 Good afternoon. Welcome to this special mark tech session. I have a very special guest today. We'll talk to the exchange for media readers, the pitch readers, the impact readers, or shall I say viewers, the line between a reader and viewers as much. We have become video first, digital first, exchangeformedia.com was started 20 years back. So we started in the digital arena, but moved to print. We have a very, very special guest. Possibly he was into mark tech before it was called mark tech or ad tech. He's been an author, he's been an investor. He was one of the blue-eyed boys in the first dot-com era. He sold his business to another entity, made lots of money, and since then has done many ads. He's advised political leaders. He's worked with them. He's written a book. He continues to use his passion for technology to help businesses. Let me welcome Rajesh Jain, the founder and CEO of Netcorp to this exchange for media mark tech talk. Thank you Rajesh for joining us. I am pleasure Anurag. Thank you very much for inviting me. You know Rajesh, you have reinvented yourself couple of times in the last 30 years. So is there a playbook to reinvention? I think the only playbook is that you've got to build profitable businesses. Otherwise you fail. Sometimes reinvention gets necessitated. But actually when I started Indiaworld, it was because I failed with my first couple of ventures after I returned from the US. Then Indiaworld got sold. So I had to get acquired by Siffy. I had to look for something new and that's how we started Netcore. And Netcore itself has morphed three or four times because that's the only way you survive and thrive. And when you say Netcore has morphed three or four times, can you take the viewers through that? Because every time you would have chosen something that the market needs, so take us through that journey. Sure. So when Netcore when we started, it was basically a mail infrastructure company. So we did mail servers, Linux based mail servers for companies that was about 20 years ago. And then now we didn't grow much for the first seven or eight years. We are very small. I kept creating new things but I could not sell it. And that's when I decided that I have to get a CEO and a CEO to help build the business out. And under their leadership, we've taken, we've sort of grown leaps and bounds. We've had now three CEOs. Kalpit Jain is our third CEO. And the first we started then with essentially enterprise SMS services. This was somewhere around 2007. Then we added email marketing around 2008, 2009. Then we had email API based services like what SendGrid has been offering for the last many years. And then 2014, 15, we added marketing automation, Martek onto the fold. And as we've been growing in India over the last four or five years, he's also expanded outside of India. So in Southeast Asia, Middle East, Africa and the US. So the growth has been both in the product side and in the geography side. Fantastic. Today, businesses are struggling. Big businesses, mid-sized businesses, small businesses. Some of them have been taken down by COVID for no fault of theirs. The sectors have disappeared because there were high contact businesses like hospitality, like airlines, like restaurants. Other businesses are not doing well because the sentiment is weak and everyone is conserving cash. Businesses are looking at performance. If they're deploying one rupee, they possibly want at least one rupee to come out if not two, five, ten. So tell us why is velvet rope marketing? We are so important. And Ken, can you for our viewers define what is velvet rope marketing? Absolutely. So Anurag, essentially the idea comes from the fact that in every business, there are certain set of customers who are disproportionately more valuable than the others. So to paraphrase a quote from Animal Farm says all customers are equal, but some customers are more equal than others. So what you really need to do is to take care of these customers very well. But before you can take care, you need to identify these customers. Who in your entire customer base really is the largest contributors to your revenues and they'll probably be even higher contributors to your profitability. So first is the identification of your quote, best customers. Then how do you create an experience which ensures they don't churn away? Because when a best customer goes, it's a big loss for any business, B2C or B2B. So how do you create what we call the velvet rope experience? Well, use velvet rope marketing to essentially make sure that they stay on. Then comes the long tail of customers. Some among them who have great potential to be best customers. So how do you identify them early? What are the signals that you can read from the data that customers today leave for us, for brands? How can you identify who will be the future best customers? And then apply the same ideas by taking data from the attributes of the best customers and then ensuring that the acquisition of new customers is also optimized. How do you acquire more profitable customers by looking at the look-alikes of the best customers? So in doing all of this, I think what businesses can really do is to do two things which both impact profitability in a big way. First is grow revenue from their best customers. They are the best bets. So you want to be able to grow revenue from them. And second is they can actually cut down advertising costs, marketing costs on the acquisition side. So you're not acquiring the whole universe. You're filtering the types of customers that you