For Gen Z, convenience is a very important benefit: Kavita Jagtiani

L&T Finance, once a diversified non-banking financial company (NBFC), has strategically reinvented itself as a leading urban retail lender with a focus on digital innovation and customer-centric solutions. This shift reflects a good understanding of evolving consumer needs and a commitment to seamless financial experiences. 

In this detailed interview, CMO Kavita Jagtiani shares insights on the company’s transformation journey, the marketing challenges in a competitive landscape, and how they are winning over the new generation of borrowers.

Find the excerpts below. For the full conversation, click here to visit YouTube.

Sreekant Khandekar: L&T Finance was a diversified NBFC which has now transformed itself into a retail-focused lender. From a marketing perspective, how have you been able to communicate with a new audience without alienating the old lot? 

Kavita Jagtiani: You are right, we have significantly shifted our focus. Modern consumers view brands as partners in their financial journey. And this allows us to have an end-to-end relationship and create solutions that are tailored to their individual needs. With this clarity, we've built a very powerful suite of retail solutions that are digitised and that are quick.

We know what the baseline expectation of convenience is, from both the right product and the right messaging – both are equally important. We looked at the white spaces in each key category, be it loans for homes, businesses or two-wheelers. We looked for specific pain points.

In home loans we created the ‘complete home loan’ and addressed the need gaps that were unattended. For example, when consumers take a loan, they exhaust most of their finances and don’t have an option to do up their homes. That led to the introduction of what we call home decor finance. We also introduced a dedicated relationship manager who assists them right through their home loan journey.

Modern consumers view brands as partners in their financial journey. And this allows us to have an end-to-end relationship and create solutions that are tailored to their individual needs.

Sreekant Khandekar: My question was: in acquiring a new kind of customer, were you worried about alienating the existing one?  

Kavita Jagtiani: Not really. We were able to synergise all the work we have done in the past with a more refreshed identity. The purpose of that was to stay relevant and to call out the key benefits that the consumers were seeking from us. 

Sreekant Khandekar: When a consumer has a relationship with a bank, that brand stays top of mind because there is some transaction or the other taking place through the month. How do NBFCs, such as yours, stay top of mind? Because you do want people to think of you when they want a loan.

Kavita Jagtiani: You're absolutely right. We don't have the passive engagement of deposit account holders. But we have gone and created a more proactive and intelligent engagement model.

We ensure that we have the right visibility at the right time in the consumer journey. And this is powered by our martech stack.

Combined with our propensity models and predictive analytics, this has helped us drive a degree of customisation and relevance in all our cross-selling initiatives.

We are able to offer a very tangible value, such as pre-approved loans, very specific to the consumer sets we are targeting. That’s how we are able to have an almost continuous dialogue with them. 

We have a Planet app, which has over two crore downloads.

Almost 51% of our monthly disbursement, which represents almost 40% of the total value, comes from our repeat customers. That’s how we are driving a lot of growth via our existing customers. 

Sreekant Khandekar: Companies like L&T Finance are caught between legacy banks on the one hand and young and nimble fintech companies on the other. And there is already intense competition among NBFCs. Isn’t it extremely difficult to stand out in this melee? 

Kavita Jagtiani: We leverage the imagery and trust inspired by our parent brand, the L&T group, because the name is synonymous with nation building. It has a lot of positive appeal. Also, we are an upper-layer NBFC. We are driven by very high standards of both security and compliance. 

At the same time, we are working on positioning ourselves as a digital-first lender. To do that we have our 24/7 channels – be it our Planet app or WhatsApp or chatbot, IVR, or even our website. 

Additionally, we're using AI in practically all areas – be it fraud control or underwriting or customer service. It’s our digital prowess which is enabling us to position ourselves with a great blend of trust and tech.

Sreekant Khandekar: Where has digital made the greater impact for L&T Finance from a marketing standpoint: acquisition or retention? 

Kavita Jagtiani: We are building capabilities in both, but I think our focus has been more towards customer acquisition. It also happens to be our first key pillar in our organisation's Lakshya goals, where the first pillar is all about new customer acquisition and retention.

On acquisition, we are building a lot of high-impact campaigns which are linked to the white spaces in a category. We are using all these initiatives together to build a new customer base. We have also formed a lot of partnerships with major tech players – Google Pay, Amazon Pay, Cred, PhonePe, etc. – to reach a vast and active digitally native audience. We have also been expanding our footprint through distribution in both rural and urban areas. Our current customer base stands at approximately 2.7 crore.

The work we have done so far has largely been in the areas of the product suite and technology. But there is lots to do to drive brand awareness – becoming top of mind and getting into the consideration set.

Sreekant Khandekar: You’ve been with the company for about two years. What is the big marketing challenge you face?

