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WF: What prompted you to brand your firm "The Financial Mall"?
Neeraj Chauhan: We started in 1992, with a clear focus on providing multiple products and solutions under one roof - including mutual funds, insurance, deposits etc. That was the time the idea of a mall had begun in India - where you would get all kinds of products under a single roof. So we thought of the name "The Financial Mall" to signify a variety of financial products and solutions all under one roof. It appealed to our customers, they related to the concept and therefore we registered the name and built on that.
WF: Your media profile has been an important marketing strategy that has contributed to business growth. How did you go about creating your media profile?
Neeraj Chauhan: Actually, I didn't start out with an intention to create a media profile. Initially, a couple of media people contacted me for my views on some issues. They found my sound bytes interesting and relevant for their audience. This led to more interactions over time, and more sound bytes. All I did was to ensure that I give sensible and balanced views on topics that were raised. From there, I gradually started getting requests from TV channels to participate in their shows. This helped considerably raise my media profile and then I started getting regular requests from TV channels. I think the main aspect that helped build this media profile is that they found my views sensible and relatable to their audience. Media comes back to you only when they think you relate to their audience well. They come to you only if they think you have credibility and competence to talk on the subject.
WF: In what ways has your media profile helped boost business? Has it brought you many more leads that you were able to convert into clients?
Neeraj Chauhan: Actually, its not leads in the form of mails and queries that actually boosted business. Yes, we got a lot of queries and mails, and we tried to respond to almost all of them. But the real benefit came from the positive impression on our clients. When they started seeing me on TV shows, they started referring us very freely. Whether it is a sign of higher confidence, or a validation that they have picked a sound advisor - whatever was the trigger, we found referrals coming in a lot easier. These referred prospects were also more favourably inclined - not only did they get a referral, but they were also able to watch TV shows and see that our views were making sense. This certainly helped convert referrals into clients a lot quicker.
The other benefit of the media profile was that we were able to move into the mass-affluent customer segment. When we started, it was a pure retail business. But, as the media profile grew, and we started getting many referrals, we were able to graduate from pure retail to mass affluent clients - middle and senior management corporate executives. Our approach towards financial planning and sensible logic behind investment recommendations appealed to senior corporate executives, as it jelled with their thinking and approach.
Today, we serve some 800 clients and have an AuM of around Rs. 60 crores. A lot of this has come in the last 3 years, since our media profile started increasing.
WF: What is the downside of cultivating a media profile?
Neeraj Chauhan: One is that you get a huge amount of queries and mails, people want your opinion on many matters, and you can't handle all of this. The challenge is that you really don't know who is asking you these queries, whether he or she fits your target client profile. If you are not geared to take on all types of clients, if you are a little selective of who you want to work with, you have a big challenge in responding to all these queries, not knowing what it will mean to your business, and perhaps knowing that it is taking away time from actually serving your existing clients.
The other aspect I found occasionally is that some of our initial retail clients started getting a little circumspect about talking to me - perhaps they felt that this guy is coming on TV now, he won't have time for me. It takes a lot more effort from our side to maintain the relationship and assure clients that we will always be there for them.
WF: The other big initiative you have consistently focusing on is education. What are the kind of education initiatives that you conduct? Do you see education as purely CSR or is there a marketing strategy element in this for you?
Neeraj Chauhan: As you know, in our country, awareness of basic financial concepts is still very low among most investors. The concept of real returns is not known to many investors. That makes them make inappropriate investment decisions. A lot of insurance policies are sold only because of lack of awareness of this basic concept. People prefer FDs only because they haven't been educated about real returns and inflation-proofing their savings.
When it comes to goals, you ask most retail investors and they will tell you that saving for children's education is their biggest priority. Now, most people don't have so much resources that they can save up comfortably for all their financial goals. Very often, it boils down to prioritizing. When we tell them that for education, there are loans available but for retirement, nobody is going to give you a loan, they understand how to prioritize in a sensible manner.
Then we tell them to understand the difference between needs and wants and therefore plan their spending and saving more judiciously, to enable them to fulfil more of their long term goals.
We talk about benefits of compounding, we discuss what really wealth creation is all about and how to think long term.
When we discuss all these issues, two things are very clear. One is that for most people, these are eye-openers, as they have not really been educated about these personal finance concepts. Second, when they find somebody who is willing to guide them in the right direction, there is very little resistance in shedding old habits of deciding investments based on past returns, of having a short term approach, of having an unplanned approach. Its not as if people don't want a sensible plan - its just that they have not been approached to help them build one for themselves.
So, from that point of view, our education initiatives are clearly CSR for us. It is our way of giving back to society. I make it a point to conduct at least 2 such seminars every month. I do these seminars at Rotary Clubs, Lions Clubs, corporate offices. I do these sessions for 20 people, 50 people, 100 people. I don't sell anything, I don't push any products - I just build awareness of sensible ways to save and invest. We are invited to do these sessions only because we talk sense and we don't push any product.
To your question about a marketing angle - yes, clearly there is a benefit for my firm. Any activity where we engage with investors and leave a good impression, helps build our brand. These things always add up, you eventually get business. But you shouldn't approach an education session with a target of how many clients you want to sign up. But at the same time, you know that so long as what you are telling makes sense and adds value to people who are in your target client segment, it is a good marketing strategy for your firm.
All content in Marketing Wiz is created by Wealth Forum and should not be construed as views of Kotak MF.
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Marketing Wiz: Advisor Insights