Byju’s and the art of the deal: Inside a one hour pitch

What an audio recording of a typical sales pitch made by Byju’s tells us about the company’s ambition and its tactics to get there

The room has six people. One salesperson from Byju’s. One junior trainee. Two parents. One little girl. On the audio recording, you can hear the salesperson asking her a question:

“What’s your name, beta?”

“Anushka*”

“Very good, Anushka. What class are you in?”

“6th Standard. D Section.”

“What do you want to become when you grow up, Anushka?”

Long pause. Hesitation. Then you finally hear her say it. Tentatively.

“I want to become a doctor.”

We published a story today about how Byju’s products are sold by aggressive sales executives, to gullible parents who often either don’t know or don’t register that they are not just buying a tablet for their child, but signing up for a third-party loan.

It’s a story that took us weeks to investigate, report, and publish. Six reporters were involved. 110 complaints were analysed across 14 sources. Calls were made. Spreadsheets created. We even spoke with 10 current and former Byju’s business development associates — BDAs, or counsellors, as the company usually calls them, to understand how a sale is made, what rules are bent, and what’s broken.

It all begins with the pitch. Basically, a Byju’s pitch can be broken into three distinct phases: quizzing the child, counselling the parent, and making the sale.

Over the next hour, through a mixture of counselling, banter, persuasion, and some mild fear-mongering, the Byju’s BDA will get Anushka’s parents to part with nearly 1.2 lakhs for a 7-year paid subscription for their learning product. Paid fully upfront.

Let’s see how.

First, he gives her a test. He loads a few questions on his tablet and tells her she has four minutes to solve all of them. She finishes it in two minutes. He’s impressed. You can hear it in his voice, as he addresses her parents.

“We want students to understand that time is important. They can’t take all the time they need”

This isn’t new. Byju’s is subtly creating an impression of learning, when it’s actually training children for test-taking. Something we wrote about extensively in our story, Why edtech won’t take the dipstick test

“Underneath the slick editing and 3D visuals, claim education experts, sits the tired and tested DNA of exam prep coaching. An emulation of the Korean or Chinese model of learning — getting to perfection through incessant test-taking. The other inspiration for Byju’s seems to be the Finnish, who top the Programme for International Student Assessment (PISA) rankings every year and focus on learning through exploration.”

Meanwhile, the BDA presses on with Anushka.

What do you like to do in your free time.

I like arts.

What kind of arts?

I go online, to Google, and try to find how to do things, she says.

The mother interjects at this point to say that her daughter is sharp, despite being average in class. She complains that she has no time to teach her child. And the father comes home late. So they have no choice but to send her to tuition classes.

The BDA latches on to this. And uses it as an opportunity to talk about the product.

“Byju’s will make the base strong. We use videos to teach. Animations. So that children like it, and don’t get distracted. You don’t even need school or teachers, where nobody gives any attention to your daughter. Our way is customised. For you.”

That’s basically Byju’s product pitch in a nutshell: School is useless. Children get distracted easily, so we use videos and animation. It’s customised. For you.

Never mind that all these claims are suspect, as we wrote in multiple earlierstories.

But it seems to work. The parents are interested.

Then the Byju’s BDA goes to the next step.

He gives Anushka another question. There are 11 pencils which need to be put into boxes. Each box can take two pencils. How many boxes do we need?

There’s prolonged silence on the audio. Presumably, she’s working it out.

Fractions are scary.

This is part of a plan. That’s what a former BDA of Byju’s told us:

“We’re even trained to ask a particular set of questions, which we know are difficult for the student to answer. For instance, fractions are a huge problem area for students. So we might model a quiz on that.”

More questions follow. The salesperson then asks Anushka if the television in the room is square or rectangle.

“From the minute I walked into a pitch meeting, my job was to determine the spending capacity of these potential customers. From the make of the TV to the parents’ job profiles, I’d use every bit of information to position my pitch.”

Finally, the BDA dismisses Anushka. After she leaves, he turns his attention to the parents. Some small talk happens. He asks where they are from. Anushka’s mother mentions Kolkata. He mentions that his mother is also from Kolkata as well. They talk about the localities there, exchanging references about the city.

He goes into the details about Byju’s, about their philosophy, and how they see learning. He makes it a point to mention that Google is useless and a waste of time. Then he talks about Anushka.

She’s a smart girl. But you see how long it took her to answer some questions. She needs some guidance. And it’s best to start now. Else her marks may drop, and she may have to take Humanities or Commerce. Which would be a shame since Anushka wants to become a doctor.

Each pitch is different. Each pitch is well-coordinated. But there are two key messages in all of them. 1. You need to be a responsible parent. Give her time and attention. 2. You need to act now. And early.

More talk about Byju’s. About the educational system. How everything sucks.

Finally, comes the sale. There are two products, he says. One up to class 10. The other up to class 12. He quotes the prices. He mentions that it’s discounted from the list price, and mentions a scholarship. This is to make parents believe their child has been “selected” out of a huge group.

The parents demur. The father asks him, ‘What do you suggest?’

The class 12 product, he says. Best price and value for money. It’s a 7-year subscription.

Hmm.

Do you have a credit card, he asks the father.

The father says he does, but he’s not sure about the limit.

No problem, the BDA smoothly says, we can do an electronic clearing service (ECS). It’s an instrument that directly debits money from the bank account after a one-time authorisation.

Perhaps you are confused. This is what is happening. Byju’s is financing a loan for the parents. Financed by third-parties like Capital Float and Bajaj Finserv, these loans need to be paid back in monthly instalments over the next 12–14 months.

In nearly 50% of the cases The Ken investigated, the parents had no idea they were taking out a loan.

“It’s our job to sell. We never use words like ‘loans’ or ‘outstanding payments’,” says a current Byju’s sales agent. Loan payments were referred to only as EMIs (equated monthly installments), and the involvement of a third-party lender, such as Capital Float or Avanse, was never explicitly mentioned. “We realised that once parents understood there was a third-party loan provider to the agreement, the sale would become difficult.”

He takes the Aadhaar and PAN copies of the parents. And assures the parents that he will be in touch, and that they can call him anytime to discuss the child’s progress. They can always come to the Byju’s office as well. He mentions the mentorship feature. And how she will get personal attention.

They are the lucky ones. Other parents are told by Byju’s BDAs that they have a trial period, and they can cancel anytime. Sometimes it’s 15 days. Sometimes 20 days. Sometimes just a week. It depends on the BDA. It doesn’t matter though, because parents report that their cancellation requests are not honoured. And before they know it, money is debited from their account every month.

Which is one of the biggest reasons why there are so many complaints online. Our story is about what these parents go through, how these loans are disbursed, and the role of finance companies like Zest Money, Bajaj Finserv and others, who see massive default rates. It’s about Byju’s growth strategies, its sell-at-any-cost-tactics and incentives, and the making of a loan crisis. Running over 5000 words, it features multiple infographics, screenshots and includes responses from Byju’s itself. You should read it. And decide for yourself what it means.

Meanwhile, right at the end of the recording, Anushka’s BDA mentions that he’s getting a promotion.

No more field work, he says.

He’s now a manager.

*All names have been changed to protect identity

To see all stories published by The Ken about Byju’s, you can read the entire narrative