We don't need any Marketing !!!

Last year I met a successful Infrastructure entrepreneur who consulted me on an alternate revenue model for infrastructure projects. This entrepreneur's company had won contracts for construction of portions of India's Golden Quadrilateral (GQ) highway network and were looking to change the model for revenue generation.  Currently, projects in this region are offered on what is known as Build, Operate and Transfer (BOT) basis. The winning bidder completes the project with their own funds, collects payments from users during the Operate phase, then transfers operational ownership to the government.

I energetically applied all my learning from Business school to the entrepreneur's question. But I felt that there was more to it and so I kept digging. Over the next few months I realized gaps in the entrepreneur's business model. The primary issue was a lack of the marketing effort by the company. This omission had not affected revenues in the early years when the economy was going strong at 6-7%. However as the economy deteriorated in the global downturn of 2009, revenues declined. The entrepreneur fixated on the unpredictability of revenues in the only manner he thought possible. I proposed a detailed list of specific actions that the company might take to stimulate demand for the corridor operated by the company. I also advised the company on a schedule that they could follow to ensure steady and increasing revenues from various projects including airports and other highways that were still under construction.  

Time bound revenue models require that a company stimulate demand during the period when they stand to benefit. This requires an investment in a formal marketing department and a focused plan of action. Companies that are blinded to this reality tend to look to fix external variables. My customer, wanted to fix the revenue model not realizing that changes were required to their own organization. This is a classic pattern with businesses that traditionally shy away from formal marketing or strategy. Early success, blinds these companies to the need for organic evolution. When they see a problem their first response is to try to change external factors. Even successful companies need to be continuously alert to the need to evolve in order to stay relevant to their industry.