Merchant of marketing

1. Working through:

Rakesh Seth,50 Education: MBA, Jamnalal Bajaj Institute of Management Studies, Mumbai Worked with: Nestle, PepsiCo Time spent as employee: 19 years Age at starting business: 41 years Initial investment: Rs 10 lakh Sources of fund: Savings Company: Finedge India, a marketing services provider Turnover: Rs 28 crore No. of employees: 200

For Rakesh Seth it was was a dream start to a career. A management degree from a prestigious business school followed by a job as a management trainee with Nestle India in 1980. “I was 22 and there was ample opportunity to try out innovative marketing schemes,” says Seth, who rose steadily in his career to hold the position of group product manager in 1991. Setting up Nestle India’s food export division from scratch gave him the first taste of the entrepreneurial high. The resulting success led to a plum posting in London in 1993. “Life was comfortable. My job—marketing Indian packaged food—was on track,” he says.

Disenchantment set in when the company went slow on the project he was working on in 1995. “I decided to move back to Delhi,” says Seth. “I did not want to compromise on my work profile and had no qualms about quitting if need be,” he adds. Back in India JP Morgan Asset Management Company hired him as a consultant for marketing its mutual funds. From a structured work environment to a consultant who worked two days a week, Seth found the change quite unsettling. Three months later, he joined PepsiCo as vice-president (exports).

2. The first step:

Even though Seth had a good professional record, he had to establish his credentials once again at his new job. “A mid-career change requires one to build his equity and goodwill all over again. How good you have been doesn’t matter any longer,” says Seth cautioning all job hoppers.

He was soon moved to marketing, his core area of expertise. In 1998, the government changed the telecom policy to ensure it was not the caller but the called party that paid for the call to mobile phones. Seth had seen companies in the UK use this facility to promote various marketing schemes successfully. He decided to create a similar model in India. “On a number of occasions I had to outsource these services for Nestle’s products,” he says.

Seth crosschecked the viability of the idea with marketing professionals. To his delight he even found them to be potential customers. In 1999, along with his wife Kirti—a finance professional—he launched Finedge India. The company aimed to provide marketing solutions. “I was 41 and most thought I was crazy,” he says. The company’s first client was Dabur. The brief was to handle Dabur’s loyalty reward programme.

3. Initial hiccups:

Seth and his wife had been financially savvy and had built a comfortable corpus. Seth had been investing regularly in stocks. “Most of my investments had been in mutual funds and Public Provident Fund,” he says. The initial investment requirement was worked out at Rs 10 lakh. “Since banks do not give loans without a collateral, I saw no point in going for it. Instead I dug into my savings,” says Seth.

They streamlined the database, sent communications and created a helpline for customers of Dabur. However, when Seth approached other companies to provide similar “careline” facilities, he did not find many takers. The initial euphoria of tapping a virgin market took a beating. Since the call rates were quite high, companies were not too keen on investing in the service. “I realised I would have to customise my business plan to suit a company’s marketing needs. A single generic plan won’t work,” he says.

Approaching companies with presentations was also a humbling experience for Seth. “I had to seek appointments with people who were much junior to me. That rankled a bit…ego problems and all that,” he says candidly. However, his tenacity paid off and soon he had roped in Reckitt Benckiser India, ITC and Standard Chartered Bank as clients. Finedge closed the year 2000-1 with a turnover of Rs 28 lakh.

4. Surviving stagnation:

Tips for starting out Investment: Depends on the gamut of services you plan to provide Skills: Be a good salesperson Break even period: 1-2 year Bottom line: Be on your toes to grab the opportunity

Seth realised that just providing customer care facility would not help him grow. He focused on developing Finedge into a complete marketing services provider and a vehicle of brand promotion by including merchandising, sales promotions, facilitating tie-ups and market research. His major client in 2001 was Spectranet, an Internet service provider. But growth still eluded Finedge. “Telemarketing continued to be the most paying option and we needed to establish ourselves first before companies could trust us with brand promotions,” says Seth. It was also the time that saw a mushrooming of smaller telemarketing companies, adding to the competition. “Those were frustrating times. I was tempted to quit,” says Seth. But this Gemini did not give up. For two years, he took no salary. His wife, who had returned to her job, was his emotional and financial crutch during those days.

5. Expansion blues:

“I believe it takes 10 times more effort to make a million from zero than going from one million to 10 million,” says Seth. Until 2003, he continued cold calling customers, making presentations and scouting for clients. “I needed successful projects to establish my company,” he says. Having handled customer education programme for HP in eight metros and a call-in service for Lays, the company’s turnover touched Rs 5 crore in 2003-4 and the client list expanded.

“Our business is dependent on the client’s growth as marketing spend accordingly increases,” says Seth. However, he believes, each successfully executed project works as an advertisement. “And a happy client helps spread the word,” he adds. But growing fast had its disadvantages. “I needed Rs 1 crore in 2005 for building the business. I was ready to part with equity but I couldn’t find takers then,” says Seth, who eventually managed an advance payment of Rs 40 lakh from a client. The rest of the money was raised from his savings and loans from friends and relatives. “Such incidents can really slow you down,” he adds. “Today a start-up can seek the help of an angel investor or a venture capitalist in times of need. The environment is more conducive for starting an enterprise now,” he says.

6. Building further:

Despite the hurdles, Seth does not regret his decision of setting up Finedge. “I am more comfortable working for myself. Also I wanted to have more control over my timings,” says Seth, who enjoys his weekly round of bridge with friends. Seth also realised that it is not the number of clients but the quality that helps a business. “Today I have just 10 clients but my company’s turnover is Rs 28 crore,” he says. However, he admits he has failed to tap the online marketing segment. “We are now working towards realising this vision,” he adds. Each project requires close working relationship with the client. “Companies have to share valuable database with us. Trust is the basis of every project we undertake,” he says. “I have built on relationships and that is very gratifying,” he adds.