Why does Zerodha NEVER advertise? Nithin Kamath answers
why does zerodha never advertise? nithin kamath answers
In a post on X on Tuesday, co-founder of Zerodha Nithin Kamath outlined his reasoning for not believing that his company needs to advertise. He mentioned that when a business does not have to take into account the acquisition costs and lifetime worth of its clients, it is in a terrific position to be.
Nithin Kamath said, "It is a good place to be when you don't have to look at customers in terms of acquisition costs (CAC) and lifetime value (LTV). This way, we don't have to push customers to take a trade, we can stay spam-free, we don't have to sell life insurance as an investment, and more."
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In contrast to other discount brokers, Zerodha demonstrated impressive results, as the number of its clients increased by 1.5% month over month (MoM) to reach 74 lakh. In terms of active clients on the National Stock Exchange (NSE), Zerodha consistently outperforms traditional brokers, ranking among the top five bargain brokers in India.
Kamath related his observation from watching cricket matches where brokerage company commercials were frequently seen.
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"I watched a cricket match after a long time, and damn! Every fourth ad is that of a brokerage firm. Sign of good times for the markets," he said.
He continued by saying that, among other things, Zerodha can continue to be spam-free and avoid having to market life insurance as an investment by eschewing advertising.
Zerodha, an Indian discount broking revolution, was founded by Nithin and Nikhil Kamath. Last year, Kamath discussed insights into the company's expansion in a podcast.
Reportedly, he said, "In 2020, the assets under management (AUM) of our customers were maybe Rs 15,000 crore. I don’t think any of our peers, like brokers, looked at us very seriously. They were like, 'okay, you have made some profits but what eventually matters is the AUM of the business, how much customers trust you with their assets'. It is Rs 3.5 lakh crore now."
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“I keep telling the office that there is no status quo in today’s world. Everyone’s going to get disrupted; we just have to stay sharp. There is no other way to build a business," he said.
Zerodha stands out in an area where intensive marketing is standard thanks to its determination to not advertise.
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