Monday, February 16, 2009

"We do not Mis-sell"

Unfortunately the state of affairs are so bad in India that one can actually brand oneself as "We do not mis-sell". Mis-selling generally happens in apparently complex products where there are too many ifs and buts, too many clauses. But in India we have breached all boundaries in terms of mis-selling even simple products. Just because all others are doing it is no excuse for you doing it. As long as sense does not prevail in these companies, an opportunity presents itself of just doing business cleanly and using it for branding.

Financial products come to the fore when you think of mis-selling. Its very easy to conceal information and dupe the investor of the real risks when all they are interested in is saving tax and get infeasible returns. To some extent the consumers themselves are also responsible for their plight. But then consumers have limited time and limited knowledge to see through the products deliberately worded to promote mis-selling.

It is a known fact that there is little room for differentiation in such financial products with most of the companies selling the same thing with different names. What you can sell to them is that "peace of mind". Remember the Pure for Sure branding by BP. Of course everyone is expected to sell pure petrol (not adulterated) but since no one is doing it (and which is a shame), it gives you the opportunity to just do the right thing. People who really care about not being cheated and do not have the zeal and time to understand complex clauses of your products will come to you. For this you do not need to do anything out of the box, just play fair. Isn't it simple. Ya I understand that you might not get that all important high market share to start with, but what you are trading it off with, is Customer's trust which is of immense value in the long run. The sale of such products is highly dependent on recommendations and not on outlandish names because frankly no one understands their meaning. As a informed investor you are expected to do due diligence for all the things you are investing in including insurance, markets, bonds etc. but won't it be great if some one sells us the satisfaction that we will not be cheated if we deal here. Its like the Pre-paid taxi counter.

Of course what drives companies to do it is the sheer number of India's population. Right now there are so many of us that they do not bother about repeat business. If we mis-sell to one person, we will get another two. But the simple fact is retaining a customer is 4 times cheaper than acquiring a new one. Are there basics in place?

By branding like this you are also sending out a subtle message to your target market that your competitors might be mis-selling to you. So if you want not to be made a fool of come to us. No one wants to be duped and you might just become the easy choice.

Some times I wonder why is it so difficult to remain honest and earn money in this country. I just hope this kind of branding is not sustainable in the future. But right now I see no reason why this should not work.

P.S: I tried collating some data on mis-selling in India but could not get any reliable and consolidated information. If anyone has please share the same.


US said...

Any opinion on i-Hot's new campaign - hot water as a service! Our land-lord got this installed the system last week. (installation if free!)

System is compact, installation was complete within 4 hours. Works like charm.

Company - Anu Solar Power Pvt Ltd.
Campaign - i-Hot
It's a high-stakes, aggressive and big marketing campaign. Everywhere you look, there is i-Hot. Their key idea is hot water on rent and pay by the litre. Definitely not a case in mis-selling but such aggression on solar-hot-water is odd and unforeseen (at least in the 3.5 years+ I've been in Bangalore.).

Yuvraj Singh said...

This seems rather audacious. I believe they are looking for scale very quickly as that is how they will get decent margins and market share.

Is this a shared system or stand alone system installed in every house?

One hurdle I can see is how will they differentiate themselves from a normal solar service provider.

Also people who understand TCO will probably not go for this one.