What is a typical referral programme?
You buy a product. You love it. The company tells you to share your love for it with your friends in return for lots of discounts and happiness. You share your referral code with your network. They buy, you get more of the product with less and less. Makes a lot of sense and of course that is what we are used to.
So the Sarda Farms programme had me stumped.
I refer my friends to buy Sarda. They get 30 days of free milk. In my next bill, the price is up by 10 percent. I am confused.
I call them. I tell them that this is not how a referral programme works.
They tell me: Ma’am, our concept of referral is that you share your happiness and good things in your life. You share if you like us, not because you will benefit from it.
I am stumped and I think harder…and I realise that she is right. I shared because I love the milk, I love their bottle even more and I love their mobile app the best. It makes my life simple and convenient.
But how could Sarda farm fund 30 to 60 litres of free milk to each new customer (yes you can opt for 2 litres of free milk for 30 days). I could come up with only one possible justification.
The entire farm to fork supply chain of Sarda farms is owned by them. They breed a herd of 1,300 Holstein cows on the farm on the outskirts of Nashik. The whole process from milking the cows and packaging is automated. The milk is delivered to a consumer’s home directly from the farm on motorcycles (yes Haryana style!), with no intermediaries. (Ref – http://www.businesstoday.in/magazine/features/sarda-farms-does-not-aggre…)
Now cows being cows, need to be milked daily, no matter what the demand. Sarda farms has probably invested keeping in mind a certain demand. At present, it is only relying on word of mouth referral communication for increasing demand and hasn’t invested in any aggressive marketing campaign. So it’s quite possible and it probably has oversupply. And what better way to invest the excess production than to distribute it for free to potential customers. And maybe make some ghee.
They probably would not like to compromise on the profile of customers who buy their brand. And no communication campaign can compete with WOM on reach precision to a targeted audience. If I refer, I will only refer to friends who would appreciate its worth at the higher price.
So after much thought, while they have a referral programme completely at odds with the market practice, there seems a lot of merit in it, especially since Shrirang Sarda, the owner, has chosen to get the system in place instead of mindlessly going on an expansion spree. All the best to them!