The fan market has long been dominated by brands like Bajaj, Usha, Crompton and Havells. While these are well-respected brands, product changes have been limited largely to fan colour or shape. Spotting an opportunity, founders Manoj Meena and Sibabrata Das launched Atomberg fans in 2015, bringing some overdue technology innovation to the category.
Today, Atomberg has an annual revenue run rate of about Rs. 350 crores and has become the sixth largest fan brand in the country, even while its products sell at a significant premium compared to mass brands.
In this case study, we dive into the following:
The Atomberg Difference
The key design difference that Atomberg offers lies under the hood of their appliances. Most appliances, including fans, use induction motors. Atomberg has pioneered the use of a BrushLess Direct Current Motor (BLDC) that is more energy efficient.
The team points out the following advantages for Atomberg fans:
- Not only is an Atomberg fan remote-controlled, it also consumes only 28W of energy versus the nearly 80W that a normal fan requires.
- It is more resistant to voltage fluctuations and runs three times longer on an inverter, compared to normal fans.
- The energy saving results in an actual cost saving of Rs. 1500 per year.
Atomberg also offers a smart range that can be operated via an app, Alexa and Google Home.
“Fans as a category had not seen any innovation for decades. At the same time, BLDC motors have been around for years and are used in many applications.
Because we had expertise in BLDC motors from our previous projects, we realised there was a huge opportunity in redesigning ceiling fans with BLDC motors instead of induction motors. Not only does a BLDC motor result in 65% electricity saving, but because these motors are compact and do not generate heat, it also makes for more flexible and innovative fan design. In fact most of our best selling fans have a compact and sleek design, which would never be possible with induction motors”Manoj Meena, Co-Founder and CEO, Atomberg
The Consumer Insights
By staying close to their initial set of customers, the Atomberg team identified three target segments:
- Traditionally a low-involvement category, fans were evolving to become part of home decor. This meant that there was a segment of affluent consumers who were willing to pay a premium for design.
- Most home appliances were remote controlled, but fans were still operated through inefficient regulators. The next wave of smart home integration was well underway and there was a second segment of customers who wanted the latest, most convenient devices.
- Finally, there was a third segment, outside Tier 1 cities, where power cuts were frequent. For this segment, the money-saving proposition and long-running promise on inverters were the primary drivers.
The Initial Growth
Arindam Paul, Head of Marketing & Strategy, and part of the Atomberg founding team, says that once they had identified these three segments, digital campaigns with suitable targeting provided the initial fuel for growth.
He shares two interesting learnings from early digital marketing efforts:
- Assisted selling model: The typical Atomberg customer is a male in his mid-30s and trusting a new brand did not come easily to them. To address this, the company integrated a call center with their digital marketing operations. Prospects would click on the ad, go through the website and then call to learn about the brand. This model of assisted selling proved to be very effective for Atomberg in the early days.
- Dialling down search ads: Another learning was that Google search ads were not effective, because it was hard to compete against giants like Amazon and Flipkart who were bidding for the same keywords. Instead, ads on the platforms themselves have proved to be more efficient.
Atomberg started with a B2B model, selling bulk orders to corporate offices and institutions. They then turned to selling on horizontal marketplaces, launching their own D2C site simultaneously.
Factors for Marketplace Success
Today, Atomberg is the largest fan brand on Amazon and co-founder Sibabrata Das identifies these factors that led to their marketplace success:
- Unique offering: Atomberg offered remote-controlled fans when no one else was doing this. It is critical to have a unique offering to stand out on a marketplace
- Making reviews easier: Atomberg focussed heavily on reviews and ratings across marketplaces. The team used hand-written notes and packaging inserts with QR codes to direct people to the product page for reviews. Post-purchase emailer flows from seller-central on Amazon, also played a major role in getting more reviews.
- Getting positive reviews and ratings: To get good reviews, first and foremost, the product should deliver on expectations. After that, the key is not to over-communicate and over-sell in the listings. Instead, focus on highlighting features which are guaranteed to delight customers.
- Addressing negative reviews: Right from Day 1, Atomberg monitored critical reviews across platforms, reaching out to those consumers and proactively solving their pain points by either replacing the product, or by getting a service engineer to visit them (even if the customers had not logged a complaint). More often than not, customers came back and changed their reviews.
