Archive for December, 2012

Your QR Code Works. What Next? – Part 1

Monday, December 24th, 2012

Of late, there has been a marked increase in QR codes conforming with the basic guidelines of how to make QR codes work. As a result, close to 50% of QR codes we’ve come across in the last 2-3 months work – as in they can be scanned successfully from a variety of smartphones. For a quick recap, QR codes enable smartphone users to visit websites and landing pages, download mobile apps, add contact info directly from business cards to their phonebooks, and do lots more – all this without the hassles of typing long URLs on their smartphone’s touchscreen keyboards.

Now that scannability of QR codes seems to have reached a tipping point, let’s turn our attention to what happens next – that is, to people who’ve found enough reason to scan the codes in the first place. As marketers will agree, the CTA (Call To Action) is really the crux of the QR code based campaign. Let’s illustrate a few best practices of CTAs using the following examples from the recent past.

3M. By scanning the QR code in the ad, readers can “Like” the Facebook page of 3M’s recent “Car Care” offering with a single tap. We love this example since it represents a very simple and cost-effective way by which a company can stay in touch with potential customers who might be interested in its new product or service but are not yet ready to buy – or “nurture a lead”, as we’d say in B2B marketing. This is the type of smart responses for which we advocate the use of our QR360 SmartResponse codes. To understand the power  of staying in touch, let’s take this counterexample from a new packaged tour operator that advertised heavily in newspapers a couple of months ago. In an opaque industry that is replete with horror stories of hidden costs, this startup stood out with its promise of an “all inclusive price, no conditions apply”. Its message was very appealing and we decided to contact this company when it was time for us to book a holiday package. However, when we’ve reached that point now, we’re not able to recall the name of the firm! If only this tour operator had used QR360 in the 3M-like fashion, it would’ve stayed on our radar via our Facebook newsfeed, the way 3M Care Care does.

APOLLO TYRES. Scanning the QR code takes the reader to a dedicated microsite on the advertised theme “You First”, rather than landing the reader on its home page and potentially losing him or her amidst the clutter of other things featured there. One tip: Using LBS technology, it’s possible to auto-fetch the City and State fields in the “LOCATE A DEALER” screen instead of asking the user to enter them manually.

AXIS BANK. Most ads for mobile apps on multiple operating systems provide one QR code for each OS version. While this sounds logical, this approach suffers from a fatal flaw, as we can see from this Pune Mirror ad that displays three QR codes, one each for the iOS, Android and Windows Phone versions of the “Car Unblocked” app. To fit them all within the space that’s normally meant for one code, the advertiser has had to resize them to below the recommended size (1″ x 1″). As a result, these QR codes fail to scan and the ad has gone waste. In contrast, the Axis Bank ad promotes its multi-OS mobile banking app – available on iPhone and Android – with a single QR code. Scanning this code takes the user to a landing page that auto-senses the smartphone’s operating system and automatically directs the user to the app store from where the appropriate version of the app can be downloaded with a single tap. This is a smart way of architecting a QR code based solution for downloading apps developed for multiple platforms. If you lack the technical skills to develop an auto-sensing landing page of the type used in this ad, you could contact external specialists – like us! – who will do this for you.

We’ll continue our coverage of QR code best practices in Part-2 of this post, which will be published by 6 January 2013. Watch this space!

Datahug Fulfills Our Dream For Network Glue

Monday, December 17th, 2012

When we’d daydreamed about “network glue” here last year, Datahug is exactly what we had in mind! By placing a Datahug ad on top of this post (, Google AdSense seems to agree with us!! We can now save ourselves the trouble of developing such an app and start using Datahug instead!!!

Now that we’re done conveying our excitement at finding an app that does what we’ve been asking for, let’s tell you more about it. This newly launched website helps salespersons minimize cold calls and, instead, “target prospects with warm introductions” by exposing “who knows who” – “prior connections” – between their colleagues and the prospect they wish to reach. Since it’s widely acknowledged that warm introductions are many times more effective at opening doors than out-of-the-blue cold calls, Datahug’s promise to “help you win business and sell more”, is credible. Datahug also indicates the strength of these connections (“HugRank”) so that salespersons can decide which of their fellow employees they should tap for quicker and better results with a given prospect.

