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Seeking the Right Numbers
Girish Batra built NetAmbit into India’s largest distributor of financial services products. Now, he is aspiring for Wal-Mart's scale.
By Pooja Kothari
Photograph by Nitish Sharma
Girish Batra is the classic dot com kid, except that he didn’t batten down the hatches on the business. Instead he let his entrepreneurial ingenuity kick in, and helped midwife the birth of a new selling model in the financial services products space.
Not a wonder that Batra is now mastering the art of dreaming big. He knows that NetAmbit, the largest distributor of financial services products in the country, has the potential to become as big a success story as Wal-Mart—albeit in its own field. A one-stop shop that can meet every conceivable need that a household can have for a financial service product (FSP), be it a home loan, or insurance, or even a credit card.
“A Wal-Mart is much bigger than the brands it sells. We have the potential to be that in the financial services space,” says the 38-year-old founder. He’s convinced that the manufacturers of FSPs—think ICICI, HDFC, SBI and so on—will have to depend on third-party distributors like him to acquire customers outside the Indian metros.
And he’s betting his organisation’s future on that conviction.
His plans might sound boastful, foolhardy even—since no one else has attempted this combination of retail and financial services before—but it would be a mistake to dismiss them completely. After all, Batra is today one of the most successful distributors of financial services products in this country.
Last year, NetAmbit earned fresh premium worth Rs 200 crore for its clients. This fiscal, it has touched Rs 170 crore in premium in the first six months alone. The company’s income comes from the commissions on this premium.
Batra’s gunning to close this year at Rs 180 crore in turnover. That’s more than 25 times growth since 2007, when revenue was Rs 7 crore. What’s more, NetAmbit managed to grow more than 100 per cent year-after-year even as the world struggled to deal with the economic turmoil of 2008-09.
Today, it has a 4,000-strong team with a presence in 140 cities. “We hope to be 7,000 by March next year,” says Batra, clearly indicating an insatiable appetite for growth.
The 20-somethings that crowd NetAmbit’s six call centres around the country call up nearly 8 million people every month, selling primarily, life insurance policies, and now, in keeping with its newly-acquired ambitions, mutual funds, and health insurance policies.
They have made it possible for NetAmbit to acquire customers at the rate of nearly “8,000 a month”. Now, it’s looking to leverage those relationships through product and channel diversification.
“The idea is to sell other products to the same consumer, so that it brings down the cost of acquisition to zero, and improves profitability,” says Vishal Gupta, a managing director at Bessemer Venture Partners and a member of NetAmbit’s board. Bessemer invested in the company in 2007 and then again earlier this year.
From outside, this seems like a logical progression for the business. Life insurance gives the highest commissions of any FSP, so it made sense to start there. Moreover, the direct marketing model that NetAmbit uses to acquire customers is a rather cost- effective means.
Having become a certain size, it now makes sense to diversify into other channels and products. “The basic idea is to give customers several points of contact—call centre, website, or branch—and, the complete range of products,” says Batra.
The company is already operating 25 branches, where customers can walk in. It is also exploring a franchisee model for the really small towns. And it’s planning to launch its website within the next six months to ensure that those with access to the Internet also come into its fold.
In future, NetAmbit hopes to get a toehold into a household using one of its products, preferably life insurance, since that’s where its expertise lies. Once acquired, the customer will be handed over to the more specialised product team, which will build on the relationship, collect information about needs, and offer advice.
Batra’s planning to cast his distribution net over 6,500 towns in India for growth. That’s the number he heard in an interview with the CEO of Dish TV. “If a customer can afford to buy a Dish TV connection, he can definitely spare the cash to buy an insurance plan for health or life, or a mutual fund. So, that’s our benchmark,” he adds.
This focus on becoming a platform for FSPs is actually a departure from what NetAmbit had been doing till as recently as six month ago. So far, its employees have been ringing up people, whose names and numbers were provided to them on a sheet of paper. They would sell life insurance on behalf of their client brands. This model of direct marketing is what is called a ‘non-affinity’ based model—since sales are made to people with whom the company does not have an existing relationship.
Batra is the proud inventor of this strategy. His favourite anecdote would have you believe that “McKinsey has not seen our kind of model anywhere in Asia.”
It was a model born of necessity years ago when Batra embarked on his entrepreneurial journey in 1999. Born to a government servant, Batra grew up surrounded by relatives who were running their own businesses. “They were much richer than us. That sowed the seeds in my mind,” says he. Of course, to his young mind, business was the only means to become as rich as the chachas and tayas around him.
However, post his engineering, Batra joined Escorts for two years. His experiences there led him to his next degree—a rather aspirational one at that—an MBA from the IIM Ahmedabad. “I realised that one must do his MBA to be successful in life and then business,” he says.
That was the turning point. “This is where my perspective about life and business changed totally,” recalls Batra. “I realised that doing business is not only about making money. Money is just a product.”
In 1997, Batra joined the Godrej group as a management trainee and got his first taste of entrepreneurship. Within four months, he was handed the Real Good chicken division—a new business that not many senior people were keen to handle. So, he moved to Bengaluru and set up that division from scratch.
“I learnt how to run things. I was handling sales, marketing, production, procurement. So that gave me a great exposure to the how-to of handling businesses,” he recalls.
That stint also fit in with his future plans. “I thought I’d work for six to seven years, and then start out on my own. And my wife will provide for the family,” says Batra.
