For, they have evidence that it might just work, Cognizant, which spent 8-9% more in marketing compared to other big firms such as Infosys and Wipro, added more clients than any other member in the Big Five.
In the past three quarters, Cognizant added 182 clients compared to 138 by TCS, 129 by Infosys, 107 by Wipro IT services and 99 by Satyam Computer Services.
Analysts and company officials attribute it to Cognizant’s higher spend on its sales, general and administrative (SG&A) component, which is the highest among the top five players. Cognizant’s SG&A is in the 23-24% range, which is almost an 8-10% differential investment compared to Wipro or Infosys. Considering that the biggies did not make any big-ticket acquisition during this period, the bulk of the customer addition is organic.
Indications are that others in the top five will improve spending in this segment. In a recent earnings call with analysts, Infosys officials said SG&A investments is one of the levers it would use as its clients go through a period of indecision in the next few months.
At the same time, Satyam CFO Srinivas Vadlamani told ET: “In nascent markets, the objective would be to invest in front end for customer acquisition while in mature markets, we would look to mine customers, especially when we have around 185 Fortune 500 customers. To achieve these objectives, investments would not only be made in front end sales and marketing to strengthen relationship management but also in brand.”
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