Consistency in brand promise, and service deliveries are the only way to build trust in any category.

This week, we have inthe limelight, D P Singh,Executive Director & Chief Marketing Officer (Domestic Business), SBIMutual Fund. He hasover 30 years of rich experience in the banking and financial servicesindustry. He has been with SBI Mutual Fund since 1998 and has been instrumentalin expanding its reach in both urban and rural areas. 

1. India is an under-penetrated country when it comes to savings instruments like mutual funds. Is it more urban-centric? If so, how do you increase reach in tier-2 cities and rural areas?

             Yes, India is an under-penetrated country when it comes to mutual funds. At just 11% of GDP, it ranks much below countries like Brazil (59%) and France (76%). However, the brighter side is that the MF industry in India has grown by 25% CAGR in the last 5 years. And more heartening is that the significant growth has come from non-metro centres. I would say that whoever can save, has the ability to invest. The Mutual Fund SahiHai campaign by AMFI was startedwith the purpose of reaching out to investors from across the country. While ithas worked very well, it is upon us individual AMCs to direct our investorawareness efforts to Tier-2 cities with the aim to get new mutual fundinvestors. The role of digital is vital in doing this. Adoption of the internethas been fastest in the semi-urban and tier-2 cities and we must ride on thisadvantage to create awareness and investment opportunities using digitalmediums. 

2. Typically, mutual funds appeal to a particular generation. How do you broad-base appeal to encompass all age groups? 

             Mutual funds need to be looked at as the goal-oriented solution providers. If you have a goal to achieve, there is a mutual fund solution to help you do it. That is what the narrative should be. I think as a fund house we have been trying to establish this narrative through various communications and thought-leadership platforms. The appeal of mutual funds can be for many; a first- time jobber can start Systematic Investment Plans (SIP) early in his/her career to build long-term wealth, a middle-aged person planning a family or their children’s education or marriage in the near future can choose to invest in appropriate product categories depending on their risk appetite and time horizon of goal, a person in his late 40s or 50s planning for retirement or even a retiree who wants to use his retirement corpus prudently. Mutual funds can provide a comprehensive and efficient solution to them. 

3. Trust is one of the key factors when consumers buy financial instruments. How do you build and achieve trust in the age of the distrustful consumer?

             Consistency in brand promise, and service deliveries are the only way to build trust in any category. In the BFSI industry, this becomes critical since we are custodians to people’s money. Having the lineage of SBI behind us, we at SBI MF must live up to this reputation and every act of ours should be aligned with SBI values. I believe in walking the talk and our fund philosophy, processes and dealings with our stakeholders should follow these principles. Besides performance of schemes, transparency in dealings, highest service standards and the ability to connect with the innermost aspirations of the consumers are the true tenets of building trust. 

4. Do millennials have a savings habit? How do you market to millennials?

             It is difficult to generalise millennials. I think a savings habit can be developed at any age. Due to the influence of media, aspirations have increased, and lifestyle changes have happened much faster over the last decade. There is a plethora of choices for consumption and with higher disposable income, millennials are exercising their choices freely. In such an environment, decoding saving and investing is the responsibility of credible market players in the industry. Fortunately, in India, people have a basic savings mindset, and this helps start conversations. Millennials need to know that mutual funds can help them plan for their life goals better than traditional savings options like bank savings or an FD. To them, we must communicate that investing in mutual funds is hassle-free and they can have a complete digital experience too. Features like Any Day SIP, Pause SIP facility, etc., can bring more flexibility to the investing habit. 

5. In times of slowdown, does marketing mutual funds get tougher? Any strategies for a slowdown?

There are a set of challenges and opportunities at every phase. In fact, in tough times, I believe, it is easier to market mutual funds with the right narrative. Advisors can pitch low- cost low-risk funds during a slowdown phase and move to hybrids when the going gets better. Another objective could be to promote all season funds in an investor’s portfolio. 

Today,the retail investor has matured immensely and is disciplined with hisinvestments during all market phases. During a slowdown or when the marketsoffer attractive valuations, the advice is to buy more. This helps in averagingout the cost of investments for the investor. As an industry, we haveconsistently communicated this basic premise of investing. A testimony to thisis that SIP inflows have remained positive and around the Rs. 8000cr mark forfourteen continuous months despite volatile market phases. 

6. What are the new-age marketing techniques and tools helping marketers of financial services products? Is influencer marketing and content marketing effective?

