‘Go after customers who can potentially give you more profits’
In this edition of ‘Beating All Odds’, Vivek Bhargava, CEO, DAN Performance Group, speaks to exchange4media Editor Naziya Alvi Rahman
In our 'Beating All Odds' series, we honour leaders, who despite all challenges and odds thrown at us by COVID-19 are ensuring that our businesses and economies stay healthy, or remain as little affected as possible.
Today, we speak to Vivek Bhargava, CEO, DAN Performance Group, Dentsu Aegis Network.
What is the most essential digital strategy that brands should adopt in these times of crisis?
The biggest thing brands need to adopt is to take their marketing strengths and rank it based on the ROI they receive. So instead of saying they will cut all marketing or all advertising, they should see which are the platforms and mediums that are giving them ROI. Especially with digital being an auction medium, with less people participating in an auction, you get a pricing which is superior. Let's suppose you acquire an HNI (high networth individual) customer for a travel vertical or for a financial vertical, the cost of acquisition of that customer would have been very high. Because it would go way beyond the lead price the brand can afford, so you could not actually target them. But now, because of less people being there in the auction, you can actually target those people who were earlier not affordable for you, but you can acquire them today and when things turn around and recover these customers will give you a significant amount of revenue and profit in the long run. So, I think if your media spends are going down, go after customers who can potentially give you more profits.
Start at zero budgeting, look at all the marketing and advertising spends and see what kind of customers are you looking to acquire and who would give you the maximum profits. If you can transition this strategy, I think you can benefit from this crisis because the best thing about digital is it being an auction medium and lesser amount of people in the auction, you can get a lot more benefits than any other medium.
These are also very unique times because the consumption is very high. But we have also seen a significant drop in ad spends because there is no production, so considering this what do you think can brands do at this time?
One of the things that needs to be done is work on the internal strategy. This is more of a question of a business strategy – there is a lockdown phase, there is a recovery phase and there is a growth phase. There are a lot of important tasks that we as brand managers need to do, which is basically as you call it Stephen Covey's Quadrant II activities – they are important but they are not urgent. Whether it's building a great CRM strategy, or having a content platform which you need to start investing in, or finding out who your best customers are. Peter Fader has said 20% of your customer will give you 200% of your profits. The book called 'Velvet Rope' tells us about the kinds of customers you should get into your brand. These kinds of strategies can only happen during these times of crisis. In 2008, almost 70-80% of our revenues came from Banking, Financial and Insurance clients and when that industry was hit by recession, it gave us time to come back and chart out what the new agency should be like.
So we started focussing on retainer businesses, consulting businesses, finding out what kind of content and platforms should we build for brands, and transition and communicate that into what iProspect is today.
The late Professor Clayton Christensen, in his book, speaks about disruptive strategy. He says there is a job to be done and people hire your product or service to do that job. If you can match what your product does to the job perfectly, then you will actually replace the current product or service they use.
For example, today a lot of agencies work on the acquisition part of media, but we don't work enough on making sure that we acquire the most profitable customers. Similarly, even the marketing department focuses on customer acquisition and they don't focus enough on making their existing customers more profitable and acquire those kinds of customers. So this is one of the areas we are working on, to help brands acquire more profitable customers and for this you require partnerships etc., in the CRM space but that's what we are going to do.
I think this is an opportunity to think of important things to be done, how you're preparing your company as a brand or an agency for the next 10 years. Then when you look at your 10-year perspective, these 6 months to 1 year which may be challenging would suddenly not matter that much.
You have many clients in the eCommerce sector. With online deliveries hit badly, what kind of plans are you making for them right now?
At this time I don't think too many plans can be made. I'm a sucker for learning random things. So one of the things I learnt was how do you drive a racing car, and one of the interesting things they taught is that when you come to a curve you brake hard, and while you are on a curve, you accelerate. The acceleration gives you control and speed on the curve. If you see a lot of brands today, COVID-19 has actually given them that break. When the recovery happens, those who can bounce back faster and have things like data, CRM strategy, media strategy etc., sorted out can start accelerating on that curve. And I think they are the ones who will actually recover faster. Just imagine, you are No. 2 in a space and because everybody has braked everybody has become equal. Otherwise, it would've been impossible to catch up with them. In a way almost all the brands would become equal and they will all start off again. So you suddenly have an opportunity to be equal to someone who had built up this unattainable lead.
