Byju’s faces uphill sales battle

Edtech major’s recent shift to a sales revenue-driven salary model has raised concerns about its viability in a fiercely competitive market

Cash-strapped Byju’s faces a disconcerting dilemma as the company’s sales figures show no signs of improvement, according to people in the know.

This comes after the edtech major transitioned to a sales revenue-driven salary model, which raises concerns about Byju’s financial viability and the e£ectiveness of its sales strategies in the competitive edtech market. It is also to be noted that April to June is the peak sales quarter for test prep companies.

“Many of us have not been able to convert leads to sales, as some of these leads have been in the system for too long and old now,” said one the sources.

While another person close to the development said that sta£ are resigning due to low morale and salary being linked to generated sales.

“Some teams were told last week that there won’t be any further layo£s. But teams have already lost all faith in the management. Many people are resigning everyday across all teams,” said a Byju’s employee who works for the content team.

A detailed questionnaire sent to Byju’s did not elicit any response.

NEW SALES INITIATIVE

In a bid to acquire more learners, it has significantly reduced the prices of its products. The annual subscription fee for the Byju’s Learning App now stands at ₹12,000 (inclusive of taxes) per year, while Byju’s classes and Byju’s Tuition Centres (BTC) are priced at ₹24,000 and ₹36,000, respectively, for a full year of classes, according to the sources.

In a candid meeting with over 1,500 sales associates and managers, Founder Byju Raveendran emphasised on sustainable and scalable model with empathetic selling approach to revive revenues. This stands in stark contrast to Byju’s in the last counsel. You just have to guide the students and parents who are already inclined towards the transformative learning that Byju’s o£ers. You are not sales people; you are education counsellors, empowering students to become better learners” he said.

In the new model, managers will have a role of a mentor and not of task masters. Employees are encouraged to report any ill-treatment, forced-sales or rude behaviour of managers directly to Raveendran.

NEW POLICY

Byju’s has implemented a new policy linking sales sta£ ’s salaries to the revenue they generate every week. According to a copy of an internal document, it has rolled out a new policy wherein the salaries of the sales sta£ are directly linked to the revenues they generate every week, amid the struggles that the edtech major is facing with a severe cash crunch and to cover the payroll of its employees. The policy, introduced on April 24, would be applicable for four weeks, to May 21, 2024.

In the meeting, Raveendran highlighted the sustainable and scalable nature of this sales model, inviting associates to expand their teams by inviting friends to sell and act as their managers. He envisioned a 50,000-strong sales force within the next year, demonstrating its ambition and commitment to growth.

In a relief to employees, it has paid full salaries for April to all the sta£, except the sales force, whose earnings are dependent on the revenue they generate every week. Byju’s now has about 12,000 employees.

The delay stems from funds raised through a recent rights issue, which have been locked in a separate account due to the ongoing dispute with the investors. The total salary burn for the company ranges between ₹40 crore and ₹50 crore, according to sources.