SALES AND DISTRIBUTION

CASE STUDY

Why it still pays for Eureka Forbes to knock on doors despite

extending sales online
Synopsis
Over 8,000 Eureka Forbes salespersons still knock on 30 lakh doors (a unit for homes) every year selling
water purifiers, vacuum cleaners and air purifiers.

Eureka Forbes encourages its salespeople to watch matinee shows during work. Seriously.
The tacit approval has come right from the top. “I don’t want my guys to knock the doors
when housewives are taking a siesta,” says Marzin Shroff, CEO – direct sales & senior vice-
president (marketing), Eureka Forbes. “They’d rather spend their noon in a theatre and
approach prospective customers during evenings.”
Shroff knows a thing or two about selling. He has been heading the direct sales vertical of
arguably India’s first “people to people selling” (P-to-P sales) company for more than a
decade. Since 2011, Eureka Forbes has gradually extended its sales efforts online, but it
has not given up on its ‘tried ‘n’ tested’ direct selling model

The company still derives a significant share of its revenues by knocking on the doors of
prospective customers. Over 8,000 Eureka Forbes salespersons still knock on 30 lakh doors
(a unit for homes) every year selling water purifiers, vacuum cleaners and air purifiers.

“We’re not a multi-level marketing company… MLM is a bad word, mostly associated with
Ponzi schemes. Our salespersons sell directly to customers,” clarifies Shroff.

Dual Approach-
The ‘digital–direct sales’ dual approach has helped the company improve its critical
numbers. Eureka Forbes’ total income has gone up from Rs 991 crore to Rs 1,709 crore
between 2010 and 2015, according to data sourced from CMIE. Profits have risen from Rs
19 crore to around Rs 40 crore last fiscal.
The company declined to part with its own set of business figures.

“We generate leads from our digital extension… Beyond that, we’ve also digitised our sales
force. We get to know what our agents are doing sitting in our offices. Every aspect of sales
is done online now,” Shroff explains.
Eureka Forbes, in a way, was forced to divide its attention between direct sales and online.
Its prospective customers were spending more time on internet. The company started
getting more “eyeballs” using email and text message tracers, social media posts and
presence on e-commerce websites. That apart, the company also encountered several
practical problems in its P-to-P sales model.
“Gone are the days when you could just walk into an apartment complex and knock on
doors. These days, watchmen do not allow us to go beyond the main gate. So we decided to
meet them online, get a prior appointment and then visit their homes,” Shroff says.

These days, Eureka Forbes’ salesmen rarely go knocking on doors without prior
appointments. They work around a blend of technology-aided sales leads and cold calls.
This ‘technology cum feet-on-the-ground’ strategy seems to have worked well for the
company. Eureka Forbes salesmen, on an average, visit 40 homes every day to yield six
appointments,
three ‘demo’ requests and one effective sale.
“We touch the lives of one out 3.6 people in the country. These customers may be using at
least one of our main products,” Shroff claims.
To its credit, Eureka Forbes has been open to change; reinventing itself every time a
strategy was becoming staid. In early 2000, the management decided to roll out its own retail
stores across the country. This plan, however, was cut short when the company started
reporting losses. It reversed to its perfected direct sales model to regain stability. Over the
next few years, it forayed into newer products and home technologies.

“Some of our products are so technologically evolved that we’ve to explain them personally
to our customers. Demo sessions help in such cases,” Shroff adds.

Seeing is Believing.
Incidentally, this was the same thought process when Eureka Forbes launched its first
vacuum cleaner in 1982 – clumsily packed in a VIP suitcase, weighing over 8 Kgs. The
company had then hired a consultant to analyse the market for vacuum cleaners. A few days
later, the consultant submitted a report advising the company to shut shop and go as no one
would buy vacuum cleaners for Rs 3,000, when brooms were available for Rs 3 apiece.

“We were pretty sure about our business model even then. We knew, we only had to meet
people and educate them about vacuum cleaners. Sales would happen later. And it did,”
Shroff says.

Eureka Forbes claims to have a market share of over 80% in the vacuum cleaner market; it
enjoys 67% and 40% market share in water purifier and air purifier segments respectively.

Over the past three decades, the company has revelled in P-to-P selling like no other. Its
salesmen — Euro champs — are trained to smile, talk and close deals. The sales pitch (or
script) varies every time depending on the profile of prospective customers. No wonder, the
nosy-but- friendly Eureka Forbes salesman asks questions about a child’s health or parents’
well-being. “To be a good salesman, you have to be a good listener… People have to be
trained – to listen, provide solution and then sell,” Shroff says.

Eureka Forbes’ success comes at a time when the direct selling market in India — estimated
to be worth Rs 7,200 crore — is facing stiff competition from general retail and e-commerce
companies. Apart from Eureka Forbes, companies like Dell, Amway, Tupperware, Oriflame
and Herbalife use direct selling strategies (or MLM strategies) to reach their targeted
customers.

“We’ve benefited immensely from our blended strategy,” affirms Shroff.

 
Questions-Answers

Question.1 Consumers today are far more sophisticated than before. Does Eureka
Forbes still need to continue with direct selling model, when consumers are well
acquainted with its products? After all, direct selling is an expensive means of
reaching out to consumers.

Answer.1 Eureka Forbes is going well with their blended strategy. The company still derives
a significant share of its revenues by knocking on the doors of prospective customers. Over
8,000 Eureka Forbes salespersons still knock on 30 lakh doors (a unit for homes) every year
selling water purifiers, vacuum cleaners and air purifiers. Eureka Forbes followed the
globally “tried and tested” Direct Sales route for marketing.
However, Eureka Forbes, was forced to divide its attention between direct sales and online
because its prospective customers were spending more time on internet. The company
started getting more “eyeballs” using email and text message tracers, social media posts
and presence on e-commerce website. So, this is how they managed the dual concept.
Also “Gone are the days when you could just walk into an apartment complex and knock on
doors. These days, watchmen do not allow us to go beyond the main gate. So, the company
decided to meet them online, get a prior appointment and then visit their homes,”
Also, the ‘digital–direct sales’ dual approach has helped the company improve its critical
numbers. Eureka Forbes’ total income has gone up from Rs 991 crore to Rs 1,709 crore
between 2010 and 2015.
Question.2 How would Eureka Forbes manage to keep its sales force motivated, when
there are several opportunities available for the salespeople in the market?
Answer. 2 The company employed dynamic, highly motivated individuals called ‘Euro
champs’ Eureka Forbes encourages its salespeople to watch matinee shows during work.
Seriously. “I don’t want my guys to knock the doors when housewives are taking a siesta,”
says Marzin Shroff, CEO – direct sales & senior vice-president (marketing), Eureka Forbes.
“They’d rather spend their noon in a theatre and approach prospective customers during
evenings.”
The company has revelled in P-to-P selling like no other. Its salesmen — Euro champs —
are trained to smile, talk and close deals. The sales pitch (or script) varies every time
depending on the profile of prospective customers. No wonder, the nosy-but- friendly Eureka
Forbes salesman asks questions about a child’s health or parents’ well-being. “To be a good
salesman, you have to be a good listener… People have to be trained – to listen, provide
solution and then sell.

SOURECE: ECONOMIC TIMES

LINK: https://economictimes.indiatimes.com/industry/cons-products/durables/why-it-still-pays-for-
eureka-forbes-to-knock-on-doors-despite-extending-sales-online/articleshow/53163937.cms?
from=mdr
Submitted By:
RITIKA RUSTAGI
19BSP2254