Background
The idea was to approach existing set of customers, accumulated over a period of 10 years and approach them for any scrap or dead stock to dispose.
This ended up creating the largest auctions ever to be conducted by nationalized banks for stressed assets, resulting in market monopoly for the organization .
PROBLEM / OPPORTUNITY STATEMENT
The director of business development wanted to simply seek the existing customers to provide list of items unsold or by products that will not be sold (waste); the basic idea was that one man’s waste is another man’s gold and this was not going anywhere, until we go involved.
CRITICAL CONSTRAINTS
Waste or dead stock are well regulated before any disposal can take place and the sales team, without domain knowledge of the industry struggled to convince customers and they had no commercial model to propose.
KEY OBSERVATIONS
Ideas need articulation and breaking them into smaller communicable statements help dissect the idea into (& often) multiple service statements.
SOLUTION
This is a case of services repacking to cater to a specific industry, up until that point, the focus was on providing auction services for enterprises, bank NPA’s as a vertical was entirely new and created by us. Deeper conversations with business owners, their lenders and competitors gave better understanding of the real stakes and knowledge on what awaits such businesses and who really takes the decision
APPROACH TO SOLUTION
We had the team provide a 30–50-word interpretation of the same idea, individually, we ended up with six versions of the same idea. We went with each one the versions until one clicked and it was to dispose the entire business.
KEY SOLUTION METRICS
Stressed business go through number of stages of conflict before the banks are authorized to auction the assets off, auctioning something the client’s team understood very well.
Ministry of Finance was looking for way to optimize debt recovery from banks
We were in the right place to propose based our “market learning”
A circular was issued to all banks to auction via client like businesses
SOLUTION LIMITATIONS
Stressed asset auction tend to attract its own set of buyers and not all actions will be successful. The conflict-ridden nature of auctions often played a critical role in several auction failures, (un)fortunately, this was true for our competitors too.
PROCESS APPLIED
As the saying goes, Luck favors the prepared mind, we were able to cover 77% of the Non-Performing Asset auction space, by the time competition could catch up, the market was ours to keep
REVENUE IMPACT
The vertical added additional Rs. 12 Cr to the business and started augmenting auctioning as deep vertical to support other industries.
AD-HOC CONTRIBUTORS
An auction vertical was created with team size reaching 80+, this covered nearly 36 banks in the country and addressed decades worth of disputed assets that were up for auctioning. We made history when MEGA auction got announced by India’s largest Bank
KEY BENEFITS OF SOLUTION
This introduced a new revenue stream that capitalized on existing service assets and domain understanding, with limited time to adapt and lack of training requirements, the business thrived as the opportunity developed.