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How the sales pitch is changing in the covid age
9 min read.Updated: 02 Jun 2020, 05:53 AM ISTGoutam Das
The art of selling is going through a massive disruption. Some of these changes will outlive the pandemic
While digital sales have become a global phenomenon, some feel the trend may not be sustainable when the pandemic is contained
NEW DELHI :
It looks like a bulky stainless steel water filter. The device has two taps wedded to a basin and two pedals at the bottom. Press one pedal by foot, and soap is dispensed. The second pedal lets out water.
Shree Shakti Enterprises Pvt. Ltd, a company that sells pressure cookers, frying pans, bowls and plates under the brand name PNB Kitchenmate, quickly modified its manufacturing lines in Haryana’s Sonipat district to come up with this “Handsfree Handwash System". This was bang in the middle of India’s lockdown— in April. The paranoia about touching anything in public was just about peaking.
The commercial viability of the product, which costs between ₹15,000 and ₹25,000, was tested by Walmart, to whom Shree Shakti supplies kitchenware. And then, Walmart procured 15-20% of the manufactured machines. “We have crossed 1,100 orders and have supplied more than 800 machines thus far. Besides corporates in India and para military canteens, there are export orders from Bhutan, Bangladesh and Sri Lanka," Rahul Bajaj, managing director of Shree Shakti Enterprises said.
Shree Shakti Enterprises is a small company—it generated revenues of ₹140 crore in 2019. Larger companies too have changed direction when demand for their traditional products and services fell.
The blueprint for selling in the post-covid age includes seeking out new product lines, of course, but also switching over to newer channels to hold on to consumers and experimenting with different store formats. There has been a large-scale digitization of sales operations—and remote selling through webinars and gamified virtual walk-throughs in sectors such as real estate and technology services.
Digital sales, in fact, is now a global phenomena. McKinsey and Co. surveyed B2B businesses across 11 countries recently. In a report titled The B2B Digital Inflection point: How Sales Have Changed During Covid-19, the company stated: “Almost 90% of sales have moved to a video conference/phone/web sales model, and while some skepticism remains, more than half believe this is equally or more effective than sales models used before Covid-19".
In India, the pandemic has provoked a lot of companies to re-examine their existing distribution strategies, Lloyd Mathias, a business and marketing strategist, said. “A lot of selling will be certainly disrupted because of new concerns about hygiene, physical contact, social distancing, going to places that are not so sanitized," he explained.
While some of this is evident currently, there are some wider questions. How sustainable will this trend be when the pandemic is contained? Wouldn’t people go back to their old ways?
Modifications in the sales processes may stay on for good, Mathias believed. “The human need for physical contact, that seeing is believing, won’t go away. Certain businesses require physical presence, one-on-one convincing, live demonstrations. However, these would reduce to a considerable extent," he said. “Automobile selling for instance, would still require a car inspection, a test drive. But a consumer would do a lot of the research online and the test drive would be like a finale."
Pivot 1: new channels
A product description for Christian Dior’s popular perfume, Poison, recommends it for romantic wear, with top notes that include coriander, wildberries, orange honey, and tuberose (rajanigandha). The tuberose extract comes from Mysuru. “My first art is perfumery," Arjun Ranga, partner of Mysuru-based NR Group, the makers of Cycle Agarbatti, said. “There is huge excitement about Indian flowers in the global markets and we were one of the first companies to make tuberose flower extract."
Because of the lockdown, the company is facing headwinds in getting products to distributors and in material movement. You see, fragrance ingredients are procured globally.
Front line selling techniques, meanwhile, have changed for domestic products like incense sticks. From physical sales, orders are being taken on phone. More significantly, the firm’s e-commerce website (cycle.in) has witnessed a 100% jump in traffic. “We would have more orders from Bigbasket and Grofers. E-commerce sales are negligible now, but are growing at over 500%," Ranga said.
He added that going ahead, large-format stores would be an important target. Why is that? Consumers are consolidating purchases while reducing visits to physical stores. “People would consolidate buying into one or two times a month rather than four times a month which was the average earlier in India," he said. Bigger-format stores and aggregators will therefore flourish.
Food storage and kitchen solutions company Tupperware India is pressing the accelerator on a multi-channel approach to selling, too. The firm relied on a direct-selling model for years where thousands of women sold its products among their peer groups such as colleagues, relatives and neighbours. Last year, the company began e-commerce sales and opened physical stores. With the outbreak, physical interactions will take a back seat. The firm is switching over from direct selling to what it calls “social selling".
“We are bringing all our sales force, our 70,000 direct sellers, on a digital platform. We are giving them the tools to interact digitally," Deepak Chhabra, managing director of Tupperware India, said.
Every direct seller gets an URL, which they can circulate among their peer group. Direct sellers usually send them to their WhatsApp and other social media contacts. Once clicked, the URL takes buyers to the company’s web store. “All the product offerings and promotions are linked to this URL. They can choose, select and buy. We deliver directly to the customers and the salesforce gets paid on the basis of the sale. This way, our sales force gets continuity of business without going out physically," Chhabra explained.