What initiatives have you taken to motivate your employees during this time?
I think one great thing about Dentsu is the environment that we have for our team members is phenomenal. Seventy per cent of entrepreneurs even after selling their companies stay back and I am myself an example of this. We always have this long-term view of our team members. We put in a lot of effort into learning and training. We have an iProspect Masterclass which is an initiative of iProspect. I think the tools that we have are working beautifully, so we've always had this work from home work culture at some level.
In the townhall meeting we had, Rubeena said, “Because we are at home and we are available, it doesn't mean managers should be giving tasks on weekends.” And I think that was a really sweet thing to say, because now there is no real concept of a weekend, so having that empathy as a leader and making sure we are all together in this is important. Luckily, the DAN network has been much more positive about the future and what we're doing for our team members and I'm very proud to be working with Dentsu.
Which sectors do you think will be most affected and will take longer to recover?
I don't think this is the type of crisis from which any industry will singularly benefit from, apart from maybe gaming or a few others. I think the long-term impact will be on consumption. When you have less money for consumption, then all industries will be affected. There will be some industries which will be affected in the short-term, such as the hospitality and travel industries and to an extent, the auto industry. But in the long run, I think many industries will be affected by this crisis. A lot of millionaires and Gen Z were spending on experiences and savings were not the criteria or a critical component of their lives, but this situation will create some kind of behavioural shift and the consumption will reduce a bit. There are, of course, optimistic people, and sometimes these things allow us to bounce back faster.
With changing consumption patterns during this lockdown, do you think people will become more digitally evolved coming out of it?
I think they will be. As they say it takes about 21 days to form a habit, so once you form the habit, you don't go back. I think digital really came into India between 2008 and 2009 because what happened was, brands didn't have enough money to spend on Television and Print. And when they got their money back, they didn't go back to Television and Print in the same way, they started spending money on digital. It's the same way people are realising now that digital can allow you to work from home. In this next 5-10 years I can almost guarantee that if we had an average of 100 sqft per employee, you'll end up having 50 sqft per employee, because some of the people will be working from home, so automatically there will be less requirement of commercial space. There will be a long-term behavioural change in that. I have invested in a company called Empowerji, which teaches elderly people how to use technology. And it has seen a huge spike in usage because now there are a lot of elderly people stuck at home and they have to learn to use WhatsApp, or Skype, or order online. Once they start using technology and they can, for example, see their grandchildren on a video call, they will want to continue using that technology. I think technology is a great enabler in having a fulfilling life and in a way this will force some of the elderly people to use technology, but if you take a 10 or 20 year perspective, they will be glad they learnt because they would have had 10-15 years of a fulfilling life compared to not having learnt about technology.
How have you evolved as an individual or a professional during this lockdown period? What are the things you never thought you would do, but you are doing now?
I had this very clear philosophy in life that happiness is a 'muscle', you needed to work on every day and that happiness brings success. These days have proved to me that this philosophy absolutely works. Because I've never been happier, I am as happy as I was earlier. I'm doing everything as a discipline as I did earlier, working on the 'muscle' every day. And I thought this would affect me, but I'm still smiling, still laughing. I'm actually giving a talk this Sunday on 'Happiness is a Muscle'. I think the way to lead life is towards discipline, not goals. So instead of setting goals to lose weight etc, have the discipline to do something every day, either eat right, or exercise etc. When you set these disciplines you will automatically achieve your goals. Happiness has to be worked on every day, whether it's true meditation, generosity etc. Having said this, I never thought I'd spend 10 hours a day doing video calls, or taking an online course from Harvard. Productivity wise, I never thought I'd be so productive. We were doing a pitch and 20 of our CEOs came together and had brainstorming sessions. I even had a sales pitch at 9.30 at night.
Are pitches still going on?
Yes, everything is continuing. If you want to get the best guys from DAN into a room, it would be physically impossible. But now with a video call, you can access a fair a lot of talent, so for groups like us which are large and have amazing talent in different locations, this lockdown is beneficial to us to demonstrate our capability. So I feel in this way of pitching, we are putting our better foot forward for our partners and giving them a better solution than we were giving on a normal day. So I think this is benefitting us, our pitches are more collaborative, they are superior in terms of the talent coming on board and more superior than they would have been otherwise because I think we have more of the attention span of the senior management going into the pitch.For more updates, be socially connected with us on
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