After its success with Gulshan Homz, ICCPL continued focusing mainly on the affordable real estate sector of
Question:
After its success with Gulshan Homz, ICCPL continued focusing mainly on the affordable real estate sector of the market. Sinha claimed that, unlike many companies that attempted to serve this niche segment and failed, ICCPL used what he called a “three-by-three” strategy to lower risk. A dedicated team of three people was assigned to each real estate client, and one employee was assigned to three clients. This approach aimed to achieve cross-pollination of ideas across different clients in different markets.
The three-person team, which included a content writer, a media manager, and a team leader, met with employees in the four departments that used PR services—marketing, sales, digital, and senior management. This focused PR model provided value to the client and developed a relationship to help the client justify the cost of hiring a PR agency in a fragmented industry. The ICCPL internal team gained valuable insights. For example, the content writer gained expertise in real estate news and events. This research was then shared with news reporters to help create well-researched articles and develop a long-term relationship with the news media.
India’s vast geography and diverse culture, with twenty-two languages and 1,369 dialects, made it difficult to deliver news in each local language or dialect. It was not feasible for ICCPL to open enough local offices across the country, but the widespread presence was required to achieve appropriate reach for PR campaigns. Realizing how important it was to build strong media relations with local clients in their own language or dialect and to understand their traditions, rituals, customs, and cultural activities, ICCPL adopted a cost-effective franchise model to establish local offices. The franchisee was responsible for opening the office space, building local media relationships, and launching local events as necessary. ICCPL provided the PR campaign content and strategy, allowing it to instantly execute a standardized PR campaign across India in numerous local languages and media outlets with minimal infrastructure costs. ICCPL’s clients could reach customers across the country in numerous geographical areas and target specific local communities. Franchisees benefited by receiving a minimum business guarantee agreement with fixed monthly revenue, as well as receiving reimbursement for boarding, lodging, and travel expenses related to PR campaigns. Typically, the franchisee was also provided with laptops, printers, and employment benefits worth up to
₹12,000 per person per month, including life insurance, entertainment allowance, and medical benefits.
Sinha found that most competitors tended to charge a flat rate and offer discounts of 20–30 percent, but ICCPL used an objective measure of the client’s return on investment assessment called the PR value assessment calculator to justify its pricing. ICCPL also noticed that the PR industry found it difficult to express qualitative results in meaningful ways for the client to appreciate, so it introduced a measurement plan that assessed the value of advertising campaigns. ICCPL calculated advertising value equivalents in print advertisements by measuring column inches and broadcast media by measuring the number of seconds. That measurement was then multiplied by the respective medium’s advertising rates (e.g., per inch or per second). The client was then easily able to assess the value of the advertising campaign against the price that ICCPL charged.
ICCPL provided incentives to its managers based on client satisfaction level and length of relationship with the client. ICCPL was successful in retaining more than 75 percent of its clients by regularly tracking client satisfaction, as Sinha explained: “Customer churn is like a hole in a bucket. We have a bucket that is leak-proof. There is no hole. We have retained almost all of our customers who joined since 2011.”
Question -
What are the segmentation and strategic implications of ICCPL focusing on a narrow segment of the real estate industry?
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta