When sales stagnates though you have a superior product that adds value to customers, what can the marketing team do to change the situation? Firstly find the answers to questions such as what was preventing the customers from at least trying out a brand that promised superior performance? Who made the purchase decision and how? Were there gate-keepers in this purchase decision and who were they?
Secondly, devise a marketing plan based on your assessment. If you want to change the mindset of the customer, change the mindset of his influencer. Find out what would make him change his mindset?
So, when you have a superior product that adds value to customers, your marketing team is pushing hard to sell it, and customers seem to accept the product. Yet sales stagnate. What do you do? This was the tricky problem facing Amara Raja Batteries Limited (ARBL). This is what they did to accelerate sales.
Amara Raja Batteries Limited, is the second largest battery manufacturing company in the India. We introduced our Hiway brand of batteries in 2001. We had carved out a significant market share through innovative methods and an unconventional approach. For example, we were the first to introduce branded battery outlets known as Amaron Pit Stops and also the first to market batteries through non traditional battery marketing channels.
Hiway batteries were meant for heavy-duty commercial vehicles and were technologically superior to the existing offerings in the market. The initial acceptance for the product was good and all the major truck manufacturers soon accepted Hiway. Having found acceptance in the original equipment market, OEM, we then turned our attention to users of the trucks, namely the fleet owners.
the market segment
The fleet owner segment in India is highly scattered. It is estimated that there are roughly 800,000 roadworthy trucks and these are owned by a large number of fleet owners spread across the length and width of India. Besides the challenge of communicating with them in multiple languages, the size of the fleet also varies tremendously from small single truck owners to mammoth corporations with more than 1000 trucks offering a wide range of services.
the initial approach
First we approached the fleet owners through the conventional marketing route. Our marketing executives approached the fleet owners and presented the battery and its advantages over the existing offerings. While the truck owners welcomed the marketing executives and listened to their presentations, the conversion rate was extremely low and sales in the after market (the replacement market) were stagnating.
As we probed the reasons for this apparently contradictory behavior of the market segment, the first outline of a possible explanation emerged: That the fleet owners were reluctant to change their choice of battery brands. And as a result, no matter how convincing a case the marketing team presented, the owners were not willing to shift.
Further, on one hand, the market was dominated by the market leader and on the other hand, numerous local players were offering similar batteries at unbeatable prices. The situation seemed almost hopeless. As we considered and evaluated the available options, we singled out customer relationship management, CRM, as a possible route and so SurfGold a CRM and loyalty marketing solutions provider was co-opted into the new initiative.
market assessment
As we pondered over the reasons for this low acceptance in the after market, we realized that there were several questions for which answers had to be found before thinking of strategy development. Why was the after market not accepting the Hiway brand?, What was preventing the fleet owner from at least trying out a brand that promised superior performance?, Who made the purchase decision and how?, Were there gate-keepers in this purchase decision and who were they?, Why was the channel, which was otherwise successful in selling ARBL brands feeling inadequate in this case?
The team consisting executives from ARBL and SurfGold-then devised a plan of action that consisted three broad categories: market familiarization, strategy development and test marketing, and national rollout.
the market speaks
As a part of the market familiarization exercise, the SurfGold team spread out into four different towns consisting a mix of metros and non-metros, contacting fleet owners, channel partners and automobile electricians. More than 100 interviews were conducted in a span of four weeks. Having completed the interviews, the teams returned to the drawing table to analyze the data for key insights and observable patterns. The survey revealed some interesting insights that we had not taken into consideration earlier.
01 battery purchase is important. but why fix it if it aint broke? In market after market, the fleet owners were saying virtually the same thing. Yes, battery is a critical component of the truck, but the current battery brand was per-forming well and they had not experienced any problems with their current brand choice, so why experiment with a new brand especially when it was more expensive to buy?
As the team dug deeper into the information, it became clear that while battery purchase was important, it was less important compared to the engine, the transmission, the suspension and the starter motor. In short it was accorded the lowest priority in the scheme of things and so the fleet owner's level of involvement was really low. The team knew from past experience that wherever, the product category receives low priority, the customer would base his purchase decision on the basis of 'risk minimization'. So it became obvious as to why the fleet owners were not willing to 'fix a problem that was not broken yet'
The problem now became not how to get an audience with the fleet owner, but 'how to make a customer reassess his brand choice in a low priority product'. Unless this was done, it was clear that Hiway was not going to get into the consideration set of the fleet owner, through a plain sales pitch. As the team kept searching for clues on how to build relationships with these customers who were scattered across the country, the answer popped up from a statement that the fleet owners were making repeatedly about their own business requirements.
