The Most Powerful Word in Ecommerce Marketing

The word “no” may be the most powerful marketing tool available to ecommerce owners and marketers. If used properly, the word “no” emphasizes planning, encourages making good choices, provides freedom and control, and recognizes that every ecommerce business great or small has limits.
In some cases, “no” will be applied to good ideas or good marketing tactics, but when that happens, it is at its best.

An Example of ‘No’ in Action

Consider the case of a multi-channel retailer in the northwestern United States. Back on October 21, this retailer began working on a promotional flyer that would be distributed to a quarter million potential customers just before the end of the Christmas shopping season in an effort to get shoppers to visit the company’s online and brick-and-mortar stores. The flyer had been through two proofs and was about three days away from final approval, when a new marketing opportunity popped up.
A vendor, whose products were already listed in the promotional flyer, released a new, and somewhat alluring offer. If a shopper purchased $150 worth of the vendor’s product, that shopper would receive a $25 online gift card to a popular entertainment site. The vendor knew about the merchant’s forthcoming flyer, and wanted this new offer to appear. The vendor even offered to pay co-op, meaning that it would cover a portion of the flyer’s production cost. But the merchant said, “No.”
However good the offer was, the merchant had not planned for it. There were questions about how the online gift card would be distributed. How customers would respond to the offer, and whether the offer was best suited to attract shoppers to the store, which was the promotional flyer’s goal, or encourage shoppers to spend more.

‘No’ Emphasizes Planning

Saying “no” to some marketing campaigns and tactics will help an online retailer emphasize marketing planning.
Good marketing begins with business goals that are specific, measurable, attainable, realistic, and time-bound. Next, a marketer will develop a series of actions or tactics intended to achieve those business goals. Once a complete marketing plan is in place, the word “no” should be deployed frequently to prevent changes to that plan and prevent refocusing efforts on something other than the underlying business goals.
In the case of the promotional flyer mentioned above, the business goal was to encourage shoppers to visit the retailer’s stores online and off. But the offer was focused on increasing the size of an individual order. While this is certainly a worthy goal for any Internet retailer, it was not the desired effect. Saying “no” showed that the merchant was emphasizing planning and goal setting.

‘No’ Encourages Choices

Applying the word “no” to a marketing campaign, advertising offer, or even a particular business goal enforces the idea that ecommerce marketers have choices. This may sound a little obvious, but in nearly any small or mid-sized company you can find examples of a marketing department doing things simply to please an owner, a vendor, or even a particular customer. In effect, that marketing department is doing things because somehow its marketers don’t feel like they have a choice.
In the promotional flyer example, a vendor told the retailer that it wanted its offer to appear in the flyer and even said it would pay a portion of the costs, but the merchant demonstrated that it still had choices. The merchant said “no.”

‘No’ Provides a Measure of Freedom

In 2011, communication coach, Carmine Gallo, wrote a great article in Forbes titled, “Steve Jobs: Get Rid of the Crappy Stuff.” In the article, Gallo described a conversation between Apple’s iconic founder, Steve Jobs, and Mark Parker, the chief executive officer at Nike.
“Do you have any advice?” Parker asked Jobs. “Well, just one thing,” said Jobs. “Nike makes some of the best products in the world. Products that you lust after. But you also make a lot of crap. Just get rid of the crappy stuff and focus on the good stuff.” Parker said Jobs paused and Parker filled the quiet with a chuckle. But Jobs didn’t laugh. He was serious. “He was absolutely right,” said Parker. “We had to edit.”
Think about this story along side of another bit of wisdom from Jobs.
“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying ‘no’ to 1,000 things.”
The point is that using “no” means that you have the freedom to say “yes” to those things that can truly improve your business.

