BANKINGUnderstanding the Loyalty Programs in Banking

Presented By:

Dheeraj Meshram Kinnar Majithia Akankasha Sharma

(P1053) Nishad Banodkar Nirav Doshi Ebrahim Noorani

Contents

Structure of Loyalty Programs

Reasons Behind Structure

Program Execution Benefits Challenges Faced Promotional Activities Budget Database Marketing Customer Feedback

STRUCTURE OF LOYALTY PROGRAM

SBI FreedomRewardz (Debit

Card Plan)

HDFC Divided into 3 Programs

1. Classic2. Preferred RM3. Imperia

‘FreedomRewardz’ BY SBI

Customers are rewarded points for using the SBI Debit card

All State Bank Group Debit-card holders are pre-enrolled into FreedomRewardz, on individual basis

2.5 points provided for every ` 100 purchase using the debit card

Additional points for using the card at SBI’s partner outlets

Special promotions during holidays and festivals

‘FreedomRewardz’ BY SBI

Points can be redeemed till 36 months from the time they are accrued after which they expire

Points can be redeemed for Gifts, merchandises and services in the domains of: Personalized products Airline tickets, Bus tickets Movie tickets Entertainment products, Electronic items Family, Home, Fashion & Beauty products Music and Sports products Limited-time Seasonal Rewards

SBI FreedomRewardz Partners

LOYALTY PROGRAMS AT HDFC BANK

HDFC bank has 3 distinguished loyalty programs for customers based on the balance in their CASA account

Classic banking (min. ` 1 Lac) Preferred Banking (min. ` 2 Lac) Imperia Banking (min. ` 5 Lac)

HDFC BANK CLASSIC BANKINGHIGHLIGHTS:

Free EasyShop Gold Debit card

50% waiver on annual locker rental rates

Annual waiver of `25 on Utility BillPay

Improvement of 5 paise over the day’s rate for Forex transactions

HDFC BANK PREFERRED BANKINGHIGHLIGHTS:

Dedicated Relationship Manager

Customized Investment Solutions

Relationship pricing – Credit card, Loans, Securities Trading account

No charges on NEFT and RTGS transactions, Free ‘At Par’ cheque books

Multiple Demat accounts free of charge

Waiver of up to `2000 on service charges like Duplicate statement, DD cancellation etc.

HDFC BANK IMPERIA BANKINGHIGHLIGHTS:

Imperia client Relationship Manager/Private banking advisor

In-house research-backed investment advice

Exclusive Imperia Phone-Banking Service

Loans, Gold bars at preferential rates, hassle-free foreign remittances

Free combined monthly statements of Savings, Current and Fixed Deposit accounts

HDFC Loyalty Program Partners

REASONS BEHIND STRUCTURE

SBI “FreedomRewardz is an exclusive loyalty program

initiated by State Bank Group for its debit card holders to reward them with points accumulated over transactions and redeeming the same for a wide range of consumer products.”

HDFC Based bank balance kept by customer with the

bank Program Name Balance

Required in CASA Account

(Rs.)Classic 1,00,000

Preferred RM 2,00,000

Imperia 5,00,000

PROGRAM EXECUTION

SBI Every new SBI customer is made aware

of the scheme All State Bank Group Debit Card holders

are pre-enrolled into FreedomRewardz, on an individual basis,

Existing regular customers (without debit card) are tapped

HDFC Monitor the balance of the customer

over the quarter If criteria satisfied, call customer and

brief about the program Old loyalty program customers refer new

customers, pitch the same program

BENEFITS

SBI Customer Retention Increased business

opportunity HDFC

Business growth Retains old customers Word- of-Mouth publicity

CHALLENGES FACED

SBI Creating awareness is difficult

due to a huge customer base Difficult to train illiterate

customers Changing habits: shift from

traditional cash withdrawals to Debit Card use

Unable to make customers aware of the security provided by them

Negotiating and maintaining relationship with retail partners

CHALLENGES FACED

HDFC New customer asks for

customization Imperia customers may ask for

certain customized financial services

Keeping service charges down to make the program viable

Extra staff employed, dedicated relationship manager

Costs incurred by bank to reimburse RM’s travel expenses

Negotiate and maintain relationship with retail partners

Q7 Ans

PROMOTIONAL ACTIVITIES

SBI Dedicated site for

Freedom Rewardz

HDFC Quarterly Events Seminars/ Workshop Get-togethers Donations to CRY, other NGOs

BUDGET

Operating Expenses (for the period April’09 to March’10)

SBI 20318,68,00 (in ‘000 Rs.)

HDFC 57,644,827 (in ‘000 Rs.)

DATABASE MARKETING

SBI None identified

HDFC Email Marketing Sending free gift vouchers

CUSTOMER FEEDBACK

SBI

HDFC

THANK YOU!!!