My PR Experiment

Yesterday was an interesting day. I started off by tasting different blends of single shot coffee made by a start-up that we have been eyeing for a while now. They have been some gaining significant traction and the tasting culminated in the issuance of a term-sheet. In my next appointment, I visited several branches of a food aggregator that provides home cooked meals in an IoT enabled device. The heavy dose of caffeine from the morning helped me stay awake after an extraordinarily heavy lunch, but I really liked what the company was doing, and so we issued them a term-sheet too. In the last meeting of the day, I was with two entrepreneurs who are looking to fill the niche left open by Bira in the beer industry, and so I ended up tasting their different beers. Their product, taste, packaging and brand positioning are all unique and I’ll be honest, we are contemplating issuing them a term-sheet too. But no, this blog isn’t about tasting and issuing term-sheets, it’s about the commonality I observed in all three funding outlays, which I asked the founders to rectify i.e. instead of outsourcing it to an external agency, build an in-house marketing team to manage social media channels, PR and internal-external communication.

I used to erroneously advocate outsourcing PR and media management, but that viewpoint was permanently altered. I conducted a yearlong experiment in which I discontinued the services of our external PR agency and brought those functions in-house. Not only did I gain more control on what Artha (and I) wanted to communicate, but we also got more media mentions, got covered by the top journalists and were invited to renowned events around the globe. We also started publishing separate monthly and quarterly newsletters for our LPs and well-wishers.  All this effort has paid off through a marked increase in business for all the Artha entities, but most importantly, we achieved all these objective at 60% off our previous costs.

All of our PR (yes, all of it) was organic and genuine i.e. unpaid for. We did not sponsor events, pay for advertising in publications or authored articles. Things are moving so well that this year we are expanding the internal team by bringing in a Social Media Head that can move us from prose to video. Since we understand that the entire process isn’t a one-man job, we are allocating him/her a budget to recruit a team to facilitate this transition.

This massive cost saving got me questioning the PR/Media management agency model and whether it really works for an early-stage startup. I am afraid it does not. It takes many months and a lot of effort to get a brand new startup relevant and unpaid media attention. Unfortunately, early stage start-ups do not have the budget to compensate top-level agencies for their effort or even tier 2 or tier 3 players (unless they can secure a strong referral). Therefore, start-ups end up working with PR firms that themselves are starting up.  These PR firms overload their staff with multiple projects, to make ends meet, distributing the employee cost over the projects to make operations profitable. However, that divided cost also means divided time and focus on each project – a situation that does not bode well for start-ups trying to make a dollar for every penny invested in marketing. In fact, I have seen PR agents pitch 4-5 ideas to the same journalist in a single bid hoping to get any of them published. Is that really how you want your start-up to be pitched?

Another issue that works against the interest of the start-up is when a PR agency works hard to meet the KPIs they have promised and manages to do so in the first 15 days of the month. Having met their KPIs, they go radio silent for the rest of the month. This essentially means that their promised KPIs are the limit and not the base on which the agency works – completely opposite to how founders set KPIs for their internal team. After all, you can only create value for your company when you get more value than you pay for, isn’t it?

Therefore, I have come to a conclusion that PR agencies are useful for short sprints or Big Bang announcements, but the marathon work of building an image and brand for your startup should be done by an in-house team. In fact, even the 22 Immutable Laws of Marketing recommends the same!

37/2019

Jet Airways' JetPrivilege: A lesson in how your loyalty program can chop off your brands feet and then shoot it in the groin for good effect

