traveling by bus would
be the only option.
o Factors affecting purchase behaviour: Price, offers, discounts, service,
brand, availability, personal experience.
o Bus Hiring customers: Tier 2 cities are a hub of tourism, group booking
or hiring a bus for private use is also an option for tourists.
o Preferred booking mode: Now-a-days people are more tech savvy and
also the reach of smart mobile devices in Tier 2 & 3 cities have
increased, people prefer using their smart phones rather than laptops
due to convenience.
o Social media influence, SMS and email awareness to consumers.
• Demographics Segmentation:
o Location segmentation: Tier 2 & Tier 3 cities
o Age Segmentation: Mostly people in the group of 20-40years of age
travel, employees frequently travel, Tourists (Group booking)
o Gender: Its usually Male gender who travel frequently for business
travel or for studies.
• Technical Segmentation:
o Operating Systems: Android, iOS, Windows & MacOS
o Devices: Smartphones, Desktop & Laptop
o Browsers: Chrome, Firefox, Edge, Safari
• Psychographic Segment:
o Travel Frequency: Mostly Indians travel twice a year. College Students
or Business personals travel frequently.
o Seasonality of Travel: Majority of Indian travellers (~80%) make travel
plans according to their planned vacations and Festive season.
o Travel Motive: Business, Pilgrimage, Leisure, Celebration.

A. Write down the steps involved in the checkout funnel for RedBus?
B. Which 4-5 cuts or parameters would you use in order to monitor this funnel on a
Question 3 daily basis?

(Hint: For instance, you could consider the usage across Android, iOS, web and mobile web.
This would be a cut or a parameter by ‘platform’. You must identify and mention other
such parameters.)

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 REDBUS CASE STUDY

Assuming you are already a registered user, the steps for Checkout are

1. Search for a Bus: A user enters the To & From destination details along with the
date of travel. User can use various filters for comfortable journey like sleeper,
non-sleeper, AC/non-Ac, live tracking etc and sort the criteria to make the search
result page more relevant to him.
Response 2. Choose the bus: User selects the bus based on his travel preferences and from the
(3A) search results. View the various amenities that the bus operator provides. User can
view pictures, user reviews bus timings etc.
3. Choose Preferable seat: Once the user has selected the bus he then can select the
seat of choice from the bus seat layout provided and from the available seat.
(Available & Non available seats are marked clearly)
4. Review the details of booking: The user will do a quick review of the booking, date,
time, total cost, boarding & drop off points. The user can go back to make any edits
before confirming the booking. The user gets a 20 min buffer to complete his
booking. In the meantime the selected seat would show as booked for other users
who are looking at booking tickets in the same bus.
5. Payment: Once the user has reviewed and confirmed the details the user proceeds
further to select his preferable mode of payment through Credit Card, Debit Card,
Net Banking or various Mobile Wallets. Once he completes the payment his seat is
confirmed and he gets the booking details and ticket as SMS, e-mail, RedBus
account & WhatsApp if the option is chosen.

User Journey:

USER Login Screen. Search for Bus. Select from list

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 REDBUS CASE STUDY

Select a seat Review & Choose a Payment method

Response
(3B)

Receive the confirmed ticket on

Whatsapp

Checkout Funnel for RedBus

Open App and Login

Search for the bus

Bounce rate is very high at this
stage people may not be finding
right options, price, reviews etc Choose the bus

Select seat and add

details

Review Booking
If bounce rate is high at this stage
them people are tentative of the date
but sure about the destination Payment

Ticket
received

Bounce rate at this stage meaning the payment may have

failed, session ended, it can also be due to poor connectivity

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 REDBUS CASE STUDY

The cuts that can be used to monitor the funnel on a daily basis are:
1. Cut by Platform: Total successful transactions via mobile or Web?
2. Cut by Location: Transaction on the basis of Location
3. Cut by Channels: Organic search, E-mail, Social networking, Direct, Paid search.
Channel wise transactions
4. Cut by Gender: Male or Female travellers
5. Cut by Payment Method: Credit Card, Debit Card, Wallet transaction, UPI

A. Suggest at least 2 new features and 2 growth strategies that can help RedBus
increase the number of transactions?
(Hint: Focus on increasing customer engagement and retention, as the key
Question 4 business objective is to increase the number of transactions without increasing the
customer acquisition cost.)

B. What are the metrics that you would use in order to measure the success of these
features and strategies? Also, provide reasons behind choosing these metrics.
(Note: Mention at least 3 key metrics, along with valid reasons for considering
them.)