want to acquire and then onboard them faster. By doing both of these things, by ensuring that the good customers don't go and future good customers are acquired, future best customers are acquired, I think they can make a huge impact on profitability for the business. Fantastic for laying out that. You know, earlier we in the media, we in the entrepreneurial space sometimes got carried by how much money does one raise. That was the headline. Oh, it's a unicorn because it raised money at a billion dollar valuation, but it was losing 100 million dollars. Tell us how big startups, big e-commerce companies have suddenly moved to a path to profitability. Instead of being unicorns, they want to be profit cons. They want to be profitable unicorns. So tell us how has that mindset happened and how do you see things going forward? See, I think for every business, like you said in the beginning, there is a, there was the pre-COVID world which was there and now there's the post-COVID world. This is the reality. It's not going to go away anytime soon. Consumer behavior is going to be changed quite significantly. You've covered a lot of that in your previous sessions, interactions. Now, I think what really CEOs and CMOs need to look at is that in a world where profits are under pressure, where sort of capital, there are constraints on raising capital. How is it that you can actually create a new path to profitability? And that's where I sort of coined this word profit con. There's a different mindset that a profit con has with a unicorn. And I'll give you sort of the definition what I came up with and the characteristics of what I see as a profit con. The definition in my mind is a company which is profitable, which is private. So they're sort of not public. They are promoter funded, so they are bootstrapped. So they have actually built the business with the profits of the business reinvested. And they have a reasonable valuation. And it's actually possible to build businesses like these. I've done it twice in my life and successfully. Now, there is a mindset difference because the way you approach it. If capital were easy to get, like you said, you know, you're just acquiring new customers all the time, you're burning cash on every, on unit, on every transaction. Yeah, cost per acquisition mattered, but it didn't matter because you had unlimited supply of money. Absolutely. So I think in this scenario, what businesses need to do? I think there are sort of three key differences, which I look at in the mindset between a profit con and a unicorn. I think the first is that in times like these, and we have seen it happen now, a lot of unicorns tend to fire people. Profit cons tend to hire because you got to go against the conventional wisdom. I think this is a great time to build businesses and we'll see this probably a few years down the line. That if you could, if you had the capital to invest right now to actually make the right decisions on growing your team, you'll come out very strong and maybe two, three years time. The second is the thinking about the long term rather than the short term. So, you know, Simon Sinek's new book, The Infinite Game talks about this that business has no finish line. That business is, it's an infinite game that is there, the infinite mindset. So today, because I don't have to worry about investors, there's no one sitting on my head and saying you've got to cut your staff costs by 20%. And that's the easiest way to cut costs, staff and marketing costs. There's no one doing that. Instead, we have cash in the bank. We are willing to make the investments. We are saying, okay, what is the type of company we want to be in two to three years time. Now let's work towards building that company by making the right investments today. And the third is what I call anti-fragile versus fragile. So a lot of unicorns, we see, or even a lot of startups who are not profitable are very fragile because once the capital gets turned off, then it's a very difficult option that they face. There's a difficult set of options that they face. Instead, net core through our 20 years plus years in existence, we faced a number of shocks. Okay, sometimes regulatory changes. And most of the times regulatory changes. Technology advancements. Technology advancements, et cetera. We are to borrow the phrase from Nasim Taleb's book, anti-fragile. So the things basically, every shock has made us stronger. And that's what ProfiCons basically benefit from because the top team has a longer term view is willing to hire, is willing to make the right investments in growth. I think that's the foundation on which you build profitable businesses. Thank you, Rajesh. At this point, I want to talk to you about the cost of customer acquisition. How do you think that marketing technology can bring down the cost of customer acquisition? We know that, but can you give some example and a case study where the impact was so huge that, you know, it wasn't imagined before? Yeah. Essentially, if you think about what type of customers to acquire. Okay, I think that is the key. Now, how do you decide what type of customers? All customers are not equal. And this is where the idea of velvet rope marketing that I talked about earlier comes in. Now, one of the core pillars of velvet rope marketing is the ability to identify customer lifetime value. So essentially, you are going to spend a certain cost for acquisition, customer acquisition cost. But what is the customer worth? If the cake is going to be more than the lifetime value of the