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| Interview with Wunderman
India chief executive officer Rajat Sethi |
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"The
fault for the shortage of good creative talent lies with the
advertising industry"
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| Posted
on 10 March 2004 |
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Wunderman
India chief executive officer Rajat Sethi is frank enough to admit
that the direct marketing communications has a long way to go before
it realises its potential. Shortage of trained resource and talent
pool, and lack of fair understanding of DM's potential are some
of the challenges which the industry faces today. His own testimony,
'has been there, done that'.
But
Sethi is unfazed by all this. In fact, he and his team have gone
from strength to strength over last 14 months or so. In his short
stint with the Y&R Worldwide Group company, which Sethi joined
early last year, Wunderman has not only consolidated relationship
with existing clients but it has also added new ones in its portfolio.
Apart
from adding two senior professionals in strategic planning and CRM,
Wunderman is also working on developing a new tool called the 'Brand
Experience Scorecard' which essentially measures customer equity
on 'satisfaction' and 'involvement'. Wunderman is also investing
in setting up a relationship management centre in Mumbai.
Sethi,
who was nominated as a jury member from Asia for the Lions direct
at Cannes last year, spoke to indiantelevision.com's
Ritesh
Gupta on
Wunderman's operations and the status of DM in the country.
Excerpts:
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How would you assess the performance of Wunderman India in the recent
past?
Any measure of success in a business needs to be viewed on two parameters:
business growth and financial performance, and developing our core
competencies. In both, we have had a spectacular success. In the
past year, we have grown our business exponentially and are today
one of the largest direct marketing agencies in India.
Last
year not only did we consolidate and grow with our existing clients
such as Citibank, Ford, Taj, ICICI Prudential, Exide and DHL...
but we also had a great new business record winning substantial
projects from Airtel, Oracle, Castrol, British Council and WNS (business
process outsourcing company).
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Apart from strengthening of relationship with client and new
acquisition, what else has been area of focus?
As regards our contribution to the growth of our craft and competencies,
our focus has been primarily on strengthening two key aspects of
our business, namely, data analytics and creative excellence.
In
the area of data analytics, we have strengthened our own internal
competencies and are now even examining the possibilities of outsourcing
analytical work from here to our global network. A key recognition
of Wunderman's leadership position in this region also came in my
being nominated as a jury member from Asia for the Lions direct
at Cannes last year. All in all, we have had a great year and this
year we can only grow from strength to strength.
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Is
there any major change in management restructuring or expansion
of operations in Wunderman?
Yes, we have invested in talent in two key areas. Firstly, we have
appointed a new Strategic Planning Head - T R Ramanunjam and secondly,
we have taken on a senior resource as head of our CRM practice -
Niranjan Jayaram.
Also,
in response to our clients needs, we are also investing in setting
up a relationship management centre in Mumbai. This will be a stand-alone
center with data management, telephony, on-line integration and
high volume fulfillment capabilities.
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How
do you think direct marketing as a tool has evolved in the country
in recent context?
Direct
marketing has taken an evolutionary path from direct selling and
direct mail to today's technology-enabled Relationship Management.
To
quote our guru, Lester Wunderman, "If the objective of previous
and present generations was to create new customers, ours will increasingly
be to manage and maximize their lifetime value. The four R's of
our time will be relevance, relationship, repurchase and retention.
Those will be the key words and concepts of the new world of advertising
that we are already busily exploring and attempting to master...
the theory of focusing on the customer is one thing, but the practice
will be another."
Today our business is media-neutral. Our focus is on driving customer
acquisition, retention and value enhancement through data driven,
relevant dialogues across all channels and touch-points.
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"I
believe, clients' perceptions are changing. They have an increasing
respect for practices which are directly measurable in terms
of results and which are more cost effective, with minimum
spill-over "
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What
are the major challenges still faced by a DM agency? How has client
perception changed?
I believe there are three key challenges, that we collectively face
and need to overcome. First, how do we build our business value.
