Glamour of marketing different from reality of revenue: Arjun Mohan on Byju’s blunders

According to Arjun Mohan, the former CEO and VC of Byju's, there is a significant difference between the glamour of marketing and the reality of revenue from sales.”

In a candid discussion on The Powerful Human podcast hosted by Abhishek Vyas, Founder of MY Haul Store, Mohan revealed the underlying issues that contributed to the downfall of the once-prominent ed-tech giant, including the excessive marketing expenditure that plagued the company. 

One of the key revelations from the podcast was the staggering expenses associated with celebrity endorsements by international football superstar Lionel Messi and Bollywood icon Shah Rukh Khan. 

Mohan discussed the high expectations for sales outcomes from these investments and the subsequent disappointments when the anticipated returns failed to materialise.

As part of the company’s global business expansion, Byju’s became the official sponsor of the FIFA World Cup Qatar 2022 to promote the brand globally. After this deal, the ed tech company also onboarded Lionel Messi as a global ambassador in a three-year deal. According to news reports, the deal was worth $5-7 million a year. But a year later, the deal was called off on account of the liquidity crisis. 

“Strategically, the FIFA sponsorship wasn’t a wrong idea strategically as it was highly funded. But expanding in 21 countries involves huge investments. By the time FIFA came, the company ran out of money and resorted to cost-cutting,” said Mohan.  

It was also associated with the International Cricket Council (ICC).In 2019, Byju's signed a three-year jersey sponsorship deal with BCCI. The original deal with the BCCI expired in March 2022. In June, the agreement was extended until the end of 2023 for $55 million. However, as the company began cutting expenses in 2023, it announced its decision not to renew these partnerships. In November 2023, Byju’s encountered a new legal crisis when the BCCI took the company to the NCLT for non-payment of Rs 160 crore in sponsorship money.

In 2017, Byju's signed a deal with Shah Rukh Khan for an annual payment of around Rs 4 crore, according to reports. Later on, he was seen in multiple ads of Byju’s selling the product. However, in 2021, when Khan's son Aryan was involved in a controversy, Byju's halted advertisements featuring the actor. Additionally, after the contract expired in mid-2023, the company decided not to renew its endorsement agreement with Shah Rukh Khan.

Between FY16 and FY 2022, the startup’s total advertising cost stood at Rs 8,029 crore, as per news reports. 

Having officially joined Byju’s as Vice-President of Marketing, in 2016,  Mohan also took over the sales role at the tech major as he believed there should be a binding force between sales and marketing. “Marketing and sales should work together. If marketing and sales are not brought together, there won’t be any accountability.” 

Mohan said, “I joined Byju’s as an expert who has built scaled businesses and handled marketing. In the first few years of my full-time work at Byju’s, we conducted many iterations and experiments, as there was not yet a single example of a scaled-up education company on the B2C front. We focused heavily on marketing, and it was only then that people started to become aware of Byju’s.” 

However, marketing didn’t yield significant results until Byju’s adopted the field sales model, which extended beyond online sales and helped the company scale up its business. “In 2018, we established 65 offices in India, and our revenue grew from Rs 600 crore to Rs 2000 crore,” said Mohan, emphasising that listening to consumers is a key to growth.

While all the online companies were focusing on digital marketing with direct call-to-actions, Byju’s became the first online brand to launch a TV commercial. 

“Our ad was very counterintuitive and born from consumer insights. This was before widespread smartphone penetration, when only one family member, usually the father, had a phone. The whole family would sit together and watch TV during prime time, from 7:30 to 9:30 pm. We launched our TV ad during prime time to introduce our product.”

He continued, “People warned us that we might waste money on TV advertising. But in fact, while the lead cost on digital was Rs 800-900, it was reduced to Rs 60 with the TV ad. During that time, most kids would take their father’s phone to play games while watching TV. After finding the ad relatable, the kid would just download the app on his phone.”

In total, marketing strategies don’t come from conference rooms, but from the field when you listen and watch the consumer very closely, said Mohan.

Mohan resigned from the beleaguered firm earlier in April this year.