Few companies have had more of a disruptive impact on business in the last five years than Uber Technologies. Not only has it disrupted the monopoly of the taxicab industry, it has become the face of the on-demand economy, with a business model that is quickly becoming the template for dozens of startup companies serving several different industries. Uber is by far the most successful company in the new economy, growing its valuation to more than $60 billion since its launch in 2009.

That might lead most people to think that there is a vast, multi-billion-dollar marketing strategy behind the company’s staggering growth, but there isn’t. In fact, companies trying to replicate Uber’s business model will find its marketing strategy to be somewhat pedestrian, but it executes it brilliantly.

Here is what companies venturing into the cyber-driven, on-demand economy can learn from Uber’s marketing strategy:

Start with a Solution People Want

Uber found an easy target in tackling the taxicab industry. In most cities, the taxicab industry is marred by poor service, poor response times, dirty cabs, rude drivers, and a generally poor customer experience. For people who use cabs out of necessity, cabs have become a necessary evil. Uber reimagined the entire experience by making it more convenient, more reliable, more seamless – generally more enjoyable. Uber’s first launch city was its home base of San Francisco, which happens to be home to a large tech-savvy population that looks for ways to use technology to improve their quality of life. The fact that the city has a poor cab infrastructure to begin with helped Uber become the cool, high-tech “wow” solution at the right time and place.

Turn Early Adopters into Raving Fans

Like many technology companies, Uber set out to build an early-adopter community and convert them into champions for the company. Uber targeted the tech community by sponsoring tech events and then providing free rides. Uber could count on these attendees to take to their blogs, social media and the tech press to spread the word. Uber made sure the ride experience was unlike any other, which was enough to start the buzz. With launches in other cities, Uber did the same thing by branching out to the sports and entertainment industries.

Word of Mouth from Raving Fans

If you were an early adopter of Uber’s ridesharing app, you probably used it each time you wanted to impress a friend by having a personal ride show up within five minutes. Early adopters and the new customers they recruited became brand advocates who created a network effect that grew exponentially. Uber says that 95 percent of its riders heard about Uber from other riders.  Realizing that growth by referral can tend to flatten, Uber fans the flames by rewarding riders with free rides for referring customers.

Keep Your Fans Close

Uber launched a loyalty program that enables riders to earn ride credits. It also offers free ride credits to first-time users. Having their fans rave about free rides to their friends and on social media is worth millions in advertising.

Go Where the Action Is

For its launch in San Francisco and other major cities, Uber made sure to make its superior solution available to people in need. The larger cities that have big nightlife scenes, lots of sporting and theater events and big celebrations, along with intense weather and poor taxi service are prime locations for Uber services. So, when launching a new city, it goes where the action is, focusing on events where it can provide new riders with the uncommon experience of getting an immediate ride in a clean car. Uber often offers discounted rides for riders attending particular events. Wherever Uber launches across the globe, it takes the extra measure to localize its services to meet the unique needs of a particular area.

Add a Personal Touch

Uber’s tag line says, “Your personal driver. It lets customers travel in style.” Before your Uber arrives, you already know the driver’s name, what he or she looks like, the type of car, and the driver’s rating by other riders. By the time the driver arrives, you feel as if you know him as he addresses you by your name. Next to having their services delivered on demand, people value the personal touch.

Partner with High Visibility Brands

One of the fastest and most cost-effective ways to increase ridership, legitimacy, and brand awareness is to partner with other high visibility brands. Uber has partnered with hotel chains, such as Starwood Hotels, and credit card companies, such as Capital One and American Express, in their rewards programs. Riders can earn points in their loyalty programs with each ride they take. Through its partnership with Spotify, Uber allows riders to link their music profile to their Uber account to play their favorite music during their ride.

The massive success of its rideshare app has encouraged Uber to enter other on-demand spaces, such as food delivery with UnderEATS, and business-to-business delivery services with UberRush. It is even testing a flu shot delivery service with UberHealth. All fall within a primary business model that merges mobile technology and data to create an uncommon customer experience built on convenience, fair pricing and the novelty of it all. Layered on top of its business model is a very basic marketing strategy: Make customers happy and make it easy for them to tell the world. A lesson other businesses would do well to follow.

 


The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.