In a vastly populated nation like India, nearly each individual becomes a potential customer for financial products. The challenge, however, is to devise a business model that taps into this potential. And that is what Noida-based financial services distributor, NetAmbit InfoSource & e-Services Pvt. Ltd. (NetAmbit), has managed to achieve – its distribution model based on a “non-affinity” pattern, where the marketer has no prior knowledge of the prospective customer’s purchase preference, has taken it to the top of its league. Girish Batra, NetAmbit’s founder-chief-executive officer, explains, “Our direct marketing model is an extremely unique model of customer acquisition which works on a combination of high quality lead generation using outbound call centres followed by face-to-face customer meetings undertaken by frontline sales teams.” Put simply, NetAmbit has cracked the code of selling financial products via cold calls. It comes as a surprise to many that NetAmbit is way ahead of its competition given that its business model, product portfolio and target audience are not unique. What NetAmbit does differently is to keep costs at an absolute minimum and focus on growing the volume of its business. In fact, its call centres operate in a rudimentary fashion where every operator has a telephone and stacks of printouts with telephone numbers on them. No automated dialers, no digital records, just the basics that ensure that NetAmbit’s resulting margins are high.
In addition to the success of the distribution model, the variety of financial products offered by NetAmbit is a significant edge it has over banks and individual agents. Unlike competition, the company is not tied down to a specific brand and this has been an attraction for consumers. Also, the company’s consumer-friendly attitude has helped its penetration in tier-II and tier-III locations which account for close to 76 per cent of its sales. “Our customer service helpline is open to customers to help clarify their doubts six days a week from 9 a.m. to 5: 30 p.m. We also provide reminder services to the customers to pay their premiums on time and also collect the premium payments to be deposited from the customers,” says Batra.
Founder: Girish Batra
Investors: Bessemer Venture Partners, Helion Venture Partners
Revenue: For year ended March 2011: Rs. 100 crore
USP: One-stop shop for financial products
However, Batra did not have this all figured out at the start – the company was established in 2000 and sold business leads to dotcoms before the dotcom bust thwarted his plans. By mid-2001, Batra got into telecom distribution, but he felt that the business was not scalable. “It was at that point of time that penetration and distribution of financial products such as life insurance, auto insurance, health insurance, loans, credit cards and mortgages was very low. Also from a consumer’s perspective there were no intermediaries who could provide a brand-agnostic choice of financial products. Hence, the idea of creating a one-stop source for consumers to buy any financial product was born,” he says. Today, NetAmbit has over 150 offices in India, including centralised call-centres in Noida, New Delhi, Mumbai, Bengaluru and Chennai and has 4,000 individuals on its rolls. The numbers too, tell a story of growth. For the year ending March 2011, NetAmbit grossed revenues of about Rs. 100 crore, an increase of Rs. 10 crore from the last fiscal, and Batra hopes that the next fiscal will see it cross Rs. 160 crore.
People and the process
Upfront, Batra talks about human resources management as a primary challenge – “For us the biggest challenge is to get the right people. This business is based on trust and integrity and getting the people who will come good on these two basic tenets is a challenge.” Right from the start, Batra has spent a lot of personal hours meeting people and making them see the vision of NetAmbit the way he did. With time, when people started to come to him, a training methodology was introduced to ensure that quality did not suffer. “All new joinees at the telemarketing level undergo 14 day classroom training. This training is a mix of soft skills and product training. In the classroom, we teach people basics of insurance, products, product pitching and objection handling. They also undergo a seven day on-the-job training, making calls and generating leads before they hit the telecalling floor, so any areas of deficiency can be worked upon,” says Batra. The structured training programme ensures that prospective customers are not angst-ridden about the calls they receive. “We follow set guidelines for telecalling and have processes whereby any numbers which are registered on the national ‘Do Not Call’ registry are not called,” he adds.
“Our direct marketing model is an extremely unique model of customer acquisition which works on a combination of high quality lead generation using outbound call centres followed by face-to-face customer meetings undertaken by frontline sales teams”
In an industry where attrition is a major concern, NetAmbit has addressed the issue by ensuring that its people grow within the system. Batra says, “We have several sales people who having joined at the junior most level and are now heading large sales teams and regions.”
One other challenge that NetAmbit faces is reducing its dependency on the ULIP (unit linked insurance plan), which along with pension plans accounts form about 80 per cent of its sales. The ULIP is tied in to market-driven assets and a large percentage of consumers remain unaware that they bear the investment risk. However, Batra clarifies that NetAmbit has always tried to maintain a healthy mix between ULIP, term and endowment as part of its product portfolio and encourages sales across the gamut. “We started selling general insurance from January 2010 as it was a natural progression for us and we have added more products like home loans and personal loans after our recent acquisition of the personal finance website, Rupeetalk.com,” he adds. NetAmbit acquired Seedfund-backed Rupeetalk.com last November.
Finding money, however, came relatively easy to Batra and the company. “I started this company with a capital of Rs. 1 lakh and that is the only money me or my other co-founders (who joined me later) put into the company. The company grew on internal accruals till 2007 when we raised our series A funding of Rs. 15 crore from Bessemer Venture Partners (BVP),” he says. Series B funding came in 2009, when NetAmbit raised Rs. 55 crore from Helion Venture Partners and BVP. The most recent round of funding was in 2011 where the existing investors pumped in another Rs. 40 crore into the company while Silicon Valley Bank subsidiary, SVB India Finance, lent it Rs. 15 crore as venture debt. The latest round was a means to maintain a healthy debt-equity ratio mentions Batra while adding that the money has been spent on organic and inorganic growth, namely growing the sales team and making the right acquisition. In addition, Batra says, “We do not see any need to raise more funds in the near future, however, it could change if there was an acquisition opportunity which fits into our business model.”
Batra has his targets for the future set firm. “We want to keep on expanding geographically to cover most of the important tier-II, tier-III and tier-IV towns in the country. We want to be present in 500 cities by 2013-14. By then, hopefully, we should be a 10,000 people organisation serving close to 8 lakh Indian families for their financial products needs,” he shares. Importantly, if things go according to plan, he sees fiscal 2013-14 as the right time for a public listing. This ties in well with the larger aim for Batra who in his own words, wants to see NetAmbit become the ‘Walmart’ of the financial services distribution space.
Girish Batra’s grand targets for the future
No. of cities to be present in by 2013-14
No. of people in the company
No. of families to be serviced
Geographically to be present in
tier-II, tier-III and tier-IV towns