Conventional logic has it that in business you need to sell more to earn more. This would also mean that to increase sales one would need more sales personnel.
Nasdaq-listed Cognizant Technology Solutions has a very different take on how to rake business in and it is definitely not dependent on sales personnel.
The secret, the company's chief operating officer, Francisco D'Souza says is in having relationship managers.
Cognizant has about 120 relationship managers who liaise with company's existing clients and identify newer areas of work, as against 30-odd sales people in its entire marketing team. A formula which keeps the customer and the company happy.
Compare this with over 200-plus sales people that companies like Infosys and Wipro have on their rolls in the US. Infosys is estimated to have close to 300 sales personnel.
At the same Cognizant has grown at a faster clip than these two Indian majors, albeit on a smaller revenue base.
Cognizant had reported revenues of $368 million in 2003, a growth of 61 per cent over its revenues of $229 million in 2002. In 2004, the company is projecting revenues of about $565 million, a growth of 54 per cent.
Cognizant has upwardly revised its guidance over the last five quarters and expectations are that this quarter will be no different and an upwardly revised annual revenue guidance will be doled out yet again.
Says D'Souza, "Cognizant choose the customer-centric, relationship-driven model right from our founding and we have built upon it."
"The outcome of this model is that we service a limited number of customers and provide increasing value as we grow those relationships. The fact that we serve our customers deeply is reflected in the ratio of relationship managers and client partner to be higher than our sales professionals," he says.
Cognizant, according to D'Souza, took a conscious decision when it started that it would focus only on strategic clients that had the potential to offer the company revenues of between $5 million and $40 million over a period of time.
"With a limited number of sales professionals we cannot be in all places at times. So we are focused on certain verticals and geographies. As a result, we tend to have less churn of client base."
"The clients that we have are high quality clients. By high quality I mean the top clients in each of the industries or verticals that we specialize in. These clients are also the marquee logos in the geographies we operate in. This focus lends itself to our focused client acquisition strategy," he says.
To buttress his point further, D'Souza points out that, Cognizant picks its clients carefully and strategically. Going back in time, in 1998-99, most of Cognizant's revenues like other software services companies came from tapping the Y2K conversion opportunity.
"But even when we tapped into that opportunity, we took the decision to work only with strategic customers -- those with whom we can have a long-term relationship beyond Y2K. We had 20 odd clients during the Y2K boom and have lost only one client with most of them still being our clients."
The proof that the strategy is working can be had from the June ended quarter, when about 90 percent of its revenues came as repeat business from clients.
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