Paytm, which is for a riff on ‘Pay Through Mobile,’ released its first ad campaign — #PaytmKaro — in 2015.
Fast forward to November 7, 2016, when Prime Minister Narendra Modi demonetised Rs 500 and Rs 1,000 notes. The company capitalised on the situation and rolled out full, front-page ads in all leading dailies. Conceptualised by their in-house agency, the ads featured Modi along with the tagline ‘Ab ATM nahin, #PaytmKaro!’
Cut to the present. On January 31, the Reserve Bank of India (RBI) clamped down on the operations of Paytm Payments Bank, and restricted it from accepting deposits, top-ups, or extending credit services from February 29.
Speaking to Storyboard18, Santosh Desai, the Chief Executive Officer of Futurebrands India, a branding firm, said: “At times of crisis, one of the mistakes brands commit is they shy away (from communication) and be in denial. Second, they pretend that the problem is either not too bad, or will go away on its own, and consumers will come back once the furore dies down.”
Edited excerpts from the conversation follow:
What do you think of how the Paytm brand has evolved?
Paytm has been the face of fintech in India, and in some ways it has been the brand that has democratised payments. In that sense, it’s become fundamental to the category, almost defining the category. Over the years, the brand has been through its ups and downs.
It’s largely still seen as a brand that is central to the payment ecosystem. There is a sense that the brand has perhaps not been very strategic and focussed, and overstretched itself by going all over the place.
So there has been a bit of a cloud over the brand. As far as consumers are concerned, before this current development, I think it was seen as a brand that catered to the needs of people well.
Paytm’s print ad featuring the Prime Minister is etched in our memory. Any thoughts on how far Paytm has come from that ad to the state of the brand today?
Well, that certainly was very clever. It was a very opportunistic kind of advertising, where you seize the moment and you deliver a blow.
It became possible to use the Prime Minister’s picture because it was so central to the Prime Minister’s endeavours. It was exceedingly smart piece advertising. It was one of a kind.
It’s not fair to think of its advertising today in comparison to that. One of the problems with being an umbrella brand, where you have diverse businesses under the same brand, is that even if a small part of the brand gets damaged, which is what has happened here, the effect is on the brand overall.
Today, their advertising needs to find a way to address this. The fact is that there is an exodus of consumers who are fearing for the stability of the money they have put in. I think it has a huge backlash on the brand, which it is struggling to address.
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What is your assessment of how Paytm leveraged demonetisation?
I think Paytm did a very good job of it. #Paytmkaro was a very good idea that appropriated the category and helped foster the e-payments habit. To that extent, the long-term effect for the brand and the category was extremely positive.
Is Paytm handling the present crisis well? What would be your advice from a brand point of view?
I think the brand is struggling to find a way to speak to the consumers. I don’t think the brand has got a hang on how to address the situation.
They can be much more proactive, much more communicative than what they are. Because the truth is that the bulk of the business that consumers deal with is intact. Nothing has changed. It is the Payments Bank that has run into problems. I think they need to reassure consumers about all the concerns they have.
Given how proactive they were during demonetisation, I am surprised their communication is not more assertive today. I think it is a mistake to let the market define you. Brands need to define their own destiny. In this case, I don’t see that happening.
It’s important to have direct and honest communication with people. My advice would be to not get into a defensive mode, and accept the fact that mistakes were made. They needed to be more alert and transparent, and they weren’t.
They can say that they are trying to convince the authorities and they mean to take the right steps. They can say that they are in a robust financial position. So there is no need to be concerned.
Paytm should remind people about the role Paytm played in their lives, and that they have been around for long. It’s important to have honest communication right now, and it should come from the top. Someone like Vijay Shekhar Sharma, Managing Director of Paytm, should lead the communication, and put money behind it. If the brand can spend money during demonetisation, it’s more important to spend money now. Make use of advertising. Don’t just use digital, as this is not the time to be shy about communicating.
On Instagram, Paytm has shared testimonies from jewellers and vendors, who have spoken of the benefits of Paytm. How do you view this?
Those are useful, but I don’t think that’s good enough. A more assertive and authoritative statement is needed to reassure people that all is well. Otherwise, there won’t be a change in narrative.
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Can advertising help in such a situation? If yes, in what way?
Advertising has helped brands in several such situations. It has helped when Cadbury ran into the worm crisis. It came to the rescue of Coca Cola when it ran into the pesticide problem. It has helped establish direct and honest communication with people. The only thing brands have at a time like this is communication, particularly if there is a story to tell.
Here, there is a story to tell. There are two different businesses. It is important to protect one business from the fallout in another. It is also important to assure people who have money stuck in Paytm Payments Bank as to what their future is.
It is important to communicate with people who are afraid, as otherwise those fears will become dominant and they will define the narrative.
At a time of crisis, what are the common mistakes brands and agencies make, which further aggravates the situation?
One of the mistakes is to shy away and be in denial. Pretend that the problem is either not too bad, or will go away on its own and consumers will come back once the furore dies down.
The other is to try and weasel your way out with apologies and without actually addressing the problem. Another issue is the PR department handling crisis communication in PR terms and PR language, which is corporate language. That is a big problem because at a time like this, one doesn’t want to read or hear very qualified statements in which the terms used are very finely and legally dissected. What one requires is more human and direct communication.
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The founder of Paytm is well known for that and people need to hear someone like him. Speak from the heart. That is the kind of communication that works. Anything else that a brand does at a time like this can actually work negatively.
Cadbury’s worm crisis, Maggi’s lead crisis are a few examples of how brands have successfully bounced back. Can you share how they managed to do so, while others failed.
Coca-Cola and PepsiCo also managed to bounce back when they went through the whole pesticides controversy. For both Cadbury and Maggi, if you look at it, what allowed them to bounce back was the fact that those were brands with very strong consumer equity. They communicated thoroughly and were able to recall that equity and ride it.
When hit with a crisis, there are individuals who, instead of apologising, try to either shift the blame or give a non-apology. That backfires. Humans of Bombay is an example that comes to mind. Instead of apologising, they attempted to reason their way out. I think they got a lot of bad press because of that.
According to you, which is the most effective marketing tool during times of crisis that brands can deploy?
Every crisis is different, and so is every brand. In this case, what comes to mind is what Paytm did during demonetisation.
Their full-page ads seized the moment and spoke simply, and with authority. They should do exactly the same.
Read More: RBI’s crackdown on Paytm; tough times ahead for fintech giant