That is, how do we move up the value chain in the clients mind,
so that we can be remunerated fairly. Some DM agencies are just
happy to do direct mail work or list brokerage and that is damaging
to our perception and credibility as an industry.
Secondly,
we constantly face a shortage of good talent base. As an industry
we need to invest in developing a trained resource and talent pool.
Often agencies land up hiring advertising people. More often than
not, these people aren't joining DM for the love of the business,
but more as the last resort option. As a result, the passion and
drive is often missing in these youngsters. We definitely need to
invest in human resource development.
And
finally, one challenge we face constantly, is more internal than
external. It's the challenge of integration within the agency group.
Often, the advertising agency does not mind integration, as long
as they are the integrators. However, integration is a top management
role and has to be driven by the head of the agency group.
I
do believe, clients' perceptions are changing. They have an increasing
respect for practices which are directly measurable (as DM is!)
in terms of results and which are more cost effective, with minimum
spill-over (as DM is!).
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Which
product categories have witnessed increased in usage of DM as a
tool? Can you cite examples of the likes of telecom and retail sector?
It does not really matter which industry; it is more life cycle
related. For a growing and emerging company, DM is used more for
acquisition. In a highly competitive industry, DM is used more for
retention and building customer satisfaction. However, having said
that, there are some industries which are emerging as large spenders
in direct communication, such as Telecom, Airlines, Hotels, Automotive,
IT, Banking, Insurance and Retail.
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How
has Wunderman strengthened its operations vis-à-vis new emerging
opportunities in the market? Could you share some information on
the tools used by Wunderman?
Very clearly, our business is to build customer equity and customer
equity can only be built if we can -
1. Identify and segment our customers.
2. Measure how they rate their 'experience' with the brand.
We have proprietary tools to aid us in both these tasks. For customer
segmentation, we deploy a tool called the Wunderman 3D model, which
essentially helps to segment customers basis three key parameters,
namely, commitment, desired behaviour and depth of involvement.
For
measuring Brand Experience, we are developing a new tool called
the 'Brand Experience Scorecard' which essentially measures customer
equity on 'satisfaction' and 'involvement'. For more effective strategic
planning, we use a well proven global process called the 'Nine cell
matrix' based on insight, imagination and impact.
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How
do you think industry is shaping in terms of mushrooming of talent?
Like I said before, there is a dire shortage of well trained DM
professionals and the onus lies on us to help build this talent
base. And the process can only start by first building knowledge
amongst the youngsters of the career opportunities that our industry
will provide going into the future. We need to disseminate more
information on our industry at Management and Communication Institutes
and then help in developing a relevant curriculum to build DM competency.
And the need is not just for capable managers, but also for creative
talent as well as for data management and analytics professionals.
A
lot of the fault for shortage of good creative talent lies with
the advertising industry. In India, for example, there are hardly
any DM categories in any of the major advertising awards. Now, with
Cannes having a separate Direct Marketing category for it's awards,
creative people can now aspire to winning in DM at a global forum.
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What's your personal view of market scenario? What is the expected
from the future?
I am very bullish about the future of our business. However, I believe
there will be some key drivers and catalysts that will ignite growth.
I think following factors will impact the immediate future:
1.
Direct Response TV - An unexplored media in India but given the
reach of TV it's time will come very soon.
2. Web-Telephony Integration - Mobile phones will increasingly become
a medium of not only direct communication, but also of dialogue
and transaction.
3. As direct communication becomes the medium of choice for many
industries, DM agencies will also increasingly become stand-alone
companies (as in the case of media houses), rather than a co-dependent
relationship with the mainline agency as it exists today.
4. More marketers will invest in customer data management as 'retention'
becomes a critical need in high-churn industries. Excessive focus
on customer acquisition will give way to intensive focus on customer
retention!
5. Finally, as channels proliferate, Channel Relationship Management
will increasingly become more important. In fact, we are witnessing
this phenomenon already as more and more of our clients are relying
on us to develop strong channel equity in addition to developing
customer equity.
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