50-60% of Atomberg’s revenue comes from offline sales and after a pilot in Mumbai in 2019, the brand is now present offline in 150 cities.
Currently Atomberg’s own D2C site contributes 15% of its online revenue, while the remaining comes from marketplaces. However, the real value of the D2C site, says Paul, is that it helps you communicate your brand story with high impact and gather first-hand consumer insights, while controlling the experience for new launches. “You should think about your D2C site less as a revenue-channel and more as a way to communicate brand ethos,” he says.
The Atomberg team confirms what many younger D2C brands are grappling with: Performance marketing works well for initial growth and customer acquisition, but hits a ceiling and will provide diminishing returns after a certain point, causing the cost per order to escalate.
“In order to build a sustainable consumer business, you have to invest in distribution and you have to invest in brand. Only when you invest in a sustained brand presence over 4-5 years, can you hope to get any significant mindshare in the category. Both take time and resources, but they are moats that cannot be replicated.”Arindam Paul, Founding Member and Head, Marketing & Strategy, Atomberg
This naturally leads to the all-important question:
At what point should you invest in pure brand-building campaigns and when should you invest in offline media?
It varies from brand to brand, says Paul, but here are the broad factors to consider for offline media:
- Category spends: If you operate in a category where spending is high, then a small amount on ATL will not make a dent. Spend only when you can afford a minimum 10-12% of total spends. Evaluate your strategy on a market-by-market basis rather than at country level
- Target audience: Media costs will vary with target audience. For instance, to target a female audience, you can use less expensive media like afternoon shows, while for a male TG, cricket and news, while expensive, are still the best options.
- Target markets: Markets where local media is ‘isolatable’ and effective, like Tamil Nadu, Kerala, Andhra Pradesh, Karnataka and West Bengal) can give a brand excellent reach across most target segments through regional channels. This in turn means that advertising can begin with much lower budgets.
- Market-share aspirations: How much market share do you want and how soon do you want to get there? Atomberg aspires to a minimum 10-15% market share and therefore will need to spend a higher percentage (15-20%) of the total TV spend of the fans category.
- Rule of thumb: If you are a new brand, you should reach 60% of your target audience with 5+ frequency, and you should be able to sustain that spend for 4-5 years.
Atomberg launched a brand campaign in early 2020, after redesigning their brand identity with Mumbai-based agency, Chlorophyll.
The campaign, made up of short clips, focused on Atomberg’s core brand philosophy of challenging the status quo and was titled ‘WhyNot?’
After first distributing the campaign on digital channels, the campaign went to national TV news channels and regional channels across all southern states and Maharashtra. This was a strategic call, where the team chose to limit their spends to states where they already had good distribution.
The results of the campaign were heartening – brand awareness rose sharply. There was a 3x rise in organic traffic to the Atomberg site and customer acquisition costs came down by almost 50%. The campaign also boosted the image of the brand and created great interest amongst retailers.
In fact, says Paul, he wishes they had embarked on the brand-building journey earlier.
Atomberg’s next launch is a mixer grinder, again powered by a BLDC motor and available for sale in early 2022. The team says it will be India’s first inverter technology-powered mixer grinder, and both its functionality and experience will be superior to the appliances currently available in the market.
Advice to D2C Marketers from Arindam Paul
- Develop a deep understanding of your customer– who they are, why they buy, how they buy, when they buy, what they like and don’t like about your brand.
- Develop a deep understanding of all acquisition channels that work for you. When you understand the consumer, the purchase journey, the brand fundamentals and the acquisition channels, you can make connections and experiments that no agency can ever make. Also try and understand the technical aspects of key growth/performance marketing concepts like attribution
- Tips for developing deep customer understanding
- Go through the purchase journey data from Google Analytics
- Go through all reviews/feedback regularly
- Make 10-20 pre-sales calls to prospects and 10-20 feedback calls to existing consumers every month
- Visit offline retail counters and sell directly face-to face to consumers, handling their objections in real time. This will help you design better creatives and more effective landing pages
- Observe consumer behaviour at retail stores and observe consumer behaviour through heat map data on your website