The Strategy Behind Navi’s Revolutionary Customer-Centric Products
What does it take to build products that resonate with customers and fill a gap that very few players in India’s BFSI space identify?
A good starting point would be to accurately identify that gap through extensive market analysis and then validate that hypothesis through in-depth customer research.
We had already launched a revolutionary product at the height of COVID 1.0 — personal loans that were paperless and instant. We had our sights set on the other retail loan markets, and that’s where my journey with Navi began.
Whenever we decide on a new product/market entry at Navi, the two main objectives we solve are — ‘Where to Play’ and ‘How to Win’. Seemingly simple questions, but these are crucial for us to define our North Star — and hence where we want the organization to focus.
I say this because, while it is not challenging to figure out where to play and most start-ups in the BFSI space would get similar market insights, setting that focus eliminates unnecessary distractions and enables Strategy and Business to set and achieve goals. As Professor Saral Mukherjee of IIMA enunciates so well, “Strategy is the art of closing doors”. And it is extremely crucial to close some doors in order to progress well.
“Understanding the pulse of the market and more importantly, the barriers that consumers face is critical to our mission. Market analysis and in-depth customer research through quantitative and qualitative approaches have been our guiding factors to design products that hit the right spots.”
‘The Where’ — Identifying the Potential
At Navi, we believe in solving big problems and solving them well. Hence the two important factors to identify a new market/product line are:
- Determine if the problem is large enough for us to address, i.e. what is the market size and the growth potential?
- Can we see ourselves in the top 3 or top 5 players in the market for the said product?
The home loan market in India is massive, with 5.5 lakh crores worth of home loans disbursed in 2019 with an AUM or asset under management of 20 lakh crores. In comparison, Personal loans stand at 2 lakh crores disbursed with an AUM of 4 to 5 lakh crores in 2019.
While that market size is significant, with other possibilities like car loans, 2W loans, gold loans, etc.; we also had to ascertain the growth and profitability. We conducted extensive research into historical data to find how the lending market had grown over the years while analyzing multiple metrics to project future growth and profitability. Many underlying drivers affect the lending market. For example, the growth in the car market helps project the demand for car loans.
This is the quantitative part of the market research, and most companies erringly bring their market research to a culmination here. But Navi, being a customer-centric company, takes it a step further. We conduct extensive qualitative research to understand if the initial hypothesis aligns with customer requirements and expectations by talking to customers, conducting surveys, and getting valuable insights from industry experts.
The marrying of market research and customer insights marks the end of the ‘where to play’ part of Navi’s strategy.
‘How to Win?’ Adding the Navi Touch
Strategizing to win the market requires a deeper dive into the market and customer research. Vis-a-vis the market, we conduct a thorough competitive analysis to identify what the competition is doing, both Indian and global. We look for successful examples of FinTech companies that have leveraged technology in unique ways and determine if we can emulate the same in an Indian context.
Our customer research further drills down to discover the specific problems customers face while accessing financial assistance. These problems usually give us our unique selling proposition or USP. And combined with our tech-first approach, become differentiators for Navi’s products.
For instance, Navi’s revolutionary paperless, digital and instant personal loans app addressed the problem of cumbersome documentation and long-winding, physical processes to obtain a personal loan.
Once the strategy team has hammered out the where, why, we collaborate closely with multiple teams to define the “how” and get all the other important cogs moving. This is usually when we formulate the next steps in conjunction with the business head of the product line, and all our teams, like Design, Product, Tech, get involved to design a product that embodies our ‘tech-first, digital-first, and mobile-first’ mantra.
It is Never Goodbye!
While the strategy team does take a backseat during execution, we are always on standby for an outside-in perspective if needed in situations where the product launch does not get the traction we anticipated.
We’re always ready with a solid Plan B and prepared to dive into additional research if there is a massive change in the direction, business model or if we want to scale the product differently.
Nurturing a Collaborative Environment for Overall Impact
Let me end with an example that highlights Navi’s culture of open collaboration to design products that rank high on innovation and customer experience. With health insurance, for instance, two burning questions we all had were:
- Decide on a distribution channel, and
- Define one good product without complexities (since, prima facie, health insurance is an extremely complicated product for the customer to understand and buy)
We applied our market research strategies and conducted a quantitative and qualitative analysis to narrow down the distribution channels and zeroed in on two options — a new App or a website. Abhisek from GI Product then stepped in to conduct a few well-thought-out experiments and we finally decided on the Navi Health app.
There were long experiments with the GI Product, underwriting, and our very own customer research teams who designed a quantitative exercise and simulator to identify the optimal features, as well as the optimal price for our flagship Navi Health product.
The phrase, “it takes a village” can be applied to Navi’s products, which are an embodiment of the skill and talent of multiple teams unified by a single goal: To build products that solve a pressing problem with technology at the forefront to elevate the customer experience. And it all starts from a basic premise — what does the customer want?
