Krishna Kumar raised US$150 million in December via a convertible bond issue in order to fund the group’s international aspirations as well as a program of renovation at its domestic hotels. The results of the brand study will help to direct how that money is spent.
A Question of Trust
CFOs can get involved in brand strategy and management in many other ways too. A good example comes from Zuji, an internet travel booking portal headquartered in Singapore. The company was set up in 2002 by 16 airlines across Asia, and went live with its service last year. A regional advertising and marketing campaign heralded the launch of Zuji — which means “footprints” in Mandarin — and was designed to convey the handful of characteristics that define the brand, such as ease of use and breadth of choice.
Key among those attributes was the issue of trust. In part, that meant persuading customers that Zuji was no fly-by-night dot-com start-up, explains Wong Kok Kit, CFO of Zuji. Equally, though, “it meant convincing people that they could make online payments with their credit cards without having to worry about security.” Delivering on this aspect of the brand was down to Wong and his finance team, who joined forces with VeriSign, an internet trust service provider, to build the firm’s payments infrastructure.
At first, Zuji had planned to spend 20 percent of its marketing budget building brand awareness, with the remaining 80 percent being spent on tactical advertising, highlighting special deals and cheap promotions. However, within weeks of launching, Wong and his fellow managers quickly realized that they would need to shift that split. While the marketing drive was bringing people to Zuji’s website, customers were using it simply to compare prices rather than actually book hotel rooms and flights.
Wong had upheld his promise to deliver a secure online payment system, but “we found that we hadn’t convinced people to trust us,” he recalls. In response, the company quickly raised its brand-awareness advertising from 20 percent up to 45 percent of spending. It was the right move, and business has been flowing in ever since.
The experience highlights another area where Wong gets involved with branding: measuring the effectiveness of the firm’s marketing. Because Zuji is built around a web portal, it can monitor in real-time how many customers respond to current promotions. Wong keeps a close eye on how many site visits follow from each advertising campaign, and more importantly, how many booking transactions that leads to. The company’s target is a “look-to-book” ratio of 1 percent, a benchmark taken from studies of similar services elsewhere in the world.
“As a finance guy, it’s always tricky knowing how much to spend on marketing,” he says. “But the transparency of Zuji’s website makes the process much easier.”
No doubt BenQ’s Yu is hoping Wong sees a spike in site traffic this summer, when Asian football fans book their flights to the UEFA championships.
Justin Wood is managing editor of CFO Asia, based in Singapore.