Why we still require humans in the Business World
Case study of BYJU’S Sales Model
This is the era of complete automation; from E-commerce websites to machine operation to even sales; everything can be coded to get the desired results. Technology has developed such that manual labour is no longer required. In a few years, electronic equipment shall be connected and operated wireless and with the advent of Artificial Intelligence, it will soon be possible for your phone to wake you up at your usual time, prepare coffee, switch off your AC, heat the water according to weather and start your morning playlist (Google Home already took care of the last part). With all these improvements are there still fields that require human interaction in say a business???
I work in a company (BYJU’S) which arguably has one of the biggest Sales force in the country. An Ed-tech firm of 1500 members comprising of 1000 Business Development Associates handling the sales department. With a revenue of 125 Cr. last year, the company sells around 500 products/day. A couple of years back, the same number of products were sold in almost a month! What changed? Ofcourse with investments of Facebook, Sequoia and Sofina, the brand image improved and the influx of marketing budget enabled vast reach via variety of campaigns ranging from TV Ads, FB, Google, Radio, physical ads etc. But this still does not explain the tenfold increase.
The increase is linearly proportional to the Sales Force. Two years back, the number was 20 compared to 1000. The work of the Sales force is that of any typical sales call skeleton, with major tweaks in the pitch. Intro==>Product Pitch (Awareness)==>Entice (Better Engagement)==>Close. This involves cold calling leads that we have acquired. There are 30,000 calls made from the entire office resulting in the 500 product sales. First question anyone asks about this model is the difference from a typical BPO. Well, these are BTech. Engineers recruited at exaggerated salaries for one sole purpose- Sumptuous product pitch followed by sharp closing. Coming back to the question, you make a constant effort to ignore every one of those Airtel calls. Now imagine if a friend came and told you about one of their affordable 4G packs. The difference is not trust; it is the fact that you can relate to a friend; what he needs from a connection is probably what you do as well. An engineer will always sell a course of Science better!!!
The next major question is why we cannot have an IVR (Interactive Voice Response) installed? Our expenditure on the Sales force went up from 1Cr to 50 Cr. If we have the calls automated, we’d save up on that. To answer this, we’ll have to solve one of those typical Data Interpretation question from CAT (yeah! preparing for it).
A company has 8000 leads in a month with 4% conversion. Each conversion is worth Rs 15,000(constant). It currently has 20 employees able to follow 400leads/month (constant). With recent investment, the company can acquire more leads, but with each 80,000 leads, the conversion drops by 0.2%. The investors want 168 Cr. by the end of the year. How many people should be recruited to obtain the revenue. Given, each employee is paid Rs 40,000/month. Max. leads possible is 10Lakh/month.
When you solve you get 1000 people, following 4,00,000 leads at 3% conversion, to get 18 Cr. revenue. Their salaries result in 4Cr. An IVR results in 0.1% conversion requiring about 1Cr leads per month which is almost about total students in the entire country!!! The reason behind the conversion being low is the same as reason the 011,022 calls (IVR) are blocked on your phone. The percentage drastically improves when a human is on the other end. It improves exponentially again if the human at the other end is someone who you can relate to. Hence you have 3 types of sales when it comes to Credit Cards. The IVR calls we cut immediately, the sales call we postpone for weekends and the executive when you visit the bank. All of them are required as number leads available are in that order as well.
Sales is a delicate mixture of Leads and Quality. The availability of leads defines the feasibility of type of sales. The bigger the lead funnel, the more feasible it becomes to let go on quality of Sales Force. We might have automated everything, but one thing that can never be replaced is the human aspect in everything. There’s a reason why the idea of Matrix seemed ever so relatable, especially now!!!
If you liked this, also read- Irony of Education in India