PR as a brand building tool

PR is one of the most powerful, yet most neglected tools for marketing.

Especially for consumer brands, it is most useful in creating familiarity and visibility among users. Let us see with an example:

In India, the cost of customer acquisition online through CPC and CPM based activities is anywhere between Rs.500 – Rs.1500, depending on various parameters. For a category where the average sale price is Rs.500, and where the brand is operating at a 30% gross margin, if the customer acquisition cost is Rs.1500, the brand will need 10 transactions from that customer to just cover the cost of customer acquisition.

On the other hand, in case the brand also uses PR, and is able to get some visibility for its offering, they can reach many new potential users without any direct cost. In this situation, if the ‘blended’ cost of customer acquisition i.e. the average cost of customer acquisition including paid + free PR generated users, is say Rs.300, the brand would need just 2 transactions from the customer to recover the cost of customer acquisition.

Good PR is not by accident. It is a result of a planned effort by the company. Of course, to leverage PR, the startup or its product and service should have something newsworthy and interesting for media to cover.

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Author: Prajakt Raut

Prajakt Raut is the founder of Applyifi.com, and author of the book for startups - ‘Starting Up & Fund Raising’ Prajakt personal goal in life is to encourage and assist a 100,000 people to become entrepreneurs. _____________ Prajakt is the founder of Applyifi - an online platform that provides startups a 36-point scorecard and assessment report on the venture's investment readiness [www.applyifi.com], and helps them improve their odds of getting funded. Prajakt is also the founding partner of The Growth Labs, a platform where growth-stage companies get sharp, incisive advice from senior professionals and experienced entrepreneurs. [www.thegrowthlabs.in] Before starting Applyifi, Prajakt was the head of operations at IAN, founding member of a leading incubator, and the Asia-Director for TiE (2004 - 2007). Previously Prajakt had co-founded Orange Cross, a healthcare services company, and was part of the founding team member of Idealake Technologies. While in college Prajakt had founded a printing business and has spent over 10 years working in leading advertising agencies. Prajakt’s book, ‘Starting Up & Fund Raising’, helps startups understand an investor’s perspective, and helps them improve their odds of getting funded. The book also helps entrepreneurs understand the building blocks of a business.

1 thought on “PR as a brand building tool”

  1. ….AND IN THE HIDDEN SESNSE THERE COULD BE MORE THAN ONE OBJECTIVE FOR PITCHING……ESPECIALLY THAT 1-MINUTE ELEVATOR PITCH , SOMETIMES EXPOSURE THRU AWARDS GETS THE CUSTOMERS INTERESTED TO AT LEAST SHOP ON YOUR SITE THE FIRST TIME, MAY BE ANOTHER MATTER HOW YOU KEEP THEM COMING BACK. BUT CAC STILL NEEDS TO BE RECOVERED I GUESS TO EVEN THINK ABOUT PROFITABILITY MARGINS!
    AND INTERESTINGLY, CRC – CUSTOMER RETENSION COST IS INDIRECTLY PROPORTIONAL, IN THE SENSE, THE MORE LONGER THE CUSTOMER STAYS, THE LESSER IS THE RETENSION COST AS IT GETS EVENED OUT OVER TIME! AS TIME REMAINS AN INHERENT FACTOR WHERE CRC IS CONCERNED

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