Interaction with your Customers should be Direct. Do not allow any third party to hijack this Interaction.
Mr. Razak, MD, VKC Shoes was invited to speak as a Guest Speaker at ILEAD, Delhi Chapter. I was fortunate to have a recording of this interaction.
At the outset, I am deeply grateful to Leader Kirit and Leader Akash for gracefully accepting my request and arranging for this video. This interaction happened in June 2020.
Opening Note
VKC Shoes has a number of well known brands to its name in the Shoes, Sandals & Slippers segment. Ithas factories across India and has sales presence worldwide.
It was started by the father of Mr. Razak and is now headed by Mr. Razak and his brother. VKC Shoes have more than 8000 employees and 31 directors.
Following are some of the important ideas that inspired me, hope they will inspire you too.
Interact with your Customers
Mr. Razak showed that instead of following the accepted practice of the industry to appoint big distributors in each city, his father appointed small distributors across cities.
The idea was that if you are dependent on your distributors for your sales, it means that they are controlling your business. The moment your distributor moves out, your sales for that territory would crash.
Also, appointing a big distributor would essentially make you part of a big basket and your product is one of the many products that the distributor is trying to sell in the market. Your products movement would then be dependent on your margins given to distributor, the effort by distributor to educate your retailer, making your products occupy the maximum shelf space etc.
Appointing a small distributor would essentially help you occupy the larger pie of the basket. Here it is important to note that the sales to the retailer would essentially be done by you. You should interact with your retailer, educate them about your product.
Since, you are driving sales, the small distributor would have a higher probability of sticking with you. Also, since you are controlling the sales, you would be more concerned on occupying the best and maximum shelf space of a retailer.
Sharing Success
Mr. Razak also gave this radical idea of sharing your technology know-how with new and upcoming entrepreneurs. Mr. Razak knew that it may lead to growth of many competitors but he was never concerned about them.
His idea was that by sharing your technology, you are helping to improve the efficiency of the company. This will lead to better capacity utilization, low cost, improved jobs scenario and overall development of the nation. This idea is very similar to what Mr. Prakash Varmora shared with us during the session on Wealth Creation. You can find the article on that session here.
This would also bring in synergies between different companies which might open future opportunities for collaboration. In VKC Shoes case, they launched the first ever Footwear Exhibition which helped them to explore better vendors.
Companies also collaborated on bulk buying which lowered their raw material costs and hence overall price of their products.
Improving Efficiency
Mr. V Abdul Razak was very particular about not punishing the customer for your mistakes. His belief was that if you can improve your efficiency why should you charge your customers more?
Mr. Razak explained how they improved efficiency many fold by following the latest technology, implementing novel systems that improved their overall costing of the product.
He gave an example of marking of wastage expenses into the cost of the shoes. While everywhere, it is a standard thumb rule to consider 3-5% as an accepted number for adding up as cost to your product. Mr. Razak pointed out how they know that they do not have waste more than 0.5%. This benefit is simply passed on to their customers.
And…
Mr. Razak had 2 key Mantras for us:
- Whatever product you are giving, you should be satisfied with your offering. If you are not happy, there would be no repeat buy.
- Bring Transparency in the organization. All 10000 employees must know what is happening in their organization.
Mr. Razak listed the core values that they adhere to:
- Be Fair (Even if there is no competitor, pricing should be the same)
- Be Ethical
- Develop Trust
- Always be adaptable to change eg. Corona situation
- Always be fair to your employees. If you can accommodate, dont fire employees. Work out a Win-Win Arrangement.
- Review meeting every month
- Always look for the size of the market and opportunity where penetration is possible
End Note
I was very much inspired by Mr. V Abdul Razak and how sincerely he is managing his organization. I was moved by his simplicity, honesty and candid approach. Having seen very few entrepreneurs say that they are interested in showing their technology to upcoming or fellow competitors and sharing their knowhow.
I do hope that this article would have helped you dive into the mind of an entrepreneur whose motto is “Quality at Affordable Price”
I am hopeful that you would got some insights which you will implement in your business and your life.
Thank you for Reading.
~RG~