I am sitting at the Starbucks in Mumbai airport muttering unmentionable obscenities at Jet Airways for making yet another change to its loyalty program which devalues my membership and its JPmiles. They have now decided to keep their top-tier members out of the airlines lounges unless they purchase a certain class of ticket! So much for being loyal to your customers.. just shove it up their behind in the name of profiteering!
I am so incensed at the continued decimation of my loyalty rewards account at Jet Airways that instead of working on my fund presentation, I am motivated to write a post panning Jet Airways and using them as my subject for a learning lesson for startups.
Honestly, I am at a loss on what Jet is doing with its loyalty program and whether they understand that loyal customers (like yours truly) are getting increasingly disillusioned with the airline and are choosing to fly other carriers. In a situation of an apples to apples comparison on ticket price Jet Airways is losing out to the low-cost carriers (LCAs) as their premium services, that should allow them some leeway in pricing power, are just mediocre services with which the airline is hoodwinking itself and not its customers. The situation in which a full service carrier like Jet Airways is unable to command a price higher than that of the LCA is a death knell for them. Effectively what it states is that the value of the frills (mediocre class premium services)  and the brand behind has zero value in the eyes of the customer. In fact on net revenue per mile of flight after the deduction of the cost of the frills, Jet Airways has a lower revenue per mile flown. 
Jet Airways started the slow journey to decimating its brand loyalty by making it difficult to redeem the JPmiles, putting an imaginary limit on how many tickets can be redeemed per flight (especially on long haul international flights). Internally they have branded these redemption tickets as non-revenue tickets, so that their computer system ensures that there are just 1-2 seats available for redemption in their business class section and a handful tickets available in the economy class section. To protect their behinds, the Jet Privilege customer service team will flat-out lie to you about the business class section being full when in fact they are selling tickets for customer willing to pay – a brand that teaches its employees to lie is a brand rubbing its own nose in the dirt.
It should be an eye-opener for Jet’s staff and customers that a listed company calls award tickets as non-revenue tickets but that is against the IAS principles as it clearly states that

An entity shall apply paragraph 13 of Ind AS 18 and account for award credits as a separately identifiable component of the sales transaction(s) in which they are granted (the ‘initial sale’). The fair value of the consideration received or receivable in respect of the initial sale shall be allocated between the award credits and the other components of the sale.