02 what keeps me awake? Downtime: during the course of interviews the fleet owners repeatedly mentioned their worst nightmare: a truck breaking down in the middle of a trip. Every minute of downtime cost the fleet owner in terms of penalties, business and opportunity losses and most importantly it put a question mark on his reliability. And the fleet owners were asking– in multiple languages with varying intensities, but with singular passion– if there was a way, someone could help them reduce their downtime.
Armed with this insight, the team restated the question as: how can we help the fleet owner reduce or contain the downtime on his fleet?' We developed a downtime map and went to work analyzing the different possible causes and the possible remedies.
After eliminating several factors that could lead to truck downtime, the team closed in on downtime caused due to electrical failures. Here, at long last, seemed to be an area where the customers need and the product's benefit seemed to be aligning themselves. And thus was born the service called 'Hiway Free Auto Electrical Audit'. This audit focused on reducing fleet downtime caused due to auto electrical failure.
It consisted of a thorough audit of the entire auto electrical system of a truck. The truck was audited when it returned to the base between trips and the check up was conducted by a trained auto electrician under the guidance of a direct marketing executive. A detailed report covering the various sub-assemblies and their condition was submitted to the fleet owner within two weeks from the date of the audit exercise.
03 brand choice? The auto electrician holds the key: the team also discovered from the market that the 'risk minimization' approach adopted by the fleet owner placed the onus of brand choice on the auto electrician. Thus while the fleet owner rarely changed his brand of batteries, he relied heavily on the advice of his trusted auto electrician, whenever the need for battery purchase arose. So the second piece of the puzzle fell into place: if you want to change the mindset of the fleet owner, change the mindset of the influencer.
The team now turned its attention to the second stakeholder in the drama. What role did the auto electrician play in the choice of brand in a battery purchase and what would make him change his mindset? We discovered that, much like the end user, the auto electrician too, was operating from a paradigm of risk minimization. After all his reputation was on the block, and if a new recommendation led to poorer performance, his livelihood was at stake. So, he was sticking to the 'tried and tested' brand options. Added to this was the fact that he did not have sufficient information on the Hiway brand of batteries.
04 influencing the influencer: collaboration is the key the team realized that unless the auto electrician was educated and convinced about Hiway, the battle for marketshare would be lost. So, we wove an influencer relationship program into the overall relationship program. The auto electricians were invited to a one day seminar on 'Trends in auto electrical systems'. Those who attended the seminar were given certificates and also offered an option to conduct the audits. They were also given some tools like multimeters, which would help them, carry out their work more productively.
05 finally results! customer centricity pays: we now organized the field level execution and the program was test marketed in one region for three months. The response from both the stakeholders was so overwhelming that the CRM team decided to roll out the program on a national basis.
The Hiway Relationship Program has now been running for more than fifteen months and more than 25,000 trucks have been audited. More than 3,000 fleet owners have been enrolled into the program and the results - both qualitatively and quantitatively - have been far beyond expectations!
The sales of Hiway batteries have shown a three-fold increase and the impact the program has had on the fleet owners has been tremendous. Far from viewing ARBL as just another battery company wanting to sell its products, the fleet owners now look at ARBL as a partner who shares their concerns; someone who wants to build lasting relationship with them.
The influencers see ARBL as an organization trying to help them stay abreast of the latest developments in their fields. Someone who not only tells them what is new, but also helps them do their work better. And the channel partners? They are laughing all the way to the bank.
home truths
The program drove home some simple truths about marketing in general and customer relationship management in particular. As the team that developed and implemented this exercise, we at ARBL and SurfGold believe that the lessons here are:
01 know your customer and address his concerns
02 do not fit a solution around your product, see how your product can fit into an appropriate solution
03 be willing to stretch that extra mile! (even if it means auditing the trucks at 2.00 am on a highway 80 kms from the nearest town!!)
04 involve the stakeholders and address their concerns
05 show a genuine concern for your customer and he will pay you back amply in time
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