“There is lesser noise in the market now..” – iTrust Founders on Recession

Continuing with our series of articles on Economic Recession & Perspectives (from Startups/VCs & Industry Leaders), here is an interview with Dhruv Agarwala & Kartik Varma, founders of iTrust, a personal finance advisory firm (our review here).

How are you adapting your business model to the current circumstances. How are you now thinking about revenue and monetization of business?

  • Business model is the same – we charge and advisory fee or a distribution fee for selling product
  • In the current financial turmoil, we believe that customers need the handholding of a financial advisor even more than they do in normal times. Therefore, we are increasing our engagement with the customer, and identifying more ways in which we can touch customers’ lives
  • We have been focused on monetization since our early days because we did not have to create a new revenue model or wait to stumble upon one. We are not advertising driven at all, so not that affected by lower advertising spend if at all that happens in India. Unless customers in India completely stop buying a home to live in, don’t purchase any health insurance or choose to stop investing for their kids’ education or wedding, our revenue model does not need to change. We are getting more creative about alternative sources of revenue from the institutional side and have been keeping the cash registers ringing even though some retail customers’ investment decisions are getting deferred

What are you doing now that you were not doing previously – has anything in your execution changed?

  • Spending even more time on the basics that sometimes one loses track of in rapidly growing markets
      • Consolidating our systems and processes (six sigma service, net promoter scores, CRM, back office software etc.)
      • Tools to better engage with customers at an institutional level
      • Technology investments
  • Stronger effort in marketing and brand building. There is lesser noise in the market now, so maybe we have to say might stand a better chance of getting heard now. We continue to focus on being a thought leader in the personal finance space and writing a lot of content for the mainstream and finance industry press that helps us stand out
  • Greater emphasis on incentive based pay for the salesforce, rather than solely fixed pay

Is hiring getting tougher – how will you convince potential candidates to join you when they want the certainty of a secure job in a large company?

While hiring is not getting tougher, it will still be a few months before it gets much easier than what its been in the past year. We expect that because the larger companies in our sector have slowed down their hiring, it will benefit smaller companies like ours who are still willing to hire and give better career options to candidates than what they get at large companies.

What the past month has shown is that even larger companies can’t guarantee job security. There are about thousands of people on Wall Street who had a job a month ago but do not have an office to go to today.

We don’t want someone who craves for job security. Such a person is probably better suited to work for a post office with predictable hours and activities. What we offer candidates is the opportunity to be a part of something bigger than themselves, at a start-up that has a game plan to build a branded personal finance company in India, and one that has resources to go after this goal with a laser-like focus.

What are you doing to manage attrition?

We are weeding out non-performers and replacing them with stronger talent. Additionally, if someone wants to leave, there is not much we can do to hold them back if their commitment towards the company has been waivering.

Team members who want to stay and who we want to retain continue to see our commitment in building infrastructure for the future. They see ample evidence through our numerous activities that we are hitting our milestones and are investing in their growth and development.

How have your growth plans been affected by the current market situation – are you being more aggressive or cautious.

iTrust is building a business that solves basic financial needs for people. Our goal is to build an operation and an organization that endures any trough or peak that comes our way by way of the economic cycle. If anything, we are being more aggressive in customer acquisition because a lot of the marginal players are and will exit the market given the prevailing conditions. If there are new players thinking of entering the market, they will think twice or perhaps find it very tough to raise funding. We want to take advantage of this situation and engage with customers in any which way we can.

Even if the customer buys a small ticket product from us, we still invest the time to get the customer on board and experience the iTrust service and back office, keeping in mind the long-term that someday this same customer will return to buy a bigger ticket product from us.

We are being more aggressive in building our infrastructure (online, offline, backoffice, marketing etc.) that we feel will give us a competitive advantage when volumes finally return.

What activities do you wish you could engage in right now in the current climate?

  • More contact with the customer through a TV show
  • More content that the customer is requesting from us
  • Investor and personal finance education camps
  • Get even more aggressive in communicating the message that customers should deal with iTrust rather than some mom and pop which might not even exist in a few months from now

Recommended Read: Money Saving Tips for Entrepreneurs (Cash is King)

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