Kavita Jagtiani: The work we have done so far has largely been in the areas of the product suite and technology. But there is lots to do to drive brand awareness – becoming top of mind and getting into the consideration set. We need to drive up brand awareness and salience in both rural and urban areas. 

Sreekant Khandekar: L&T Finance tries to appeal to urban borrowers as well as to microfinance customers in rural areas. The two sets are entirely different. How do you communicate with both simultaneously without creating dissonance?  

Kavita Jagtiani: We look at things from the customer up and not the brand down. We recognise that we have two distinct audiences with completely different needs. Our communication is tailored to those specific audiences, and we don't use a one-size-fits-all approach. 

Let’s begin with Jaspeet Bumrah, who is our brand ambassador and who connects well with the urban and mass audiences. For the urban segment, which constitutes almost 58% of our business, we're using a lot of mass and high-impact media. For our home loans, for example, we're using connected TV and airport branding.

For the rural segment, which makes up the remaining 42%, we are focused on livelihood-based products – such as microfinance or farm equipment. There, it’s all about trust, community and personal relationships. There, our strategy is more high-touch, building trust through our dedicated feet on the street in large numbers. 

We get a lot of visibility via wall paintings and pamphlets and through our branches even as we are expanding our footprint. That’s a great way to drive authenticity. 

Sreekant Khandekar: Which of these segments is growing faster?

Kavita Jagtiani: Definitely the urban business. A lot of growth has come from home loans and two-wheelers. And we are in the process of launching some new products.

Sreekant Khandekar: The share of the urban segment today is 58%. How much was it two years ago when you joined? 

Kavita Jagtiani: Around 50%.

Sreekant Khandekar: When a customer is on the verge of deciding on a loan, what are the big factors that tilt them towards or away from a particular lender? Apart from the obvious one of interest rates?

Kavita Jagtiani: It comes down to understanding the pulse of the customer and creating insight-led communication – that’s the deciding factor. In two-wheelers, for example, speed is a great differentiator. The speed of both approval and disbursal can make a lot of difference. By doing things like this, we find that consumers are generally responding to our campaigns a lot more than they used to previously.

When it comes to business loans, access to quick and easy finance is extremely important. An additional feature we introduced was app-based withdrawal, which is so important for business owners. Features like these are becoming the big differentiators.

Among the new set of borrowers, or Gen Z, convenience is one of the most important benefits they seek. Compared to what it was in the past, the benchmark level of convenience has significantly gone up.

Sreekant Khandekar: I have interviewed several CMOs in recent months, and a common topic has been the response of the younger generation towards brands. Do you feel their attitudes are different from those of older cohorts?

Kavita Jagtiani: Among the new set of borrowers, or Gen Z, convenience is one of the most important benefits they seek. Compared to what it was in the past, the benchmark level of convenience has significantly gone up. They want a digitised process and ease of application. 

Sreekant Khandekar: Do you use social media influencers in this heavily regulated financial space, and, if yes, in what manner? 

Kavita Jagtiani: Yes, we do, but only at a very hyper-local level where they have a great following. Their ability to connect with local audiences and put the right messaging across in the local language is an important part of our campaign. 

We use these influencers mainly to support our product-led communication. They are more or less supporting our product offering in their own style and with their own content.

When it comes to the microfinance category, we use our real customers, be it in social media or via our branches. This creates authenticity. Customers can easily relate to them.

Sreekant Khandekar: How have you been using emerging technology in marketing, and specifically AI?

Kavita Jagtiani: We have been at the forefront in using AI to create personalised and interactive marketing campaigns. We use it to drive a lot of efficiency in content creation.

For example, our recent campaign, ‘Is Diwali Sab Honge Kamyab’, was an AI-generated video. Again, when we launched our campaign, ‘Bowl With Bumrah’, we created an AI microsite where consumers could upload pictures of themselves bowling. And through an AI-powered tool, they could get a personalised analysis about their bowling style and speed compared to Bumrah.

Then again, for our business loan category, we created an AI-powered microsite which allowed customers to create personalised posters with our brand ambassador and also customise taglines for their line of business. Using tech, we also created an opportunity for them to be featured on our outdoor hoardings. 

Sreekant Khandekar: Has your view of what advertising can do for your brand changed over the last two years?

Kavita Jagtiani: I would say it's evolved. At a fundamental level, the role of advertising is to, of course, generate awareness and drive growth. 

The other purpose, in this sector, is a lot more evolved: it is to create many authentic experiences with the end consumers. It could be by putting out the success stories of, say, recipients of microfinancing. Or it could be about showing the human touch in some other way. We are increasingly using these more in our communication. 

Sreekant Khandekar: Last question: When you look forward to the next two years, what is the big mountain you'd like to climb in marketing terms?

Kavita Jagtiani: I think it's very important that we drive awareness. As a consequence of doing that, we will also be able to improve our conversions and our traction in each of our categories.