Founder & CEO | 17 Nov 2004
We are trying to ascertain exactly where all the marketing money is going, and if it is being used in the right manner. Most marketers see mainstream advertising as the be-all and end-all of branding. The maximum work that‘s done on brands qualifies as above-the-line advertising. The way most people think about marketing is you go to an ad agency, get a great creative, do some great advertising and that’s about it. But the argument remains that advertising is not the only solution to all branding problems. Alternate solutions are available and solutions differ from product to product and from brand to brand.
Ganesh Mandalam, 35, is the founder and Chief Executive of Xerago, a pioneer in digital customer management solutions. Mandalam started his professional career as an advertising executive in Ogilvy & Mather. After quickly rising to become Account Director, he left O&M, and in 1997, with an entrepreneurial instinct, he started 3rd Agenda, a web development and e-commerce solutions company. He ran it successfully for over five years before selling it to SSI. By that time, he had also set up BridgeOverTW as an Internet marketing advisory group, with investments from ICICI Ventures.
In December 2002, he brought in Xerago with a pioneering mission, intellectual property, people and assets of the previous companies. In less than one and half years, Xerago has built up a client roster that includes heavyweights like Citibank, HDFC Bank, Hindustan Lever among a host of others.
In conversation with Anushree Madan Mohan of exchange4media, Mandalam speaks about Customer Relationship Management, new-age tools for effective branding and customer management solutions, and about the modus operandi of Xerago. Excerpts:
Q. Can you give a brief background of Xerago?
Xerago means ‘Second Coming’. It originated as part of a restructuring strategy of two companies – BridgeOverTW and 3rd Agenda. Now, 3rd Agenda was incorporated in 1997 as a web development and e-commerce solutions company that was later taken over by SSI. BridgeOverTW was an offshoot of 3rd Agenda and was incorporated in 2000 as an internet marketing advisory with strategic investments from ICICI Ventures. In December 2002, in tune with the changing business environment as well as interests shown by various stakeholders, Xerago was formed with a renewed mission and a revamped line of business. Inheriting people, intellectual property and other assets from the erstwhile companies, Xerago in the last one and a half years has built its client base with big ticket companies like Citibank, HDFC Bank, ICICI Bank, Hindustan Lever, Birla Sun Life Insurance and TouchTel.
Q. As a brand consultancy unit, what kind of solutions does Xerago offer?
Xerago offers its solutions in the form of three business models. The first is product license, wherein the client organisation makes a one-time purchase of the full product and implements it in their premises. Xerago offers standard training, implementation and support services. The second is managed service, wherein the client organisation does not make any capital expenditure. Instead, the operations are outsourced to Xerago which sets up the delivery teams that use the technology as required. The compensation is structured along a monthly retainer-cum-expenses model. The third is the on-demand hosted services for specific one-off assignments, where clients can use our on-demand hosted applications.
Q. What all are you doing in the sphere of customer acquisition?
Our main line of business is called Customer Acquisition. There are two main service offerings. One is the Alternate Channel Management (ACM) wherein, by using alternate channels (internet, e-mail, SMS, telephones, events), we plan and implement new customer acquisition strategies. ACM solutions are available in all the different business models mentioned earlier. Some of the technology products available include AltServe – an in-house developed ad server, AltScore – a real-time online creative optimiser, Trigger – an e-mail marketing automation tool, Elvis – a lead verification, validation and risk scoring tool, and AltMedia – a digital media planning and optimisation tool.
Q. Can you explain the entire process of customer acquisition with an example?
Okay, let’s assume Xerago's client is Big Bank's Credit Card. In today's time Big Bank’s Credit Card has a special division focused on Internet sales and also has a VP–Internet Acquisitions to manage all this. The complete process for internet acquisition can be outsourced to Xerago. The first step will involve Xerago deciding on the online advertising campaign for the prospective Internet buyer. Once the campaign and promo are finalised, it will begin serving up a customised ad to a popular site, which attracts prospective credit card customers. These ads will not be the same for everyone. Depending on the nature of the product variant, customer response and other data that they are able to get, the ad will be revised and different ads will be served to different customers based on predictive ad serving. The content of the ad and the website it is served to will differ depending on a host of variables. Hence, the customer will ultimately choose which ad is served and not the agency or the client, which is most often the scenario in regular advertising campaigns. The 'waste' in advertising is thus reduced tremendously.
