TRIMSTER: HOW PAYMENT MODES CAUSE ORDER RETURNS
CASE STUDY SOLUTION
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SYNOPSIS
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Trimster, an e-commerce start-up founded in 2015, was a premium personal care and grooming solutions
brand headquartered in New Delhi. In 2023, Rishi Anand was the senior vice president of sales and
marketing at Trimster. The company catered to a relatively new market and faced many challenges. Its
primary challenge was customer acquisition, and with new companies entering the market the competition
n
for customers was only going to become more difficult. In a country where trust deficit was a primary
reason for the failure of new brands, most customers preferred cash-on-delivery (COD) modes of payment.
tio
Companies, however, preferred prepaid orders because they guaranteed the customer’s intent to purchase.
Anand knew that allowing COD orders would help Trimster to acquire new customers. However, COD
lu
orders were much more likely to result in a return to origin (RTO) than prepaid orders. Offering COD as a
mode of payment would take a heavy toll on Trimster’s reverse logistics costs, thus stretching the
So
The Case Solution Starts From page 6
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ASSIGNMENT QUESTIONS
1. What should Trimster’s customer acquisition and retention strategies be?
2. What are the pros and cons of prepaid and COD modes of payment? What would be the financial impact
of Trimster opting for either a prepaid-only or a COD-only mode of payment?
3. What would be the financial impact of Trimster maintaining its existing modes of payment and attempting
to reduce RTOs through applying friction points and enlisting the services of a solutions company?
4. If Trimster enlists the services of a solutions company and applies friction point, what would the
company’s earnings before interest, taxes, depreciation, and amortization be after one year (assuming
that the reduction in RTOs persists, there is no change in the cost of services, and the number of orders
is constant)?
The Case Solution Starts From page 6
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ANALYSIS
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1. What should Trimster’s customer acquisition and retention strategies be?
lu
While Trimster has taken numerous steps to increase its customer footfall and brand visibility, the company
needs to focus on CRM, including customer acquisition and retention strategies.
So
Social media has become increasingly popular over the last several years, making it a powerful digital
avenue to capture customer voices. Trimster needs to revitalize its traditional CRM and move to social
CRM (see Exhibit TN-1). This new approach to managing customer connections uses social media–based
technology (including social networks, microblogs, online reviews, and other platforms) to accomplish
CRM objectives. Social CRM has several benefits for customer acquisition, customer retention, and
relationship termination.
• Customer acquisition: Trimster can use social media to engage customers by running brand
promotions on platforms such as Facebook, YouTube, and Instagram. Customer actions and
involvement on these platforms can help these promotions find the desired target audience and change
attitudes among prospective customers.
• Customer retention:
The Case Solution Starts From page 6
, EXHIBIT -1: DIFFERENCES BETWEEN TRADITIONAL CRM AND SOCIAL CRM
Characteristics CRM Social CRM
Utilize a database of customer
information (which is accessible to all
Role of Use customer data to assign tasks to employees) to actively engage target
employees specific departments. customers.
Adopts a conversation-centric
approach where the strategy evolves
Follows a process-oriented strategy depending on customer social media
Strategy where the workflows are pre-defined. activity.
Management
mode
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The Case Solution Starts From page 6
, EXHIBIT -4: INCOME STATEMENT FOR TRIMSTER UNDER PREPAID-ONLY SCENARIO
Percentage Target
Remarks
of Sales (USD)
GMV 100% 1.75
Channel margin For Trimster, 37% of products were sold
through alliances at a 60% discount and 63
% of products were sold through the
44.25% 0.7744
company website at a 30% discount.
Therefore, 0.37 × 60 + 0.63 × 30 = 41% of
GMV.
RTO 4% 0.07 Includes only Prepaid RTO costs.
