Our client is a leading courier delivery services company. Established in 2009, they are an in-house supply chain subsidiary of India’s largest electronic commerce company. Our client has powered the e-com’s growth with innovations such as Cash on Delivery, In-a-day guarantee (50 cities), Same-day guarantee (13 cities). The company delivers around 10 million shipments a month to 3800+ pin codes. A Singapore-based company, invested Rs.1641 crore in the company in October 2017.

Our client delivers on a consistent excellence in consumer experience by delivering reliably and managing variability at scale, they now also offer last mile delivery to even external brands, sellers and platforms.

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The Delivery Executives (DEs) are the bedrock of robust logistics management. Delivery performances can make or break the customer’s brand experience and it is seen that 73% of customers will not return after just one poor delivery experience. That said, the last-mile of a package’s journey can cost up to around 25% of the shipping costs and 28% of an online brand’s bottom line seemingly comes from last-mile delivery costs. In 2018, a study revealed that businesses spent approximately $10 per order on last-mile delivery alone. With the consumers wanting everything right there and then, there is a race for the fastest delivery to the consumers. Dispatching the orders precisely, to the right location and correct time can help increase efficiency and decrease delivery time - and incentives play a vital role in improving these efficiencies.

Another aspect to this efficiency is a function the very nature of engagement DEs have with the organisation. The DEs essentially belong to the much fabled gig-workforce and their performance is seen to be highly elastic to a perceived opportunity to earn above their fixed-income every month. These incentives self-motivate the gig-workforce to perform better and showcase a positive behavior set. On an average, a delivery executive is paid between Rs.10,000 to 20,000 as a fixed remuneration and completes 30 deliveries per day (depending on the city). Additionally, there's a cost of training, hiring, and re-hiring (considering the segment faces attrition that goes to as high as 70% yearly) - adding the importance to investing in DE retention programs.

True to the above stats, our client needed to launch an internal Reward and Recognition program to motivate and influence the efficiencies of their Delivery Executives. Such incentive programs are crucial to driving the organisation’s delivery efficiency goals. For this, they needed a solution that unified Rewards and Recognition for all their delivery executives across their country delivery operations.

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Functional requirements

Demography

Composition of the Compass Users

Group 1:

Understanding the Delivery Executive:

There were six key personas amongst the delivery executives which helped the team understand their key motivators :

Results relevant to Compass implementation:

• 79% are elastic to incentives - indicating that most of the delivery executives shall perform more for incentives
• 48% have low stickiness - indicating that incentives will play an important role to prevent a switch
• Fuel, Grocery, Mobile, Edtech related offers (from the Perks offerings of Compass) shall play a differentiator

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Group 2:

Zonal Ops heads (Admin) - 31

Key Objectives

1. Improving delivery efficiencies
   Last Mile delivery efficiency affects the overall logistics costs and, as a consequence, the economic sustainability of a B2C e-commerce initiative. For this very reason, the last-mile delivery process deserves particular attention in order to be optimised. While the punctual and speedy delivery is in, the major factor that constitutes a good fleet performance is the drivers that work on to prompt deliveries. The quality of service that the fleet offers contributes to the overall customer experience. As in for every system etiquette, punctuality is key in the last mile delivery system as well.

2. Reducing Fake delivery attempts
   A fake delivery attempt is when despite the receiver being at the destination address receives a message that ‘delivery was attempted but the customer was not available’. While the customer can register a complaint, for the courier partner it is impossible to verify whether their delivery person attempted the delivery or not.
   For every RTO arising out of a fake delivery there is a cost incurred for the re-attempt, marring the client’s profit margin. Resultantly, Fake Delivery Attempt is one of the most prominent challenges faced by the Client at present which directly impacts their customer retention and satisfaction.

Incentive structure

The client has 2 bands of engagement with the delivery executives - a captive band for ADM ( Alternate Delivery model) and e-commerce delivery and a band of part timers. A high rate of turnover is intrinsic to this segment and 48% of them are found to have low stickiness. For this very reason, having the executives motivated and delivering their best every working day is critical to their operational efficiency and customer satisfaction.

Key Goals & Behaviours

Goal 1: Improving delivery efficiencies

The delivery incentive program aims to recognise and reward delivery performances of executives and help them do more of the right activities that aid delivery efficiencies.This incentive program offers different award categories for you across the hub level, zone level and region level. The primary goal of the executives is to achieve top ‘conversion rates’ that amount to the percentage of successful deliveries made versus their daily delivery targets.

Goal 2: Reducing Fake delivery attempts

As discussed above, fake delivery attempts are a critical issue to the delivery efficiency and reducing it is a key business goal. The ‘fake rate’ metrics are captured in real time by their delivery management system and an inverse incentive design that motivates the executives to do less of fake deliveries.

Goal 3: Providing performance visibility for the hierarchy.

For the incentive program to achieve its full circle, it is essential that the hierarchy gets the visibility of the achievements and leaderboards from the hub, region and zonal levels. This way, the managerial cadre shall be updated on who their top performers at various levels and inturn, appreciate them for their performances.

Rewarding Logic

Goal 1: Improving delivery efficiencies

The delivery executives earn points based on a conversion slab system every week. End of the evaluation period, the toppers of the chart get rewarded.

• Category 1 Award - Executives can win and earn $2 every week (Top performer @ Hub level)
• Category 2 Award - Executives can win and earn $20 every month (Top 2 performers @ regional level)
• Category 3 Award - Executives can win and earn $200 every quarter (Top 5 performers @ Zonal level)

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Reward points based on Conversion Slabs:

Frequency

Reward points

Goal 2: Reducing Fake delivery attempts

Similarly, the delivery executives earn reward points based on a decreasing conversion slab system every week. End of the evaluation period, the fake delivery reward points are added to the conversion points.

Fake:

Goal 3: Providing performance visibility for the hierarchy.

Admin privileges need to be given  to the Leaders so that they will be able to see the Leaderboard/ dashboard of executive performances through web login. The leaders will be able to view the rewards achievement based on award type and view the dashboard where they will be able to see performances of one Zone at a time based on the option selected in the drop-down.

Our client wanted to leverage technology to create customized experiences by analyzing member data from multiple sources - including their CRM, biometrics, interests, platform usage, and other sources of data to discover user wellness activity. All the while, they wanted to ensure the highest levels of data privacy, security and compliance standards.

The requirements could be summarized as below:

• Incentivize their members using rewards and engage them using communities.
• Use activity and performance-based rewards to motivate their members to participate in various wellness programs participate in various wellness programs
• Increase the usage  of online trainings conducted by national and international trainers