Once the customer clicks on the ad, he will be taken to a 'landing page’, which may typically have a form for the prospect to fill. This page will also be served up keeping various factors in mind. Xerago's development of technology products based on 'persuasion architecture' will help influence the customer to keep clicking till he buys the product.
Assuming Xerago manages the whole process for Big Bank, it will get remunerated for the services as well as a commission from the sales. Xerago's capabilities also extend to managing cross-promotions and other areas of CRM once the customer is acquired.
Currently, Xerago is in the process of building a host of world-class proprietary models and technology tools to fulfil various requirements of this process. Financial services organisation can either license these tools or purchase managed services from Xerago.
Most banks are increasingly attempting to acquire customers online and are putting strategies in place for the same.
Q. Tell us more about CRM and online channel management?
The website can be one of the most effective sources of new customers. Online Channel Management offers a managed solution where Xerago treats the client’s website as a sales channel, creating and running a full-time business operation. This is knowledge and best practices oriented service. Our focus is on ‘usability’ – making user interfaces more user friendly, Persuasion Architecture – taking information architecture to the next level, persuading visitors to perform desired action, Media Integration – integration of content across various media – web, PDA, WAP, etc. Both these are legacy practices from BridgeOverTW and 3rd Agenda.
Customer Relationship Management is a huge domain. With a vision to build expertise and presence in every aspect of CRM, currently Xerago has in place a mix of in-house developed and partner developed solutions. We have products for different solutions like a) Customer Intelligence: data modelling tools to mine and analyse customer data for insights into business strategy and operations; b) Campaign Management: a complete automated direct marketing campaign system where the client can automate many of the different chores required in the campaign origination and implementation process; c) Sales Force Automation: a fully customisable sales force automation solution for organisations with large pan-country sales teams; and d) Collateral Management: a workflow management system that enables organisations to manage their marketing collateral inventory. All products are available in any of the three business models mentioned earlier.
Q. How is Xerago a marketing consultancy with a difference?
We are trying to ascertain exactly where all the marketing money is going, and if it is being used in the right manner. Most marketers see mainstream advertising as the be-all and end-all of branding. The maximum work that‘s done on brands qualifies as above-the-line advertising. The way most people think about marketing is you go to an ad agency, get a great creative, do some great advertising and that’s about it. But the argument remains that advertising is not the only solution to all branding problems. Alternate solutions are available and solutions differ from product to product and from brand to brand. One-to-one marketing is what we deal with. We don’t do direct marketing, except as a part of some larger conglomerate. But whatever solutions we provide, we give full ROI and it’s shown in terms of figures.
Q. What are the main issues that marketers face today?
Typically, what most brands don’t realise is that ‘I don’t really need to get into the market and take on aggressive advertising in order to get greater value’. Greater value can be fetched from existing customers than going in for new customers and all of this can be achieved through alternate avenues. If my existing customers are capable of enjoying the product, new customers will come in. But again, this is not a logic that is applicable for all brands across various categories as solutions differ from brand to brand and from product to product.
The main problem with any marketing or advertising effort is the inability to display ROI. Ad spends versus sales ratio has never quite been resolved. An instance that comes to mind is the whole P&G nexus, where the FMCG major says that I will only pay my agency on account of incremental sales as all existing sales are occurring because of my existing reputation in the market. Which means the main issue is whether advertising is accountable. And, once this issue is resolved, it will lead to better relations between clients and agencies.
Q. Is Xerago aiming at exploring non-traditional solutions to branding problems?
Let me be clear about this. I have nothing against mainstream advertising or print and television as media vehicles. These are great mediums of getting your message across. But typically, these can’t be the only solutions for your brand. Every brand has certain requirements of its own and we cater to requirements. Again, new mediums like Internet or SMS marketing have a lot to offer. A brand’s success in the marketplace is not just dependant on how many spots it buys within a popular soap or purely on the basis of a superlative creative. There is a lot more that goes as part of branding or marketing solutions.