So it is very likely (and I hope likely) that Jet Airways is in fact recording the each mile that it is awarding their customers as revenue, however, the airline is just befuddling its customers by calling them non-revenue tickets. Then to use this false premise to impose artificial and ad-hoc methods to prevent its loyal customers from utilizing their miles that they have earned by patronizing, the airline should be punishable with a public flogging of the genius that came up with this idiotic idea.
If Jet Airways (and Etihad’s) think tank had an economist advising them, he/she would tell them that the perceived benefits of a strong Jet Privilege program made a customer choose Jet when they were on the fringe of choosing between Jet and another carrier. In fact there should be enough data that a strong Jet Privilege program would have enticed customers to choose Jet even if Jet was 5-10% dearer than its competition – that was the super-normal profit that a leader like Jet would have commanded.
Alas Jet continues to operate with a dinosaur dated mentality in which, brands feel that they can screw over customers because with a population of a billion plus and few airline operators a customer wouldn’t have many other options but to choose Jet. However, that scenario is changing rapidly and dynamically with Vistara, Air Asia and a number of regional players carving out a piece of the skies for themselves and Jet Airways will see rapid erosion in its market share by alienating its customers.
Jet can learn a lesson from Amazon, specifically from what Amazon learnt after the 1999 meltdown. New customers are very expensive to attract and true profit comes from attracting a previously acquired customer to visit and transact with your brand multiple times. In venture capital speak, the cost of customer acquisition (CAC) has to be exceeded by the lifetime value (LTV) of that customer – so always, and I repeat always, find way to keep your customer coming back to you for more!
Jet Airway’s share of Indian skies stands at a lowly 17% beating the universally panned Air India by a whisker and is in danger of falling below the recently bankrupt SpiceJet. Even in terms of filling up its air-planes Jet Airways has an abysmally low PLF of 77% in comparison to Indigo’s 91%. All these point to death spiral that is consuming Jet Airways.
I can offer a starting point – look at the appalling treatment of its loyal customers and you will find correlation that has seen previously a top airline in India own a paltry 17% market share of the skies and will soon see the previously bankrupt SpiceJet overtake them – the signs are ominous that Jet Airways is in an identity crisis and is going to have to do something drastic to make up for what it is losing each day – loyal customers.
When Jet  rebranded themselves as a full service airline they took on a responsibility of providing frills like meals, reward points, business class seats, etc that would make the decision to choose Jet over an Indigo and maybe even pay a slight premium to compensate for the frills – the strategy was to take the fight away from price and into services. That would have created value for the Jet Airways brand.
However Jet Airways completely messed up the execution. They continue to behave with a low-cost carrier (LCA) mindset, slowing eroding the value of the frills that they promised to give to the point that today, Jet Airways is chosen only when they compete with the low-cost carriers (LCAs) on the pricing front, even though, it is a premium service. All those frills are perceived by the customer as having zero value – how does this create value for its shareholders is beyond my level of reasoning!
To further add insult to injury  Jet’s frequent tinkering of the loyalty program is alienating those customers that chose Jet over anyone else. By devaluing the JPmiles and putting ring fences around its redemption they are making it easier to choose other carriers faster, timely and infinitely more comfortable airlines.
I used to shun offers from all other airlines because the Jet Privilege program made me feel like a VIP and I loved the lounge access, instant upgrades to business class and the last-minute no charge cancellation policies which allowed my family and me to book our flights almost exclusively with Jet Airways.The JPmiles were influencing our buying decision and allowed Jet Airways to make up for the old planes and later than on-time arrivals at my destination. However, as the value of its JPmiles and the utilization of the miles eroded, that liberal allowance we gave them started to erode as well.
First, my father stopped booking with Jet unless they were cheaper than Indigo or Spice, because he knew that the miles were not going to be utilized without haggling with the Jet Privilege staff. That precious time lost in getting the brand to give what it promised and to make its loyal customer feel like a beggar completely demolished all signs of brand loyalty with my frequently travelling father and Jet also converted a promoter of its brand into a detractor – well done indeed!
Next, he stopped all the credit card point conversions to Jet leading to further loss in revenue that Jet got from his point conversions. What is detrimental for Jet is that due to their treatment of its loyal customer he gave another airline a shot at taking his business and once that happens it is like allowing your spouse to flirt with others, you can never be sure if they will come back. If they end up falling in love with someone else, you could have also lost a precious relationship for life.
So now he loves the LCAs loving their on-time performance and the cleaner, quieter and faster aircraft deployed by them. I can safely say that this is a loyal customer that Jet has lost for life – unless they offer cheaper nominal fare than a LCA. So, a full service carrier is now perceived as an equal (or inferior) to a discount carrier  – this has to be outrageous for the bigwigs at Jet/Etihad (or is it?)!
Of late I too have flown Indigo & SpiceJet in the last couple of months. I am starting to wean myself off the Jet Privilege kool aid and the shock today will wean me off even faster!
Jet’s loss is, however, a learning opportunity for startups and companies that are running or are going to run loyalty programs. If you have influenced the purchasing decision of a customer by parading the benefits of your loyalty program then make sure you deliver on the promises that were made at the time of giving the points. The loyalty points so awarded are an unwritten contract between your brand and its customer and by delivering on your unwritten promise you create an aura of trust with the customer which is infectious and magnetic – it keeps the customer coming back for more and increases your brand value.
Even other brands that co-brand with successful loyal programmes should pay very close attention to the ease of redemption and the value of the points that were awarded at a 3rd party brand for a buy decision made at your brand. Any erosion in value of the points that were awarded has reduced the value of the discount you have provided your customer and they will take note and they wont forget – so be vigilant Citibank, American Express, etc – Jet is playing with your brand’s image as well.
So be very careful about making changes to your loyalty program and if the change does not increase value for the points or miles that were gained by your customer then err on the side of caution and do not make that change. I cannot stress this point strongly enough that when you break the unwritten contract you have demolished the aura of trust and trust once lost is almost impossible to gain.
Just take a look at the frustration that a tax payer has had when the previous government made retroactive adjustments to tax laws which nullified all the planning that was done for making business transactions. There was an unwritten contract and trust that a financial year is complete, there wont be any changes made that would hurt a person retroactively since there was no way for a person today to make right (something from the past) what is being considered wrong today (unless we discover time travel). Now just take a look at the effort the new government has had to make to ensure investors that those days are long gone – but the feelings of mistrust continues and will most likely continue since that aura of trust once broken makes all promises empty and all assurances seem to be cover-ups, all in a single swipe.
However, if you as a brand have to make any changes to your program that even makes a 5% devaluation of the reward points that were previously awarded to a customer, make it up to your customer by giving them 10% additional points to make up for the loss… give them 20% extra reward points! Then sincerely apologise for the erosion and ensure that your compensation is not enough, but it is a token of your appreciation for the patronage.
Don’t go the Jet Airways route of touting how awesome lesser rewards are for the loyal and how amazing it will be to be out there with a begging bowl to get some value of the useless JPmiles – rubbing salt in the wounds of the trust placed in your brand will make your loyal customer shun you for treating them as idiots.
I doubt the people at Jet will care for an email from a decade long loyal customer but I am certain that Jet no longer figures on the top of my list of airlines.. RIP Jet Airways.