So, when his parents started looking for a bride for him, he asked them to look for someone in government service, in short someone with a stable source of monthly income. They even found him one, but, life wouldn’t be as interesting if things worked according to plan.
Three months before the wedding, the couple realised that Batra’s fiancée would not get a transfer to Bengaluru. She would have to leave her job in Delhi and look for one in the new city.
Batra was flummoxed—and almost convinced that his career as an entrepreneur had died even before it started. And then as luck would have it, the charm of a secure job starting fading out as much as the possibility of an entrepreneurial fling started gathering a shine. And entrepreneurship made to the matrix of possibilities that he had been juggling in his head. Twenty days before his wedding, Batra left Bengaluru and his safe job with Godrej to start a new life as a husband and an entrepreneur.
Fortunately for him, both his parents and bride were supportive of his move. “That was very unusual—as well as heartening. They said, ‘if you fail in business, after two years you can always go back to a job, thanks to your education’.”
The scepticism of relatives notwithstanding, Batra allowed fresh business ideas to wash over him. That was the time of the dotcom boom in India. “After wasting a few months chasing ideas around portals, I founded NetAmbit to provide offline services to online businesses,” he recalls.
From a 200-square feet space in south Delhi, five employees, and an investment of Rs 1 lakh, which his father withdrew from his provident fund account, Batra hawked offline sales and marketing services to portals, such as GoforI.com. It was a promising beginning. Within four months, his team expanded to 35 people, and his office moved into a larger space. And, then, suddenly, the dotcom bubble ran out of steam in 2001, leaving NetAmbit gasping for a while.
“By then, we had fortunately gained some expertise in marketing to SMEs, thanks to one of our clients,” he recalls. His younger brother too had joined forces with him. So, together, they decided to chart a new course for NetAmbit.
Airtel then was a new player on the Indian business horizon as well as in telecom. It was selling mobile connections mainly to large corporate players and retail customers. SMEs (small- and medium-enterprises) weren’t on its radar.
So, Batra approached Airtel to sell its connections to SMEs for a success-based fee. Since resources were limited, he decided to set up a small team of call centre executives that would call up SMEs to get an appointment. Thereafter, his much smaller sales team would strive for conversion.
Over time, the system revealed its advantages and laid the foundation for Batra’s future success with NetAmbit. For one, a sales person approaching a client with an appointment could concentrate on selling—and do so with a lot more confidence since the client’s interest was already established.
Moreover, once he knew the sales schedule, he was better able to control the team’s field movement. That saved wastage of time and allowed for better allocation of the small team.
“The model worked very well for Airtel; we did good volumes in a very short span of time. Within six months, we landed its landline business as well,” recalls Batra.
Again, he used the same formula of keeping the costs of a sales team down and multiplying its efforts with those of a call centre. “It helped us make our teams more productive, which in turn made us a highly profitable organisation,” says Batra.
Although the business did well—“and I was making more money than I had made in a job”—it wasn’t enough for Batra’s ambitions. By 2002, the IIM-A alumnus was itching for scale. He first tried asking Airtel for its national business. While waiting for the deal to come through, it hit Batra that even that might not be enough. “I realised there had to be something that could catapult this organisation into a very large one in the years to come,” says he.
It was also the time when financial services, especially insurance, were coming up in this country. “When we looked at how financial services were being sold worldwide, we realised that, in India, there was a lack of distributors in this field,” he says.
That’s when it struck home that NetAmbit could sell insurance policies, just as it had sold mobile connections and portals. The idea of setting up a distribution service that went beyond cities to B-class and C-class towns started taking shape in his mind.
His set up seemed perfect for the needs of the new business. “The same issue of reaching the smaller customer in a cost-effective manner came up here as well,” he recalls. The model also worked well in meeting the manpower requirements of a large distribution set-up. “Because in our model, 80 per cent of our work force sat in larger towns or centres, and a limited sales force was placed in smaller towns, it wasn’t difficult to hire high-quality people.” From there on, it was a matter of time before Batra turned sales into his winning formula.
The big question now is whether Batra can push his organisation through the painful process of scaling up. Says Gupta: “It’s already well established in market. What remains to be seen is how quickly Girish can take us from 4,000 to 20,000 (employees).”
Batra knows it’s a challenge. And he’s already equipped himself—both with money and talent. He’s in the midst of raising a fresh round of money, mostly to fund acquisitions in the near future.
In the past 18-to-24 months, he’s hired chiefs for functions, such as finance, technology, and marketing from some of the top management schools in the country. The leadership team at NetAmbit now has 31 members.
What’s even more important is that he’s learnt to delegate—an important trait for a founder. Gupta recalls how even till last year, a conversation with Batra would be interrupted by at least seven calls. That no longer happens. “He’s managed to bring people on board, and delegate,” adds Gupta.
“I am no longer involved in day-to-day operations. I’m focusing more on building NetAmbit as a brand and looking for more opportunities for the organisation,” adds Batra.
A lot will also depend on technology. NetAmbit’s earmarked Rs 25 crore to create an IT knowledge management platform. So far, information on customers has existed in Excel sheets. But that cannot continue for long, given Batra’s ambition of doubling his rate of customer acquisition every year from 1 lakh right now. There’s a general consensus that they’ve been slow in rolling out technology. It now has to make up for lost time.
For now, though, Batra is ready to rest of his laurels, albeit temporarily. “We are creating jobs, social security by virtue of selling insurance and, wealth for all our stakeholders.” That might not be enough for an IPO, but it sufficient to earn a good night’s sleep.