‘No’ Recognizes that You Have Limits

If an Internet retailer has unlimited resources both in terms of time and money, there really would be no need to say “no” to one marketing tactic over another, but the final reason that “no” is so powerful in marketing is that it recognizes that every marketing department and every ecommerce business has limits.
Saying “no” to something is saying “yes” to a goal, campaign, or tactic that will better serve the business given a finite set of personnel and money.
Saying “no” emphasizes planning, encourages making good choices, provides freedom for innovation, and recognizes that every business has resource limits. Taken together these concepts make “no” one of the most powerful words in a marketer’s vocabulary.
TAGS: STRATEGY

Why Prism Payment’s acquisition is a significant step ahead for India’s nascent payments ecosystem?

Why Prism Payment’s acquisition is a significant step ahead for India’s nascent payments ecosystem?

– By Prathamesh Patil

Hitachi has recently announced that it has entered into share transfer agreements relating to all the issued equity shares of Prizm Payment Services Pvt Ltd. with all the company’s shareholders, including Winvest Holdings (India) Private Limited, Sequoia Capital, Axis Bank and other minority shareholders. Prizm Payment Services is a leading provider of payment services using ATMs and POS systems to banks and financial institutions in India.

Hitachi and Prizm Payment Services will target the end of February 2014 for a completion of the share transfer, in accordance with the terms of the agreements and subject to the regulatory approvals required to consummate the transaction.

Hitachi sees India as an important region in its global strategy and is stepping up development of the Hitachi Group’s Social Innovation Business in the country. Hitachi aims to grow revenues in India by nearly 3 times to 300.0 billion yen by the fiscal year ending March 31, 2016, compared with the year ended March 31, 2012. Furthermore, in the information & telecommunication systems business, a fulcrum of the Social Innovation Business, Hitachi has set forth the growth strategy of expanding global businesses and strengthening service businesses in order to create a business portfolio with growth potential.

In India, the IT market is expected to grow rapidly, with some forecasts calling for an IT investment growth rate exceeding 10% for 5 straight years from 2013 through 2017, driven by economic expansion. Meanwhile, financial institutions in the country are working to roll out various services, including mobile device-based payment services. In accordance with this, the number of ATMs and POS systems, which have a low penetration rate at present, is increasing. ATMs in particular are estimated to nearly triple in number in 4 years from around 100,000 in 2012. In India, non-financial-institution service providers are expanding ATM outsourcing business, providing banks and financial institutions with comprehensive services, extending from deploying the ATMs as its own assets, managing the cash-in-transit services, to managing, monitoring and maintaining ATM operations.

In May 2012, Hitachi acquired eBworx Berhad, a Malaysia-headquartered financial IT solutions company, which boasts an extensive track record in Internet and mobile banking systems, credit management systems and other systems, mainly for major banks in Malaysia and Singapore. As Hitachi eBworx Sdn. Bhd., this company is strengthening various IT businesses globally, including expanding the financial channel solutions business in ASEAN and China. Hitachi decided to acquire the major Indian payment service company Prizm Payment Services with the aim of accelerating global development of IT services businesses targeting financial institutions, including ATMs where it has the top share in the Japanese market.

By leveraging Prizm Payment Services’ robust customer base of major financial institutions, and know-how of payment systems, cash operations and management systems for financial institutions, and other expertise, Hitachi will step up development of IT services business in India and globally.

Both companies will utilize their respective business process integration skills to work toward a smooth process to maintain business momentum, retain personnel and continue the highest quality of customer support. The senior management team of Prizm Payment Services will remain intact and be integral to the success of Hitachi’s goals of this acquisition.

“Hitachi is extremely delighted to conclude the share transfer agreement on amicable terms to acquire Prizm Payment Services with the aim of accelerating the Hitachi Group’s development of the Social Innovation Business.” Mr. Hiroaki Nakanishi, President of Hitachi, Ltd. remarked “Hitachi is endeavoring to strengthen IT services businesses in the fast-growing Asian region in particular. Having Prizm Payment Services as Hitachi family, we believe that we can create new value together by wedding the company’s strong customer base and payment service and other know-how in India, with Hitachi’s IT expertise and strive to expand the Hitachi Group’s IT services business in India and globally.”

