The past six months of lockdown have brought the best out of me on many different fronts. I started my blogging just when the lockdown began in April with short posts on my three interest areas of marketing, entrepreneurship and India.
Marketing: Customer retention and development needs a very different approach – while the temptation is to focus on all customers, brands must differentiate between them. The “best” customers provide disproportionate revenue and profits. Identifying who these best customers are must become a priority. This has become easier with the data trails that customers leave. Analysing transaction data to compute customer lifetime value (CLV) and thus identify the top 20% customers has to be the core of the martech strategy. The next question is: what to do with the best customers? This is where I brought in the idea of “Velvet Rope Marketing” (VRM). One could also term it as red carpet treatment or white glove handling. In all cases, the theme is the same: how to create a differentiated experience for the best customers? VRM combined with omni-channel personalisation is the future of marketing.
Entrepreneurship (Proficorn): There are two ways for companies to fund growth: they can raise external capital in the form of equity or debt, or they can generate cashflows and re-invest those in the business. I have focused on the second approach in both my ventures. One needs some initial capital – which comes from the founders (promoters). The aim is then to create a business model predicated on getting to profitability quickly and then continuously re-investing for growth. Without external investors, decision-making is faster and much more long-term. That’s where I coined the word – “Profi-corn”. It describes a company that is profitable, privately held, promoter-funded and also has a reasonable valuation (say, $100 million or more). Given that many founders have 10-20% left in billion dollar unicorns, the wealth creation can almost be equivalent for the founders. How does one go about ensuring profitability? Does being profitable mean sacrificing growth? What about gains for employees? What about the value addition that investors bring in along with the capital? What’s the right choice for founders?
India (Nayi Disha and Dhan Vapasi): While I failed [in 2018] to even make a dent, I think the ideas are even more important now. The temptation for India’s leaders will be to print a lot of money, give it to people and run huge deficits to try and save the economy. This will take us in the opposite direction to both freedom and prosperity. Instead, there is an alternate path – one which can truly transform our future. This involves combining public asset monetisation with returning the wealth generated to the people. This is perhaps the only approach that will create lasting prosperity in the shortest possible period for the maximum number of Indians.
These are the themes I have built upon in my writings over the past six months. Each of the ideas has become richer and deeper with the cycle of reading, thinking, discussing, learning and writing.
Tomorrow: Part 3