New Features and Growth Strategies to increase the number of transactions are:
1. Smart Boarding & Drop-Off points: Based on the customer location and intended
destination, the app should suggest the nearest Boarding/ Drop-off points showing
on a map.
2. Show Cancellation Policy: Show the cancellation policy of each bus operator as
most of the time people are not sure of the travel dates but are sure of the
Response destination. Showing the cancellation policy during the search can help user plan
(4A) their trip & confirm the booking.
3. Provide Local Language customer support: Especially in Tier 2 & 3 cities people
mostly speak & understand their local language only. RedBus can help provide local
language support.
4. Sharing of the bus tracking details: There should be an easy bus tracking sharing
system for others to track the bus even without installing the app.
5. Campaign offer specific to Cities: Certain cities/states have specific festivities
where the travel frequency is high, if RedBus can target city/state specific
campaigns then we can have more customers onboarded.

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 REDBUS CASE STUDY

6. Membership plan: If a user is a member of RedBus, based on his travel history,

number of rides RedBus can provide the user personalised discounts & offers.
7. Easy & Fast refunds: If a user has to cancel the travel its really a hassle to connect
with the customer support to get the refund basis the refund policy, make it simple
& clear with timelines for the amount to be credited to the account & provide
alerts for each steps and the progress made.
8. Offline Affiliate Marketing: People usually prefer offline bus ticket booking,
affiliate marketing is one of the easy way to book a bus ticket.

Metrics that can used to measure the success of the features & Strategies
1. NPS Score: This should be increased and is the most important metric is the
Response conversion ratio of users buying bus tickets should improve.
(4B) 2. MRR Churn: Revenue lost from customers who cancel the tickets.
3. Customer Retention Rate: This metrics will measure the no of users retained after
using the service. The percentage of users who returns to the site or the app.
Question 5 According to you, what are the major challenges that RedBus could face in the next 12-24
months?

(Note: Mention at least 3 major challenges, along with valid reasons)

• Smart phone penetration in the Tier 2 & tier 3 cities is less hence people still
believe in offline ticket booking
• Slower mobile network and coverage of 4G network
• Trust in the online platform for sharing banking details & credentials
• Middle-aged and elderly people are reluctant to opt for online ticket booking due
to the involvement of technology which becomes very inconvenient for them and
Response hence prefer offline modes of booking tickets.
• Buses not having GPS tracking makes it difficult to rely on the tracking and time
• Tier 2 & Tier 3 cities people still prefer paying by cash, Business hub cities still
prefer cash transactions. Even some bus operators prefer cash transactions.
• Female safety is one of the major challenges
• Operator unwillingness and awareness
• Current Pandemic situation where people are reluctant to travel in bus and prefer
to use their own vehicle makes it difficult to RedBus and the Bus operators to
sustain the business.

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 REDBUS CASE STUDY

Parameters Weightage
Criteria Does Not Meet Expectations Meets Expectations
(%)
Identifying key Fewer than 3 key metrics have
At least 3 key metrics have been
metrics that are in been identified and a relevant
Identifying identified correctly. Also, a valid
accordance with 20 explanation to considering
Key Metrics explanation for considering these
the business these metrics has not been
metrics has been provided
objectives provided
Defining user Fewer than 3 user segments At least 3 user segments have been
segments based have been mentioned, and mentioned, and these user segments
Defining User on different they are not classified based on have been classified based on
15
Segments segmentation demographics, demographics,
techniques behavioural/psychographic and behavioural/psychographic and
technical categories technical categories
Identifying the
All the important steps of the All the important steps of the
Funnel steps involved in
10 checkout process have not checkout process have been
Analysis the checkout
been mentioned correctly mentioned correctly
process
Mentioning the
Listing parameters for the Fewer than 4 cuts have been At least 4 cuts have been provided,
Parameters that cuts you will 10 provided, without any along with valid reasons for
for Cuts use to monitor the explanation considering these cuts
funnel
Suggest new At least 2 new features and 2
Fewer than 2 new features
features and growth strategies have been
Suggesting and 2 growth strategies have
strategies that can mentioned, along with a relevant
New Features mentioned, without a relevant
help redBus 20 explanation
& Growth explanation
increase the
Strategies
number of
transactions
Mention the key
metrics that would
Fewer than 3 metrics to At least 3 metrics to measure the
you use to
Identifying measure the success of the success of the suggested features
measure the 10
Key Metrics suggested features and growth and growth strategies have been
success of these
strategies have been identified identified
features and
strategies
List down the
Fewer than 3 challenges have At least 3 major challenges have
Identifying major challenges
15 been listed, without any been listed, along with a relevant
Challenges that redBus could
relevant explanation explanation
face

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 REDBUS CASE STUDY

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