Rebuilding Brand India

We owe a lot to the Indians, who taught us how to count, without which no worthwhile
scientific discovery could have been made. ~ Albert Einstein
 
India is the cradle of the human race, the birthplace of human speech, the mother of history, the
grandmother of legend, and the great grandmother of tradition. Our most valuable and most constructive materials in the history of man are treasured up in India only.
~  Mark Twain
If there is one place on the face of earth where all the dreams of living men have found a home from the very earliest days when man began the dream of existence, it is India.
~ French scholar Romain Rolland 
India conquered and dominated China culturally for 20 centuries without ever having to send a single soldier across her border.
~  Hu Shih, former Ambassador of China to USA 
 
Many of the advances in the sciences that we consider today to have been made in Europe were in fact made in India centuries ago.
~ Grant Duff (British Historian of India)
 
India was the motherland of our race and Sanskrit the mother of Europe’s languages. India was
the mother of our philosophy, of much of our mathematics, of the ideals embodied in Christianity… of self-government and democracy. In many ways, Mother India is the mother of us all.
~  Will Durant (American Historian 1885-1981)
 
 
These are but a few of the praises that have been said about the soil you and I sit on today. The CIA ranks India as the 4th largest economy in the world in terms of Purchasing Power Parity. Since it counts EU as the 2nd largest it actually puts India at 3rd when we go toe-to-toe as a country. Just recently Business Insider ranked India as the 4th in the most powerful militaries in the world.
 
Yes, this soil of India where an army of 35 lakh individuals, a relatively new constitution,a fiercely independent judiciary and a government elected by the largest democratic population in the world leads and protects the 2nd largest population in the world comprising of: 
  • 2nd largest followers of Islam
  • Largest followers of Hinduism
  • 10th largest followers of Buddhism
  • 2.4 crore Christians
  • 2.1 crore Sikhs
Brand India is over 3000 years old and we have held the world in awe with the deep diversity displayed in our culture, economics, ecology and religion. We don’t have to rebuild a brand that has given the world Yoga, the Gita, Sanskrit, Chanakyaneeti, the Shunya, the path of non-violence, the power of civil disobedience and what was in Mohenjadro – the oldest and globally trading civilization known to mankind.
 
India truly is the “land of opportunity”,  where a deep history is evolving through the eyes and efforts of a young population in a democracy that with all its aches and pain is still respected around the world for what it has achieved.
This is the very country that according to a recent Bloomberg article grew at 6.8%annually for the past 20 years. The same country where until 2007 we had a Christian lady leading the largest elected political party, a Sikh prime minister leading the country who were both answerable to a Muslim President that the country loved unconditionally. They were all presiding over a population that is 75-80% Hindu – which my friends is the strength of the fabric of Brand India.
The sons and daughters of this very soil have gone to lead some of the largest and most popular brands around the world. Their companies and in fact even their start-ups compete,out think, and out-innovate the sharpest minds in the world. You can walk into almost any developed country in the Western hemisphere and there is an awe in the eyes of the foreigner how well Indians perform when they have a platform.
It isn’t a hidden fact that Indians as a community are the highest per capita income earners in the US, UK,… we beat them in their own backyard!
 