customer, then you're going to lose on that acquisition. So figuring out CLV becomes very important. And what we've actually done is used very cutting edge marketing models to get a forward looking predictive value on what the CLV for every customer is going to be. Now, the advantage of the CLV is it does two things for you. It lets you segment all your customers. So you can find, okay, these are my best customers. These are the rest of the customers. Second is it lets you take attributes of the best customers and say, but how can I generate more such customers? So the first pool available is the rest customer. So you have volume. How do you create value from the volume that you already have? So these are your customers who have acquired. They are not doing too many transactions. What are the methods by which you can actually get them to do additional transactions? And that's where another interesting idea comes in. That of what we call the best customer genome or the customer genome. So I can look at all the attributes of different customers and then say, okay, these are the attributes that are shared among the best customers. So how do I take my other customers and get them towards becoming like the best customers? Then when you look at acquisition, now what you're doing is again the same idea. The high CLV customers, what are the attributes of those customers? And now when I'm looking at acquisition, how do I use that data from the MarTech world for at tech? How do I use the data which is sitting in my CRM or CDP system and use it for acquisition? Because traditionally these two worlds have been largely independent. They work in silos, but if we can cross pollinate data between them, I think companies can reduce their cost of acquisition, which I think is going to become very, very important because like we talked earlier, budgets are going to shrink going forward. And second is they will acquire better customers. They will acquire customers who are going to be more profitable for them. So you have a double benefit by using this at tech MarTech bridge as it were. You know what you're saying is there used to be a Pareto's law, I don't know if you know. Yes. It says that 20% of your customers give you 80% of your revenues of value. Absolutely. In some way, you're also eluding to that in the way you're talking about that there are some customers who are more valuable and how to identify and keep them and how to identify such from the secondary set of customers that you may have. Absolutely. And see that for most businesses and now you talked about case studies, we've done analytics for a large number of companies. And in most companies, we find that 20% customers will have, let's say 50, 60, 70% of revenue. Okay, now, so these customers, now you can use a MarTech platform to really create the right journeys for them, the right campaigns for them. That becomes very critical. So it could be, well, I'll give you a simple example. We all love to watch movies, you know, multiplexes, Inox, PBR, it'll be sometime probably before we go back again there. But many of the multiplexes today still we find the experience is that it's like, you know, that movie 51st dates, you are a new customer for them every time. So the result is that when a good new movie is releasing on a Thursday morning. Okay, you are in the queue with everyone else, the digital queue, trying to book tickets. And if you forget, then you'll end up with probably seeds which you don't get together or you won't get to the right show. Imagine a different world where the brand experience is very different, where the multiplex basically sends you a mail on Thursday morning, which says, Anurag, you are part of our velvet rope marketing program. We know that you like to watch your movies on Saturday evening at 530. These are the seeds that you like. We have reserved X number of seeds for you. We will hold these seeds for the next two hours. This is only exclusively available for you. One click to pay and the seeds are yours. What a different world we are living in. Now, but to make this, they have to collect all the data. They have to act on it. They have to automate their systems. This is the real opportunity for brands today. And when we so it's not just about creating an online presence. How do you collect data at every touch point? How do you now calculate the lifetime value so I can treat Anurag differently from Rajesh? Because Anurag has probably a five times higher CLB than what Rajesh has. That is the opportunity which brands have today, which is absolutely doable. And that's the key for driving greater profitability. I will come to this point. How do you develop the skill set in your colleagues to be able to understand data? How do you re-skill them? How do you make them relevant for this new worldwide marketing scenario? Because the tools may be new. If our base, how we think, how we look at it, are appreciation for technology. So how do you build that culture? Very good question. I think what companies now need to think of is this new emerging world of data engineering, data analytics, data science and AI. So a lot of this does not have to be done by people. There is some role, of course, for then the data cleanup. So let's say you're collecting customer data. First step is how do I collect data at every touch point? Okay. So even if you are a D2C brand, let us say you are just selling through maybe Amazon or Flipkart. In those cases, you will not get data about your end customers. But can you put something in the packaging? Maybe there