Pizza Delivery Incentives

Domino’s likes to announce that it doesn’t penalize its delivery boys for not meeting its 30-minute guarantees. It says so on its website, on its menus and the statement is even tagged on the uniforms of said boys.  This seems like a good strategy to have – after all, you don’t want your delivery people to cause or suffer accidents. It is also a good strategy to announce.  Apart from the good reputation you get, it also stops the delivery guys from giving a sob story and getting sympathetic customers to condone delays – this is assuming that Domino’s wants data on delivery performance so that it can track the efficiency of its operations.

Of course, saying that they  won’t penalize delivery boys for bad performance is not the same thing as saying that they won’t reward them for good performance. The two aren’t the same, because of the endowment effect. Then again, you shouldn’t reward them every time they do an on-time delivery, because it will effectively amount to the same thing. You need to reward them for aggregate performance.

Stocks Hypothecated to…

At Food Bazaar yesterday, there was a notice that said “Stocks Hypothecated to:”  followed by a list of banks that the stocks were hypothecated to. I know that many retailers are in trouble because of falling demand and difficulties in finance, and I can understand hypothecating your stocks to get working capital finance. But why announce that fact to your customers? What possible relevance can it have to a customer who has shown up with cash to buy toor dal to learn that the toor dal is in fact hypothecated to State Bank of India?  Obviously, once he buys the toor dal, it is his. SBI will not raid his kitchen to recover money from Big Bazaar.  It looks like some legal requirement or some requirement imposed by the creditors, but I don’t see why it makes sense to the creditors either. If at all the notice has an effect, it will make the customer unnecessarily panic, driving him away and making it less likely that Big Bazaar will make enough money to return its loan. So why put up those notices? Any ideas?

Revisiting the Bangalore Bug Problem

Over a year back I had written a post postulating that Indian IT clients are victims of the Bangalore bug. It was generally received positively. A couple of commenters had suggested two sites that could pe possible exceptions to the rule.

Of these, Cleartrip is the better candidate for an exception to the rule. Its usability is excellent and ever since I have been introduced to it, it has become my preferred choice for booking all travel tickets. But is it really an exception? To figure this out, we must understand how the problem comes about in the first place. I could summarize my post by saying that Indian IT clients suffer from the Bangalore Bug in that they do not get  all these three factors for success at one place:

  1. Technical Skills
  2. Business Skills
  3. Money

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