GST 7% 0.1225
Net sales
e
pl
m
Sa
n
tio
lu
So
The Case Solution Starts From page 6
CASE STUDY SOLUTION
e
pl
SYNOPSIS
m
Sa
Trimster, an e-commerce start-up founded in 2015, was a premium personal care and grooming solutions
brand headquartered in New Delhi. In 2023, Rishi Anand was the senior vice president of sales and
marketing at Trimster. The company catered to a relatively new market and faced many challenges. Its
primary challenge was customer acquisition, and with new companies entering the market the competition
n
for customers was only going to become more difficult. In a country where trust deficit was a primary
reason for the failure of new brands, most customers preferred cash-on-delivery (COD) modes of payment.
tio
Companies, however, preferred prepaid orders because they guaranteed the customer’s intent to purchase.
Anand knew that allowing COD orders would help Trimster to acquire new customers. However, COD
lu
orders were much more likely to result in a return to origin (RTO) than prepaid orders. Offering COD as a
mode of payment would take a heavy toll on Trimster’s reverse logistics costs, thus stretching the
So
The Case Solution Starts From page 6
, e
pl
m
Sa
n
tio
lu
So
ASSIGNMENT QUESTIONS
1. What should Trimster’s customer acquisition and retention strategies be?
2. What are the pros and cons of prepaid and COD modes of payment? What would be the financial impact
of Trimster opting for either a prepaid-only or a COD-only mode of payment?
3. What would be the financial impact of Trimster maintaining its existing modes of payment and attempting
to reduce RTOs through applying friction points and enlisting the services of a solutions company?
4. If Trimster enlists the services of a solutions company and applies friction point, what would the
company’s earnings before interest, taxes, depreciation, and amortization be after one year (assuming
that the reduction in RTOs persists, there is no change in the cost of services, and the number of orders
is constant)?
The Case Solution Starts From page 6
, e
pl
m
Sa
n
ANALYSIS
tio
1. What should Trimster’s customer acquisition and retention strategies be?
lu
While Trimster has taken numerous steps to increase its customer footfall and brand visibility, the company
needs to focus on CRM, including customer acquisition and retention strategies.
So
Social media has become increasingly popular over the last several years, making it a powerful digital
avenue to capture customer voices. Trimster needs to revitalize its traditional CRM and move to social
CRM (see Exhibit TN-1). This new approach to managing customer connections uses social media–based
technology (including social networks, microblogs, online reviews, and other platforms) to accomplish
CRM objectives. Social CRM has several benefits for customer acquisition, customer retention, and
relationship termination.
• Customer acquisition: Trimster can use social media to engage customers by running brand
promotions on platforms such as Facebook, YouTube, and Instagram. Customer actions and
involvement on these platforms can help these promotions find the desired target audience and change
attitudes among prospective customers.
• Customer retention:
The Case Solution Starts From page 6
, EXHIBIT -1: DIFFERENCES BETWEEN TRADITIONAL CRM AND SOCIAL CRM
Characteristics CRM Social CRM
Utilize a database of customer
information (which is accessible to all
Role of Use customer data to assign tasks to employees) to actively engage target
employees specific departments. customers.
Adopts a conversation-centric
approach where the strategy evolves
Follows a process-oriented strategy depending on customer social media
Strategy where the workflows are pre-defined. activity.
Management
mode
e
pl
m
Sa
n
tio
lu
So
The Case Solution Starts From page 6
, EXHIBIT -4: INCOME STATEMENT FOR TRIMSTER UNDER PREPAID-ONLY SCENARIO
Percentage Target
Remarks
of Sales (USD)
GMV 100% 1.75
Channel margin For Trimster, 37% of products were sold
through alliances at a 60% discount and 63
% of products were sold through the
44.25% 0.7744
company website at a 30% discount.
Therefore, 0.37 × 60 + 0.63 × 30 = 41% of
GMV.
RTO 4% 0.07 Includes only Prepaid RTO costs.
GST 7% 0.1225
Net sales
e
pl
m
Sa
n
tio
lu
So
The Case Solution Starts From page 6