is a QR code. Maybe there is a link which someone can get additional warranty on where the customers have an incentive to tell you who they are. That's the first step. That does not require too much of re-engineering. It's just a mindset change that if I can get data about my customers for the next purchase and for additional upgrade, upsell, cross-sell, I can actually reach out to them directly. Number one. The skill sets which become required here are you need to do some amount of data enrichment. You need to ensure that the data is processed, data is cleaned. So that's sort of one world of data engineering. If you can club it broadly there. Then you need a team which can now, as you collect all this data, it's very hard for you to sift through all of this data, figure out the patterns that is there. This is where you now move to the AI world. There's a lot of machine learning techniques which you can apply. If you have a lot of data, you have a training set that you can give, you train the data, and then it'll start making predictions for you on the forward-looking side. That then gives you ideas on what to expect going forward. That is where you start sort of predicting the future as it were. So these are two skill sets. And the third one I think is just creativity. What is it that you can do with your best customers? We are all customers of different brands. If we just take for a moment and think where we think we are best customers of, what are the experiences that we would like which would delight us? That is where it needs creativity. It needs people, say in a customer success team of a brand who can use marketing technology platforms, who can use ad tech, who can work with agencies and companies to do this. But it's a new skill set which has to be added to the layer of creating the products, selling them and so on. That was the earlier world. Every brand has to go digital, has to think of a direct-to-consumer strategy, and has to collect data. And once you start collecting data, then this whole pipeline of data engineering, velvet rope marketing, et cetera, starts. Thank you Rajesh. As an entrepreneur, as a media platform owner, when you're talking, I'm thinking of how it applies to my own business. So I'll possibly talk to you about it some other day. I want to come to another angle. Today, when we talk of marketing, dealing with three more ways. Well, now you added the velvet in it, but there's voice, there's video, and there's vernacular, which is Indian language. Tell us, how can market take these three realities of Indian language content, because content marketing is actually a voice and a video. To a large extent, to a large extent most, sorry, to a large extent most market platforms are sort of agnostic. See, what they are building is basically, okay, so you think of it as like this, there's a content factory, and then there is a pipe to the customer. The content factory is the one which has to worry about what is the language. So they need to know what is the preferred language that a customer sort of interacts in. I'll give you my own example. GEO for some reason has figured out that I like Hindi, much more than I like English. So most of the messages, I have no idea how, most of the messages that I actually get in Hindi, okay, rather than English. And if they had just analyzed their data saying that Rajesh has never, ever clicked on a Hindi SMS, okay, then they would probably stop sending the messages, but they are probably not doing that. This is where brands need to start looking, start listening to the customer, and that's the job of the content factory team. So I can create some customers more comfortable on voice, some video will become a very important method of actually doing selling. Not many of us will be comfortable going into stores probably for some more time. So let's say you wanted to buy furniture, okay, you'll probably be very comfortable if you do it a video call on Zoom and see what is the furniture that is there. It becomes an interactive call with the store owner because you're hesitant to walk into a store. Now, these are circumstances which the brand owners are not prepared for today. So I think voice to video, sort of the gap that is there, is now getting eliminated. What you earlier did on voice, pre-COVID, lot of our calls in our own company were voice conference calls. Very few of us actually did video calls. If we could not do in person, there were voice bridges. Okay, today it's a Zoom link for everyone. We don't even think twice. Even one-to-one calls are becoming Zoom conversations because we like to see each other as an alternative to that. So the vernacular voice and video really become part of the content factory that is there. And then what brands are setting up through the Mantec platforms, the multiple delivery channels, the journeys, et cetera, is the pipe to reach to the customer. And in there, what you want to be able to do is to do personalization. You want to ensure that the right message goes to the right person at the right time to the right channel. That is where what brands also need to do is to figure out what is the channel my customer, each customer likes to interact on. And therefore, if you are an email person, if I am an SMS person, I will not get an email and you will not get an SMS. Or now WhatsApp is emerging as a channel. There are multiple options which are opening up for brands. Fantastic, Ajay. At this point, I want to come to one key question is that if you had to predict trends for the next 12, 18 months, which