So what happens to the Indians that stay in India ? How is it that almost of 5 trillion dollar economy in terms of PPP has such a low share of the global trade and an even lower image of the “Made i
n India” brand?
 
In my opinion the rebuilding of India has to start with you and me… It is us, we Indians and the makers of the “Made in India” brand that will have to make the change we want to see.Our chalta hai attitude which is a silent acceptance of shoddy service, low quality and fleecing of money from the system is the cause of where we stand today.
Our apathy towards the plight we collectively share is truly staggering. Our collective acceptance of an onerous bureaucracy has given us the dishonour of being in almost the bottom quadrant in the ease of doing business rankings released by the World Bank and International Finance Corporation in 2014.
The budding and upcoming entrepreneurs in this room would be shocked to know that in our own land we require 70 odd clearances to start a business, we have to file over 100 returns in a year and follow a maze of 50+ labour laws – most of which were made when your grandparents were born… some that were made when their grandparents were born.
 
This system is broken and it is breaking the back of Indian entrepreneurs. We accept it as a part of our culture but is that what was envisioned by the forefathers of our constitution that the fight they lead to give us freedom and self-governance has come back to drown the voice and expectations of a young India. We have gone from the land of a billion opportunities to a hole of a trillion “offo”-rtunities.
 
Offo-rtunity… how apt that word is for our predicament today. But does it need to stay that way? Can we change?
What brought me back to India after over a decade abroad is the fact that India has grown at tremendous rate for over two decades by a people that are so shackled by its system – a system created during the Nehruvian scarcity & socialist economics of the 1950’s through the late 1960’s that the growth itself is awe-inspiring.
So I imagined, what would happen if those shackles were removed? We would be unbeatable! The very Indians that cannot eke out a living in their own land go on to do tremendous work outside the country. If we offer them that system here, we can literally change the world within and outside our borders!
The fight to unshackle us is not going to be easy but nothing that comes easy is worth anything anyways. This fight requires you and everyone you can influence to change their very attitude towards mediocrity. it isn’t acceptable and cannot be acceptable in any form whether it comes from the government or the private sector.
 
If we want to provide world-class service to the world then that service has to first be given to us, isn’t it? If we want to make the “Made in India” brand the brand that signifies quality and trust… then shouldn’t we be the first adopters of that brand and work out the kinks before the world sees them? Why should our best commodities, products and services only be built for exports? Who will test them and ensure that they can stand toe to toe with global brands?
 
It is an observed practice followed by our successful Asian neighbours where the established companies nurture the younger companies and work with them to make them globally competitive. The people in those countries take the products and services made by their companies very seriously and refuse to accept sub-standard products – that is how their economies have produced innovative yet stable product lines.
So let’s copy that attitude and apply it to our companies. The next time you receive shoddy service or a DOA product, make it a point to protect your rights and ensure that the company not only rectifies the error, it makes it a policy to ensure that those errors aren’t repeated. If you don’t get the protection of your rights go to the consumer protection forums through online mediums which get you almost instant results.
 
Do the same when it comes to services provided by the government. The people that live in high offices react when din reaches unbearable levels. If only a few of us make that effort to change the country by changing ourselves, by accepting Jugaad innovation but being a jugaadu customer, we can eradicate the malaise of mediocrity that plagues our India.
So as I have said this in not so many words during this speech. The rebuilding of the brand of India isn’t going to happen without rebuilding the attitude of the Indian. When we take mediocrity or merely “good enough” as our standard of expectation we get into a downward spiral that has embedded its roots deep into foundation of our proud country. The generation before us has taken us this far and they have given us the baton to take this country forward.
 
Therefore before we rebuild brand India… let’s rebuild ourselves first.