This mode of selling is likely to continue even after the pandemic. Direct sellers reached 30-100 households earlier. With social selling, they can reach thousands. They can make more money, and the company, more revenues. “This mode was lying as a concept with us but we were not very agile. The day the lockdown was announced, we moved very fast—on technology, content, the training part," Chhabra added.
Pivot 2: remote selling
Paints and coatings company AkzoNobel India Ltd operated out of DLF Cyber City, Gurugram’s buzzing business district. But it was getting expensive—leases in Cyber City come at a premium. In November 2019, the company moved its office to another Gurugram business hub, Golf Course Extension Road. “We have a 30% savings in office rentals and ancillary services such as maintenance and car parking charges. All these measures helped us on the bottom-line and cash. That is what is standing us in good stead," Rajiv Rajgopal, managing director of the company said.
Covid-19 is refashioning how the company manages its retailers and distributors at this moment. Digital is replacing a predominantly physical ordering process. Until a few months ago, the company’s sales teams scheduled regular face-to-face meetings with various stakeholders to understand their requirements. They included retailers, distributors, contractors, and real estate developers among others. Customers placed orders using CRM (customer relationship management) tools or through the call centre. The use of technology in the overall sales process was 30%.
“Currently, we are developing an app which will provide the customer with an easy-to-use interface wherein details of the order placed, its status, and any current promotions that are running will be displayed. This will digitize the sales process by as much as 80%," Rajgopal said.
Selling real estate is ripe for a digital spin as well. A company such as PropTiger, a real estate advisory, generates leads on its website. Customer service representatives next get in touch with interested property buyers through phone or mail. Brokers from the company meet the potential buyers who subsequently visit real estate sites before choosing a property to invest in. Part of this buying process has moved remote. PropTiger organises webinars for developers where potential buyers are shown videos of the property, the locality.
“About 250 to 500 potential customers log in for these webinars. All their questions are answered," Dhruv Agarwala, CEO of PropTiger, Housing.com and Makaan.com, said. Each of these webinars have representation from the developer of the property. Their marketing and sales executives take questions from customers.
PropTiger has facilitated over 50 webinars for different developers, including one for Godrej Properties. “We can drive amazing volumes. It is a change in the model of how we generate enquiries and hot demands," Agarwala said and added that the company has made progress in walk throughs and 3D visualisations of a property. “The number of site visits go down significantly. If you are an investor, you need not physically visit the site any longer," he said.
Pivot 3: new demand
In a promotional video, a masked Arul Jyoti speaks in short sentences. “I am from Pondicherry. I went to the UK for my studies. I returned from London on May 15. The government allocated me to FabHotel Flamingo (in Chennai)."
Jyoti is quarantined. In Tamil Nadu, it is mandatory for those returning from abroad to be tested for covid. Those testing positive are taken to hospitals. When the results are negative, people have to undergo institutional or hotel quarantine for seven days before they are tested a second time.
For FabHotels, a budget hotels brand, the pandemic has flung open the gates to a new demand when everything else slumped. The company is working with state administrations to accommodate the quarantined as well as suspected patients. On the other hand, it is generating business from large hospitals, hosting their front line workers such as doctors and nurses. “We are in the direct line of fire. Travel and hospitality was the first to get hit as the epidemic spread and would be the last sector to recover. Out of our 600 hotels, 450 are non-operational right now," Vaibhav Aggarwal, founder and CEO of FabHotels, said. Catering to the new demand keeps the head above water for some of his properties. About 150 of his hotels are tapping the quarantine and hospital demand in top metros.
Five star and luxury hotels, meanwhile, are doing the unthinkable. Pre-covid, they mostly dismissed home deliveries of food as unbecoming of their stature. Unlike smaller independent restaurants, they offered a gastronomical experience, difficult to replicate at home. That tide has turned.
Upmarket hotels are partnering with delivery companies to send delicacies at home. “Take whatever business comes your way," said a veteran hotelier who did not want to be identified. “Such is the pressure right now." One of the five star hotels in Gurugram makes around ₹75,000 every weekday from home deliveries. “That covers the salary expenses for many in the hotel," he added.
While both the quarantine demand and the home delivery opportunity for luxury hotels appear short-term—this business may not hold six months from now—a few corporates are looking at potential new revenue opportunities that are more sustainable. Desperate times is about preparing for a longer contraction in the economy.
ELGi Equipments Ltd, a Coimbatore-based industrial air compressor manufacturer, is working on two economic scenarios. The first is a V-shaped impact, where there is a significant drop and a reasonably quick recovery. The second scenario is where there is a sharp drop and then a protracted recovery, or a U-shaped one.
The company runs a modern foundry that produces castings for its own use. “In the past, we never got distracted trying to sell castings to outsiders. But in the event of an elongated U scenario, that business model does not hold water," Jairam Varadaraj, managing director of the company said. “We may start looking for customers for this facility because it would be significantly under-utilized."
Similarly, a large number of corporates are likely to recalibrate their business models if they haven’t done it already. Selling will never be the same again.