Here are a few quick observations and comments about Datahug based on the information available on its website and a demo of it that we recently saw:

  1. The product video starts by showing a salesperson doing a Google Search on a company in their target account list and clicking the Team hyperlink to see who the key people in that company are. Datahug then automatically shows all prior connections with their respective HugRanks in a popup window. In today’s world, most salespersons conduct the search on LinkedIn. It’s not clear whether similar functionality is available for LinkedIn.
  2. Datahug taps employees’ emails, contact lists, phone books and calendars to discover connections. While these are undoubtedly rich troves of contact information, we wonder why LinkedIn Connections, Twitter Followers and Facebook Friends are not listed as sources. Maybe Datahug is wary of API tantrums thrown recently by the likes of LinkedIn and Twitter and is refraining from building a business on top of an API call.
  3. We’d like to see a mobile version of Datahug which could be used by a salesperson while on a sales call. The salesperson receives the prospect’s business card, takes a picture of it on his or her smartphone, Datahug displays prior connections instantly. This could serve as “ice breakers” during meetings (e.g. “Wow, so you know my colleague XYZ, do you?”).
  4. Datahug is subject to the infamous “network effect”. This vicious circle afflicts marketplaces (e.g. Jigsaw) and payment systems (e.g. credit cards). It translates to the following situation when applied to Datahug: Enough people will use the platform only if they’re likely to find adequate number of prior connections. On the other hand, the platform can have adequate number of prior connections only if enough people use it. Datahug acknowledges this point on its FAQ page by noting, “… the more people on a customer’s network that use Datahug, the richer the network of business relationships that can be accessed”. A critical success factor for Datahug would be to find ways to accelerate the network effect.

All in all, we think Datahug is a great weapon in a salesperson’s armory.

CTS-2010: Cheque Truncation System Or Contract Termination System?

Monday, December 17th, 2012

There has been a spate of ads and announcements over the last 3-4 weeks by banks in India about the introduction of the new Cheque Truncation System, CTS-2010, from the new year. For the uninitiated, CTS transforms cheque clearing from a paper-intensive to a digital process whereby only images of cheques move between the payer bank, payee bank and the clearing house (which, in this case, is India’s central bank, Reserve Bank of India). To ensure interoperability of the standard electronic process across all participating banks, the central bank has mandated the use of a uniform “CTS2010-compliant” cheque format that differs from the diverse cheque formats in use at present. In line with this, banks have been asking their customers to contact their nearest branch to collect the new CTS2010-compliant cheque books ASAP since their existing cheques would become invalid after 31 December 2012.

While the need to visit the branch was a minor irritant, I took it as a small price to pay for the nation’s leap to the next generation of payments technology. Incidentally, I find cheques far more convenient than electronic payments and therefore don’t consider CTS to be anachronistic. So much so that I’ll take this opportunity to reiterate my long-held belief that Mobile RDC – the smartphone extension of the cheque truncation system implemented in the USA in 2004 – is the only mobile banking killer-app so far. But, I digress. Coming back to CTS-2010, I took the time off to get hold of the new cheque books from all my banks and thought that that was all there was to the imminent cutover to CTS-2010.

Alas, that was not to be.

When I read this news article yesterday, I realized the full import of CTS-2010 and began wondering if CTS didn’t stand for Contract Termination System. Let me explain.

Banks making mortgages and auto loans to their retail customers collect repayments by way of Electronic Clearance Service (or ECS, as direct debit mandates are called in India) or post dated cheques (PDCs). Homeowners letting out their houses take PDCs from their tenants towards monthly rent. Manufacturers in certain industries (e.g. FMCG) ship goods to their stockists against pre-signed cheques held in their custody, with each cheque dated to match the respective date of shipment.

In all cases, the PDCs for the entire contract duration (e.g., 11 or 22 months in the case of a house lease agreement) are collected upfront at the time of entering into the contract. By following this practice, which is common in many countries apart from India, payees (recipients of the cheques) ensure that they’re saved the trouble of having to chase payers (issuers of the cheques) for payments every month. While this might come as a surprise to readers in Europe and America, collecting payments in many parts of the world, including India, is not as simple as submitting the invoice when the job is done. Besides, since litigating a breach of contract can be extremely time-consuming, taking PDCs in advance also serves as an implicit promise that the buyer / payee will honor his or her side of the contract because cheque bouncing is a criminal offence. As a result, very few parties will go ahead with contracts of these type – however ironclad they otherwise are – unless accompanied by PDCs.