means that whatever we are doing right now becomes a habit, opening post three months, corona will be under control. So tell us three trends that you forecast for the next 18 to 36 months. In technology forecasting beyond that, can we have it? That's what I am not asking you about. Yeah, I think if I sort of narrow the question a little bit, so it's in the context of say for marketers and for CEOs as business owners really, or as marketers driving the businesses, what is it that they'd like? I think the number one is going to be a very sharp focus on profitability. I think the first thing to realize is that you said the next 12, 18 months, I think the corona virus backdrop is going to stay with us probably for the next couple of years. Okay, till we have a virus which gives lasting immunity. What do you mean? Pardon? You mean a vaccine. A vaccine, yes. We get a vaccine which gives us immunity for a longer period of time. I think that is, so for businesses, it's very important that the focus on profitability becomes very, very critical, which may not have been there earlier because there was always a way by which capital could be raised. Okay, in an uncertain world, investors are also less likely to invest. So number one, I think is is profitability or focus on profitability. Number two, I think is health becomes very, very paramount. So whether it is health of our own health, employees health, customers health, all of this, I mean, if you are seeing those, all the trends are pointing towards a big shift really in the customer's perception because that is paramount. Things which you always took for granted. Okay, we now hesitate. Should I, the risk level has gone up. Should I, I may want to go to that restaurant, but should I go or not? Should I take that flight or not? Okay, when I am going shopping, what is the distance that I now need to keep between the person in front of me and behind? If that person is not wearing a mask, then what do I do? So all of these things which we never thought about are all coming to the fore in our own customer experiences, which also means that the third trend sort of derives from the second one is that because there is going to be some amount of hesitations in the real world experiences that we are all going to have the requirement to have a digital presence, even for brands who have traditionally not been digital become very, very important. So I'll give you a simple example. There is a store, there is a shop outside my building, which basically is a textile shop, small shop, but fantastic collection of saris and women's garments. Now the way the shop is, well, not more than three people could be in the shop at the same time. Now the challenge for them becomes a first is of course reopening. Second is that small pace I cannot probably accommodate more than one customer. Now, optionally for them also now becomes that can I create a presence digitally, whether it's on Amazon Flipkart and the marketplaces or even mystore.com and therefore reach out to customers whom I otherwise would never have been able to tap into because I was limited by the geographical footprint of the store. So profits, health and digital, I think are going digital sort of direct to customer become that I think are going to be the three big trends and I think they are all going to be sort of irreversible for the near future. Thank you Rajesh, I have enjoyed this conversation. Just before I close this, I'll take one of the audience questions. Kushboo Priya is asking, do you think brands are ready to have marketing professionals in the next six to 12 months across sectors, given brands are facing issues of profitability and revenue in COVID times? I think they will hire the people with the right skill sets. We spoke about that earlier, see a lot of customers. A lot of those skill sets just to reiterate that for the viewers, what are those skill sets? I think the three skill sets were data engineering and understanding of machine learning, AI and ML. And third is creativity, thinking, putting yourself in the shoes of the customer, of the new customer, of the digitally savvy customer and then what is the experience that they would like to have. So I think that type of professionals that companies need to hire are ones who can make them go digital. How do I create a brand presence online? If I have a brand presence, how do I strengthen it? How can you help me collect data at every touch point that I'm having with the customer? And third is that based on all of this data that's coming in, how do I do that pipeline of data engineering, of analytics, of figuring out how to use ideas like velvet rope marketing to improve the entire experience on getting the best customers, identifying the best customers and then acquiring better ones like them. So it's really a new world of data that's coming about. I think marketing professionals who can understand this new emerging world of data analytics, data science, I think will definitely have a big demand and advantage going forward because that's what brands are going to have to do. Thank you, Rajesh. I look forward to reading your book and I hope I interact more and acquire those skills that you talk about. Thank you for talking to Exchange for Media at the Mark Tech Bridge. I hope technology can be the bridge that gets you to get the customers and the profitability that you need in COVID time. Thank you, Rajesh Jain, for being a pioneer in this space and continuing to be in mind. Thank you. Thank you very much. Anurad, great talking with you. Thank you.