Cash-strapped Byju’s faces a concerning dilemma as the company’s sales figures show no signs of improvement, according to people in the know.

This comes after the edtech major transitioning to a sales revenue-driven salary model, which raises concerns about Byju’s financial viability and the effectiveness of its sales strategies in the competitive edtech market. It is also to be noted that April to June is the peak sales quarter for test prep companies.

“Many of us have not been able to convert leads to sales, as some of these leads have been in the system for too long and old now,” said one the sources.

While another person close to the development said that staff are resigning due to low morale and salary being linked to generated sales.

“Some teams were told last week that there won’t be any further layoffs. But teams have already lost all faith in the management. Many people are resigning everyday across all teams,” said a Byju’s employee who works for the content team.

A detailed questionnaire sent to Byju’s did not elicit any response.

In a bid to acquire more learners, Byju’s has significantly reduced the prices of its products. The annual subscription fee for the Byju’s Learning App now stands at ₹12,000 (inclusive of taxes) per year, while Byju’s classes and Byju’s Tuition Centres (BTC) are priced at ₹24,000 and ₹36,000 respectively for a full year of classes, according to the sources.

Byju’s new sales initiative

In a candid meeting with over 1,500 sales associates and managers, Byju’s founder, Byju Raveendran emphasised on sustainable and scalable model with empathetic selling approach to revive revenues. This stands in stark contrast to Byju’s in the last few years, where aggressive selling became par for the course.

“Byju’s has completed its transition from a push-based to a pull-based sales model, which is driven by love for learning rather than the fear of missing out. Managers will now act as coaches, focused on supporting and enabling the sales team rather than enforcing strict call quotas,” said a source aware of the discussions.

Associates will have the flexibility to work on their own terms, with no tracking of the number of hours spent on calls. “If you can get results by spending just half an hour a day, please do that. Want to only work on the weekends? Why not?” Byju said, encouraging a results-driven approach.

Further, associates will have the flexibility to work on their own terms, with no tracking of the number of hours spent on calls.

While, Byju’s sales associates will receive 100 per cent of the sales closed directly into their accounts the next working day, with managers receiving 20 per cent of the same from the company.

“The average sales salary is ₹40,000 per month. So, close a couple of sales and you can get not just your salary but also clear your arrears. You can earn many multiples of your CTC through this model,” Byju said.

After clearing arrears, associates will receive 50 per cent of sales closed, while managers will receive 10 per cent. Byju emphasised that this “four-week experiment” has the potential to become a “forever model,” citing the exceptional response during the first week, with some sales team members already clocking salaries commensurate with a 50 lakh per annum CTC.

At the top of the funnel has been ever growing, with the number of free users touching 250 million, there is no dearth of interest in the products and services. The sales associates are encouraged to experience the products themselves to understand their unparalleled quality and market-leading position. “I want you to understand what it means about the quality of our content and the power of our brand. So, your job is not to sell, but to counsel. You just have to guide the students and parents who are already inclined towards the transformative learning that Byju’s offers. You are not salespeople; you are education counsellors, empowering students to become better learners” Byju said.

In the new model, managers will have a role of a mentor and not of task masters. Employees are encouraged to report any ill-treatment, forced sales or rude behaviour of managers directly to Byju.

Performance based incentives

Byju’s has implemented a new policy linking sales staff’s salaries to the revenue they generate every week. According to a copy of an internal document, Byju’s has rolled out a new policy wherein the salaries of the sales staff are directly linked to the revenues they generate every week, amid the struggles that the edtech major is facing with a severe cash crunch and to cover the payroll of its employees. The policy, introduced on April 24, would be applicable for four weeks, to May 21, 2024.

In the meeting, Raveendran highlighted the sustainable and scalable nature of this sales model, inviting associates to expand their teams by inviting friends to sell and act as their managers. He envisioned a 50,000-strong sales force within the next year, demonstrating Byju’s ambition and commitment to growth.

In a relief to employees, Byju’s has paid full salaries for April to all the staff, except the sales force, whose earnings are dependent on the revenue they generate every week. Byju’s now has about 12,000 employees.

The delay stems from funds raised through a recent rights issue, which have been locked in a separate account due to the ongoing dispute with the investors. The total salary burn for the company ranges between ₹40 crore and ₹50 crore, according to sources.