To reach out to the new-age audiences we need to adopt new marketing techniques. While mediums like print, TV, out of home media are the mainstays for large-scale visibility, it is important to innovate in messaging and customise communication for different investor segments. With data becoming affordable and widely available, digital marketing has become an efficient way of reaching out to existing and potential investors. The role of social media today cannot be emphasised more. The pace at which content is generated and consumed keeps us on our toes. SBI MF has a comprehensive presence on all social media handles and we focus on engaging users with relevant content through infographics, articles and videos. We develop content across three pillars: investor awareness, product and thought leadership. With programmatic buying on tap, the digital medium offers efficiency in reach, relevancy and cost. While influencer marketing is becoming popular, we need to evaluate its efficacy specifically for our objectives.  

7. Everyone's financial needs are different. How do you personalise your marketing?

            We as a fund house have been consciously looking to reach out to different niches focusing on their specific needs. Long before standardisation of schemes, we were promoting mutual funds as solutions to achieve financial goals in life rather than offering them as products. Our marketing campaigns have a common thread running through them – whatever your need, there is a mutual fund solution for you. 

             Amillennial will consume the message quite differently, a senior citizen wouldprefer someone (an adviser perhaps) to guide him/her. Hence communication needsto be customised accordingly. We have been actively promoting both sides of thecoin – equity and debt – offering investors solutions that will suit theirneeds best. Also, we have talked of Systematic Withdrawal Plans (SWPs) forregular cash flows to those who need regular income. To those investors whostill rely on traditional banking products, we created awareness around FixedMaturity Plans (FMPs) and how it is tax-efficient compared to Fixed Deposits. 

             Ibelieve mutual funds, even after 3-4 decades, are at an evolving stage. Thenext leap of      growth will only come when we identify andreach out to different consumer segments with relevant solutions and offer themconvenience in investing, over anything else. 

8. What is the biggest challenge that mutual fund marketing would face in the coming years?

            Marketing in general has to keep evolving with time. Very few brands, that were in existence 50 years ago are still present. Companies that adapted and stayed relevant to their consumers have survived. 

            Themutual fund industry has faced the challenge of squeezed marketing budgets postrationalisation of TER. Being unable to reach out to the diverse and emergingcustomer niches which demand awareness-building efforts, is one of the biggestchallenges the mutual fund industry faces. 

            With therange of available fund houses and schemes, today’s consumers find it hard tobe loyal to a particular mutual fund brand. However, the overall experience weprovide during the entire investing journey will define our relationship withinvestors. With investors going direct, the need to educate and help them choosethe most suitable schemes/solutions has become a very important role forAMCs.  

            Thefuture challenges need to be addressed with what we call STAKE – Service,Transparency, Accountability, Knowledge and Ethics. It defines the SBI MFvalues and commitment towards all our stakeholders.

9. There are mandatory warnings that are part of all media advertisements to make the investor aware of the risks of investment. To what level are investors aware today of mutual fund investment risks and about the way mutual funds function?

            Knowingly or unknowingly the major disclaimer has attracted a lot of attention via jokes or memes – “Mutual fund investments are subject to market risks, read all scheme related documents carefully”. Though it serves as an appropriate reminder about the inherent risks involved, the asset management industry needs to communicate better on the level of risks involved in different offerings. Risk is present everywhere, in the quality of food we eat, medicines we consume, the travel we do, but what really matters is how to communicate it without creating fear or panic in the consumer’s mind.

            We arefortunate that the mutual fund industry is highly regulated by SEBI and our jobas fund managers is to manage risk in the investors’ best interest within thatregulation. If we manage to do that job well, we will help millions ofinvestors achieve their goals. 

10. The South Indian market is largely said to be conservative in its approach when it comes to investments. Is there a marked difference that you have observed? What are the key differences between the South Indian customer and the rest of India?

Each region has its own culture and mindset of investing and savings and can’t be compared. The South investor though conservative, is also perhaps the most aware about the level of risks in different asset classes. This enables rational decision-making rather than one based on emotion only. 

A probable reason for the South beingconservative could be the existence of a large salaried class, more focused onpreservation of capital rather than generating returns oninvestments. Another reason is that the business and the trader communityare more interested in reinvesting in their business – their philosophybeing, do what you know best. Also, flows from the Gulf (specific to Kerala)were for sustenance of family in India and not for investing. 

However, this is being belied incertain markets like Bengaluru, Hyderabad and smaller centres likeVisakhapatnam and Coimbatore due to the rising migrant workforce from outsidesouth of India.  Also, due to the recent proliferation of start-ups andthe IT industry in these locations, there is an increase in young workers whoare willing to look beyond the conventional avenues of investing.

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