Now, the cutover to the new CTS system effectively voids all these contracts by making the PDCs invalid from the new year – invalid simply because the cheques held by payees are not CTS2010-compliant.

The authorities are trying to suggest that it’s all a simple matter of the payee contacting the payer and exchanging CTS2010-compliant PDCs for the old ones. I can think of at least three situations where it’s not as simple as that:

  1. Payees are unable to follow up with payers to get new cheques before the deadline elapses.
  2. Payers are unable to collect their new cheque books from their banks because they’re traveling, have relocated or some other reason.
  3. Payers develop “buyer’s remorse” and procrastinate about issuing new cheques.

There are already talks about conducting a three month “parallel run” during which time the clearing house would accept both old and new cheques. This should provide some relief to payees facing the first two situations – they can simply keep depositing the old cheques during this period and follow up in parallel for the new cheques. Manufacturers facing the third situation can simply suspend supplies to procrastinating stockists. However, since borrowers have already taken possession of their homes or automobiles and tenants have already occupied the houses, banks and landlords don’t have an easy way out of Situation # 3.

With the launch barely three weeks away, I don’t hear any alarm bells from banks or landlords about the ‘contract-termination’ ramification of CTS-2010. A few bankers have attempted to make light of the issue by saying that most of their loan repayments are covered by ECS mandates, which remain unaffected by CTS-2010. Unless “most” means 95% or more, I suspect that the sheer volumes represented by the residual cases would still warrant massive efforts on the part of banks to contact borrowers and make them issue new CTS2010-compliant PDCs. It’s going to be interesting to watch this space over the next few weeks.

Retail Winners & Losers Amidst Skyrocketing Real Estate Costs

Sunday, December 2nd, 2012

The Indian retail landscape has witnessed tremendous churn in recent times. Skyrocketing real estate costs have rendered large swathes of big box and mom-and-pop retailers unviable.

In Superior Customer Insight Is Key To Winning Round 2 Of The Indian Retail Battle, I’d quoted the owner of a famous department store in Pune, India, lamenting that he would earn more returns by renting out his store premises to a bank or a call center, or even by letting the money he spent on renovating his generations-old store idle away in a bank fixed deposit (Note: Even after the GFC, fixed deposits in Indian banks yield around 10% p.a.).

To take a more recent example, a big box sports goods retailer pays INR 15 Lakhs (US$ 30K) rent for a 18K square feet store in a mall in suburban Mumbai and generates around INR 30 Lakhs (US$ 60K) in sales per month. Even assuming that the retailer enjoys a gross margin of around 50% – high as it might be, it’s par for the course  in this product category – it makes just enough money to cover its monthly rental. It will be forced to dip into the reserves of its parent company to meet its payroll, promotion, utility and other expenses (Thanks to my friend and retail specialist Jayesh Desai for sharing this info). This business is hardly glowing with signs of being viable in the long run.

Having said that, since different segments within retail have different ticket sizes, space requirements and gross margins, it implies that some segments would be more resilient to escalating rentals than others. With this hypothesis in mind, I surveyed the retail landscape in my neighborhood – Bund Garden, Kalyani Nagar, Koregaon Park, Viman Nagar and other parts of Central and North East Pune – and kept a tally of the type of stores that have stayed open versus shut down (or moved to lower cost areas) over the last couple of years.

The result of my quick-and-dirty observation and subjective analysis is given below:


  1. Retail banking
  2. Pharmacy (seems to do well even when there are two of them side by side!)
  3. Consumer electronics
  4. etc.


  1. Supermarket (food / grocery)
  2. Quick service restaurant
  3. Kirana (Indian version of mom-and-pop grocery stores)
  4. etc.
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As someone recently pointed out, many things become obvious after they’ve been said, so the above lists should make perfect sense to most readers.

However, even with the benefit of hindsight that someone else said is 20/20, I can’t understand why a retail segment like jewellery belongs to the second list. But, it does – in last couple of months, I’ve seen at least three gold and diamond stores in the surveyed region downing their shutters after being around for less than a year.