Loney Antony, Managing Director, Prizm Payment Service, said “By becoming a member of the Hitachi Group, we are excited to capture synergies from the combination of Prizm Payment Services’ robust customer base and know-how in India, and the Hitachi Group’s expertise in IT services for financial institutions built up in Japan and around the world as well as its advanced technological capabilities, including cash recycling ATMs. Being part of the larger Hitachi family provides a unique opportunity to expand our service offerings to customers not just in India but across the globe. Furthermore this deal provides the management team and employees tremendous potential for professional growth.”

Mohit Bhatnagar, Managing Director of Sequoia Capital, said “Sequoia Capital is delighted to have partnered with Prizm when it was just a dream in the eyes of its founders. Prizm’s stellar management team have executed on a unique business model to emerge as a leading payments company in India. We are excited to see Prizm move to the next phase of its journey along with a global leader like Hitachi. Prizm’s success will be an inspiration for the next wave of startups seeking to build large enduring companies.”

Banking & Infrastructure need Rs. 10.4 trillion bond funding : CRISIL

Banking & Infrastructure need Rs. 10.4 trillion bond funding : CRISIL

– By Prathamesh Patil

India’s infrastructure and banking sectors will require  Rs. 10.4 trillion from the bond market over the next 5 years, CRISIL said at its second annual bond market seminar held today.

To facilitate this, greater regulatory focus is required in three areas – deepening of the bond market, developing innovative credit-enhancement mechanisms for infrastructure projects, and building investor appetite for banks’ non-equity capital.

The Indian bond market has witnessed sizeable growth in issuances and increasing participation by issuers and investors. Encouragingly, there have been several innovations in the bond market during 2013, including the first 50-year rupee bond and the first inflation-indexed debentures by Indian companies, five Basel III compliant issues by banks, and the launch of two infrastructure debt funds.

It is imperative to build on this foundation of growth and innovation to meet the sizeable funding requirements of the country’s infrastructure and banking sectors. Says Roopa Kudva, Managing Director and CEO, CRISIL: “The  Rs. 10.4 trillion bond funding required for these two sectors translates to an average issuance of Rs.2.1 trillion annually in each of the next five years. This is nearly 60% higher than the average annual issuances made by these sectors in the last three years. This calls for steps to deepen the bond market by encouraging greater foreign participation, and by liberalising investment norms for long-term investors.”

The Indian infrastructure sector alone will need  Rs. 7 trillion from the bond market over the next five years. Currently, bond market finances the infrastructure sector indirectly through specialised institutions. Says Mr. Pawan Agrawal, Senior Director, CRISIL Ratings: “In 2012-13, just five financial institutions issued nearly 60% of the (Rs.1.3 trillion) bonds raised to fund infrastructure. Therefore, encouraging direct access of infrastructure projects to bond market is a key priority.” This can be achieved by a strong regulatory and policy focus on developing innovative credit-enhanced structures, allowing banks to provide credit enhancement and facilitating the scale-up of infrastructure debt funds (IDFs). CRISIL has recently rated the two IDFs set up as non-banking financial companies.

Indian banks also seek Rs.3.4 trillion non-equity capital under the Basel III regulations till March 2018. A good beginning is already visible, as five banks have raised  Rs. 60 billion by issuing Tier II bonds, all rated by CRISIL. Adds Mr. Agrawal, “The key challenge lies in raising Tier I non-equity instruments, due to their riskier features of coupon discretion and principal loss absorption at specified capital thresholds.” For building investor appetite for such instruments, guidelines for long-term investors will need to include eligibility for Tier I instruments.

A look at Experifun and Sudiksha’s niche funding from Pearson Affordable Learning Fund

A look at Experifun and Sudiksha’s niche funding from Pearson Affordable Learning Fund

– By Prathamesh Patil

A company operating low-income pre-schools, and a team who design next generation science learning aids have scooped a share of $150K investment. Experifun and Sudiksha Knowledge Solutions beat off competition from hundreds of education startups in India to take home seed funding in the inaugural ‘Edupreneurs’ programme, a partnership of Pearson and Village Capital.

