Here’s how Muthoot Finance is bringing a perception shift around gold lending with its marketing initiatives

• Muthoot Finance is one of the biggest gold loan NBFC in India and he uses his marketing effective strategies to make the brand a household name.
• Abhinav Iyer, GM, Marketing & Strategy, Muthoot Finance, tells us all about what the brand has done to not only grow its business, but grow the category as a whole.

It’s no secret that Indians love gold. In fact, gold represents a large part of the wealth of most Indian families. While for years getting loans against jewelry was seen as a last resort, recent years, especially the pandemic, have brought about a change in attitude among Indian consumers.

Gold loans have seen a steady increase over the past few years and this growth is coming from both micro-enterprises and individuals. The pandemic has hit many businesses and although things have slowly moved closer to normal, many sectors are still affected and people are still trying to find balance. In such a scenario, gold lending has emerged as both a convenient and quick option to get cash.

Over the years there has been a shift in perception when it comes to taking out a loan on gold jewelry and one brand that has tried to help the segment grow by trying to accelerate that shift is MuthootFinance. Over the past few years, the brand has consistently remained in the public consciousness with its marketing strategies. Amitabh Bachchan has been a face of the brand for four years now. He was also the main team partner of Chennai Super Kings which made him a household and trusted name.

We recently met Abhinav IyerGM, Marketing & Strategy, Muthoot Finance to understand the impact of the pandemic on business operations and the role the brand has played in not only educating consumers about the industry, but helping the industry grow .

Muthoot Finance’s Growth Story

While the pandemic has not been good for many sectors and companies, Muthoot Finance has been able to maintain growth, Iyer tells us. Consolidated assets under management have increased by nearly 80% over the past three years, from 2017-18 to 2020-21. Its consolidated net profit increased by 114% during the same period. In other words, it more than doubled during the said period.

“We have significantly increased the size of our books over the past few years. Also this year, we plan to increase the size of our books by 15%. We also achieved similar percentage growth in our profitability. We serve over 2.5 lakh customers every day through our network of over 5000 branches. Contrary to the common perception that we are a Southern-based brand, today we are a national brand and have grown steadily over the past decade,” said Iyer.

The brand has also been on an expansion mode. Over the past 2-3 years, it has added over 150 branches across the country.

“If stock prices are any evidence, we’ve taken a good step north. From every stretch of the imagination, we’ve grown, in terms of physical branch presence, customer base and profitability over the two or three years,” Iyer added. And he gives the brand’s marketing strategies a lot of credit for that growth.

Create a winning marketing strategy

It is often said that in times of crisis, marketing budgets are usually the first to be slashed. We’ve seen a lot of brands stop communicating with their consumers during the pandemic. However, Muthoot Finance is a brand that does not believe in it. In fact, he believes in staying in the public consciousness, staying constantly engaged. He has a semi-annual marketing strategy where he offers a high-decibel campaign every six months, a strategy that has worked well for him.

The brand recently launched its “Hathi pe bharosa karoge toh pakka jeetoge” campaign, featuring Amitabh Bachchan. The brand also recently launched the second season of its radio campaign titled Muthoot Finance Sunheri Soch.

At a time when more and more brands are steadily increasing their digital spend, while decreasing their spend on traditional mediums, Muthoot Finance is a brand that consistently uses mediums such as print, radio and outdoor.

Talking about why his latest radio campaign, Iyer said, “Storytelling is the oldest form of teaching” and we also believe that radio has always been seen as a credible and authentic medium of communication, it is why we have chosen it as the main means of communication to reach our target audience and new customers. We also wanted to have a feminine voice this season and bring freshness to the table, which is why this year we are extremely excited to partner with Madhuri Dixit for Season 2. We researched extensively and customized our series to launch via radio alongside heavy amplification across all major digital channels. We recorded a significant increase in our acquisition of new customers and our requests after the launch of season 1. Thus, we did not hold back from investing again in radio and celebrating the art of narration.”

On why the brand continues to invest in traditional mediums while also investing in newer mediums like digital, Iyer added, “We are a national brand with around 5440 branches across India. More than 70% of our agencies are located in semi-urban and rural areas. We have served nearly 70 million customers (including repeat customers) since our inception. So by all of those metrics, we’re a big, sprawling national brand. So it’s important that some of that mass media is still there as part of our media mix. It would never be possible for us to suppress any of the mass media because mass media reach is essential for us. Meanwhile, digital is also a very important cog in the wheel. For three years, our digital and IT teams have been working tirelessly to ensure the technological development of our products and services. We launched our Gold Loan offer at home during the pandemic. It was a huge added value from a technological point of view. There was a time when you had to go to a branch to pay off the interest on your loan. Today, you can do this using any digital payment platform, our chatbot or our WhatsApp business account. Thus, today, it is no longer necessary for people to physically go to the agency. We also invest heavily in digital marketing. At least 10% of our marketing budget is invested in digital marketing. He also added that television still accounts for the biggest chunk, between 40 and 45 percent of his marketing budgets.

Regarding its marketing strategy, Iyer said it was a combination of several elements. “Over the past few years, we have undertaken a marketing transformation. First, the partnership with Mr. Bachchan helped us cross geographies, genders and age groups. Second, we partnered with Chennai Super Kings in 2018 as they were just coming back from a short break. MS Dhoni is also someone who enjoys almost the same stature as Mr. Bachchan in Bollywood. He is a trustworthy, reliable and balanced person. Our partnership with CSK has therefore helped us in the Tamil Nadu market where we have around 900 to 950 branches. We have also used public transport very efficiently and Greater Kailash metro station and Nandanam station in Chennai have our brand image and it has completely transformed the stations. We also came up with a unique initiative during the Kumbh mela when we created huge gold lockers to help worshipers keep their valuables safe. This campaign has allowed us to win many prizes. Finally, over the years, we have created a culture of launching biannual campaigns, new communications to change mentalities. We try to be present over the years on all major ATL and BTL supports. I think these strategies have helped us grow as we’re also trying to grow the category.

Due to its presence in small towns, the brand also relies heavily on regional communication. The brand declines its communication in 11 languages ​​to ensure wide distribution.

Future areas of interest

Regarding the future scope of the segment, Iyer said, “Overall, there is about 25,000 tons of gold (household jewelry) in the country and less than 5% of it is monetized. So there is huge potential for growth, both for us and for the industry as a whole. The focus would therefore be on getting new customers to try to opt for gold loans. It is also a very simple product, you only pay interest for the number of days you have used the loan. There are many customer benefits that can help people benefit from the product. So our main goal, even from a marketing perspective, would be to grow the category significantly and help it thrive on its own. We will also continue to work continuously to bring about an attitude change in people through our marketing and communications,” concluded Iyer.