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Unique IFA proposition drives 9cr to 202cr AuM growth in just 4 years

Colonel Sanjeev Govila, Hum Fauji Initiatives

One of the most effective marketing strategies - especially in the financial advisory space is niche marketing. We covered this in a recent Marketing Wiz article Big fish in small pond, where we proposed that its smarter for an IFA to be a big fish in a small pond rather than a small fish in a big pond. One of the examples we quoted there was Colonel Sanjeev Govila's Hum Fauji Initiatives - a financial advisory firm by a fauji, exclusively for faujis.

Just how large a business can you create by focusing on just one niche - armed forces? Isn't it suicidal to say no to every civilian in the country and offer your services only to the armed forces, when they make up less than 0.5% of the population of the country, and are spread across literally the length and breadth of the country?

How sensible is it to shut your doors to 99.5% of potential clients?

The beauty of a well executed niche marketing strategy is that you can create a big business for yourself, even if you consciously say no to 99.5% of prospects. That's if your proposition for your niche is so strong and focussed that this 0.5% segment gravitates increasingly to you - irrespective of how geographically apart they may be from your physical office location.

Here are the results of one of the finest examples of niche marketing we are seeing in India's financial advisory space:


Hum Fauji's customer base has doubled from 623 to 1121 in the last 12 months, as has their AuM. They serve only members of the armed forces and their families. Only 10% of their clients are based in Delhi - 80% are from all across the country and 10% from overseas - all of whom are served by just one office in Delhi.

Just how large can this big fish in a small pond grow to? Consider this: with 90% of its client base from outside the firm's home base, Hum Fauji Initiatives has decisively broken geographical barriers with its niche marketing approach. Now, the armed forces may be less than 0.5% of India's population - but between the armed forces, reserve forces and paramilitary forces, they are 50 lakh strong. And Hum Fauji Initiatives - after its scorching AuM growth, is only serving a thousand of these 50 lakh. How's that for future potential?

Niche marketing is not only positioning - its about execution

A well executed niche marketing strategy involves careful selection of an underserved market segment, deep understanding of this segment's needs, creating a strong proposition that addresses their unique needs better than competition, and flawless execution of this unique proposition. Hum Fauji Initiatives embodies all of these traits - which perhaps explains their rapid rise in the financial advisory space.

Colonel Sanjeev Govila gives us a glimpse of what goes into making his firm a favourite among India's faujis.


Bindu Govila and Colonel Sanjeev Govila: the power duo behind Hum Fauji Initiatives

Hum Fauji Initiatives' foundations are built on principles that are ingrained into the armed forces - ethics, values and excellence. We serve the financial needs of the armed forces and their families exclusively. The only exception we make is widows - we serve them without charging fees - whether they come from the armed forces background or not.

Only word of mouth: we swim or sink with it

Our rapid growth in recent years is due only to only one factor: word of mouth. We swim or sink on the basis of what our clients think of us. Satisfied clients not only refer their friends from the forces to us, but also open the doors to conduct specialized IAPs for the armed forces across the country. In a month, I conduct at least 2-3 IAPs - literally across the country. Interest level on understanding the importance of financial planning is very high - in a recent IAP I conducted in Arunachal Pradesh, I had over 100 members of the forces attending the workshop. Our workshops focus purely on financial planning and its relevance in their lives.

This focus on financial planning has shown encouraging results - today, around 70% of our clients have opted for the financial planning route with us. This helps deepen the engagement significantly, it promotes a genuinely long term view, and builds strong relationships - which helps our clients as well as us.


Col Sanjeev Govila delivering an IAP session to senior armed forces members

We produce periodical newsletters which we send out to all our subscribers, covering different aspects of financial planning, unbiased information on new products where we get a lot of queries. It is heartening for me to see that in any IAP that I deliver, at least 15% of the audience has already subscribed to our newsletter. This percentage gives me a good yardstick to judge our recall within the community we serve.

Moulding the proposition to suit these unique clients

Our clients are migratory. They get transferred frequently, to different parts of the country. Our client engagement model therefore relies heavily on technology rather than face to face meetings. Emails, phone and skype calls - these are primary modes of contact. Its not just engagement which has to be electronic - even transaction execution has to be electronic, if we are to serve them regardless of location. Today, around 80% of our clients are on the NSE platform, which makes transaction execution simple. There is a one time effort of getting them onto the platform which involves to and fro of paperwork, but once that is done, day-to-day execution becomes really simple.

Our location in Delhi is a help - since the HQs of the Army, Navy and Air Force are all in Delhi, many of our clients drop into the city from time to time on work. Often, when they come to Delhi, they drop in to see us. Very often, they actually meet us a year or two after they have become our clients - and client and RM finally meet face to face after several rounds of engaging only electronically. I would say even today, some 40% of clients haven't really met us - though we regularly engage with them electronically.

Excellence where it matters most

At the end of the day, whatever be our positioning and our pitch, what finally matters is how well each of our RMs is able to actually deliver high quality financial planning and sensible advice. Team building has therefore been one of my biggest focus areas. Today, we have an 18 member team - 12 planners, 4 in back office, 1 in client service and 1 runner boy. A lot of what I do in building and skilling my team is really adapted from my learning from the Army. For me, when hiring new talent, ethics is far more important than skills. Skills can be taught - ethics comes from within. We have created a structured 8 day orientation program that every new member is put through, before he can get onto a client facing role. Our 12 planners are divided into 2 teams of 6 each, with each team having a team leader. We have introduced a buddy system - every planner has one buddy - 2 planners make a pair. When one goes on leave, his/her buddy gives cover to ensure no disruption to client service. Every new member will be assigned a senior member as a buddy - this automatically creates an environment for on-the-job mentoring for new members. Between the senior buddy and team leader, new members have a strong support system to lean on, while they learn the ropes. This is a concept that works very well in the army - and I find it working well in our firm too.

Since knowledge is a key differentiator in this profession, I try to ensure that all team members focus sufficiently on this aspect on a routine basis. We have knowledge sessions every Tuesday and Friday morning. Topics are decided and team members are assigned to each topic a month in advance. This gives them enough time to research and prepare a crisp presentation. They learn, become subject matter experts in their assigned topic and then teach the rest of the team. This not only sharpens their knowledge, but also hones their skills in public speaking. Once or twice a month, we invite external speakers to train our team on some of the softer aspects.

Once a month, we ask team members to write on a topic. This sharpens their written communication apart from helping them strengthen knowledge on the assigned topic. Good articles from these are included in our client newsletter. When I find some really well written pieces, I take the effort to try and get them published in the media, with due credit to the team member. Seeing their articles in our newsletters and in media is a huge motivator for the team.

All these efforts finally come down to one thing - strive for excellence in everything you do. Our RMs are the face of our organization - we have to ensure that we equip them well enough so that our firm puts its best foot forward when engaging with a client.


All content in Marketing Wiz is created by Wealth Forum and should not be construed as views of Kotak MF.

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