Launched in July 2012 with $15 million of initial Pearson capital, Pearson Affordable Learning Fund (PALF) makes minority equity investments in for-profit companies to meet a burgeoning demand for affordable education services in Africa, Asia and Latin America. The purpose of the fund is to improve access to quality education for the poorest families in the world by investing in committed to innovative approaches and improving learning outcomes.

Led by a team of alumni from the IIT and the IIM A, Experifun helps science teachers bring their subject to life by providing them with kits and activities to conduct classroom experiments. Designed in its R&D lab in Bangalore, Experifun products are patentable, affordable and suited to both urban and rural schools.

Sudiksha operates pre-schools in underprivileged urban neighbourhoods, where there is often a shortfall of education provision. It does that through an innovative model that recruits local women to run branches under an incentivised profit sharing scheme, thus developing the skills of female adults alongside children.

The winners were selected not by an expert committee or a judging panel, but by a group of much tougher critics and stronger supporters – their peer group of 14 education-focused startups who made it to the final round of competition. All 14 fledging firms have spent the last few months with Pearson and Village Capital in a series of workshops and peer review sessions all around India, designed to ready them for investment, and ignite the pipeline of next generation education businesses. Culminating with a presentation by each finalist to an audience of potential investors.

Announcing the winners, Pearson’s executive director of the PALF, Katelyn Donnelly, commented:
“These inspiring entrepreneurs are excellent examples of the innovations desperately needed to improve access to, and quality of, education for low-income learners around the world.  Both Experifun and Sudiksha have established strong traction with customers and shown early promise to transform learning outcomes and scale quickly.

Village Capital has served over 350 ventures worldwide, building disruptive innovations in energy, environmental sustainability, agriculture, health, and education. Village Capital has launched 22 programs in 7 countries to-date and made 30 peer-selected investments.

CarDekho owner Girnar Software raises $15 million in Series A funding from Sequoia

CarDekho owner Girnar Software raises $15 million in Series A funding from Sequoia

– By Prathamesh Patil

Jaipur based Girnar Software Pvt. Ltd. which owns cardekho.com – the automotive marketplace has raised $15 million in funding from Sequoia Capital. Sequoia’s Shailesh Lakhani will be joining the board of the company.

The funds will be utilized to fuel cardekho.com’s expansion plans.

The company has plans to launch an array of dealer focussed tools and services based out of mobile platform. Consumers can also expect an enhanced mobile app experience which will not only allow them to instantly click photos and list their used cars, but also enable them to connect with new and used dealers and read reviews on the go.

Newer offerings from Girnar Software  include Bikedekho.com (a similar portal for bikes), mobiledekho (a mobile information portal) and Pricedekho.com (a price comparison site for gadgets).

Apart from offering consumers with an online platform to list their used cars on a freemium model, Cardekho.com offers a variety of research tools, expert reviews, user reviews, on road prices in all cities along with pictures and list of dealers. It also offers an end-to-end solution by facilitating car finance and insurance options to its consumers.

CarDekho.com has gathered critical business momentum through its strategic partnerships with leading OEMs and accounts for 10% of national sales for them. CarDekho currently works with over 2000 new and used car dealers including leading organized retail used car dealers like Mahindra First Choice and Carnation.

“Cardekho is focused on creating an experience for consumers buying a new or used car and super-focused on creating business value to dealers across India. To make it an end-to-end solution, we also facilitate car finance and insurance. In this e-commerce era, where most start-ups are losing money, we are one of the few who are able to run real business which generates profits.” quoted Amit Jain & Anurag Jain – Joint Managing Directors of Girnar Software.

Shailesh Lakhani said, “India is one of the largest car markets in the world, and the purchase of a car is amongst the most considered decisions for a consumer.  As most consumers begin their search for a new or used car online, Amit and Anurag have built the ideal product to help them research, compare, and begin a purchase transaction.  We are delighted to partner with them to scale their business to new heights.”

Emerging market focused investment bank Elara Capital was the sole financial advisor to the transaction

India’s recent internet IPO success Justdial is also planning to launch a price discovery engine.