Marketing SBI SMS unhappy

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Marketing SBI SMS unhappy

  1. 1. A C A S E S T U D Y O N M A R K E T I N G C A M P A I G N B Y S T A T E B A N K O F I N D I A 19 March 2014Marketing Case Study - SBI's SMS Unhappy SMS Unhappy Prepared by- Chanpreet Singh Sachin Sharma Surabhi Kala Swapnil Soni DoMS, IISc Course- Marketing Management Instructor- Prof. R. Srinivasan
  2. 2. 2 Index  State Bank of India  Evolution  Present  Operations  Indian Banking sector-post liberalization  Mobile Phone Proliferation in India  State Bank of India- campaign  SMS Unhappy  Inception  Launch  Operation  Result 19 March 2014Marketing Case Study - SBI's SMS Unhappy  Response to Questions of Case Study o Critical assessment of the SMS Unhappy program at SBI (SWOT Analysis) o SMS Unhappy contribution to improving retail operation at SBI (AHP) o National Level Implementation- Concerns & Resolutions (Marketing Environment) o SMS Unhappy contribution towards making SBI more competitive (BCG Matrix)  References
  3. 3. 3 State Bank of India- Evolution Bank of Calcutta 1806 Bank of Bombay 1840 Bank of Madras 1843 Imperial Bank of India 1921 Purpose of Bank Keeping Cash Account Loan for Trade Issuance of Cash Notes Role of Imperial Bank Commercial Bank Bankers’ Bank GOVT’s Bank Quasi-central role 1935 Reserve Bank of India was formed Imperial Bank of India turned agent of RBI & Commercial Bank Bank: An establishment authorized by a government to accept deposits, pay interest, clear checks, make loans, act as an intermediary in financial transactions, and provide other financial services to its customers.
  4. 4. 4 19 March 2014Marketing Case Study - SBI's SMS Unhappy State Bank of India- Evolution Capital Base 11.85 Cr Advances 72 Cr Deposits 275 Cr Branches 172 no.s 1947 Imperial Bank of India at the time of Independence 1951 1st Five Year Plan by Prime minister Pt J. L. Nehru Rural development – highest priority Failure of Imperial Bank of India in this agenda 1955 Creation of state partnered bank by taking over Imperial Bank of India State Bank of India Act 1955
  5. 5. 5 19 March 2014Marketing Case Study - SBI's SMS Unhappy State Bank of India- Present Industry Banking, financial services Headquarters Mumbai, India Area served Worldwide Chairman Arundhati Bhattacharya Revenue INR 2,00,560 Crores Profit INR 17,916 Crores Total assets INR 15,66,261 Crores Employees 295,696 Domestic presence International presence 14,816 branches contributed to 88.37% of total profits 180 overseas offices spread over 34 countries Rank Bank Country M cap, US$b, 30/04/2013 1 Industrial & Commercial bank of China (ICBC) China 233.6 3 HSBC Holdings UK 202.4 55 State Bank of India India 28.58 http://www.relbanks.com/worlds-top-banks/market- cap
  6. 6. 6 19 March 2014Marketing Case Study - SBI's SMS Unhappy  Associate banks  State Bank of Bikaner & Jaipur  State Bank of Hyderabad  State Bank of Mysore  State Bank of Patiala  State Bank of Travancore  Non-banking subsidiaries  SBI Capital Markets Ltd  SBI Funds Management Pvt Ltd  SBI Factors & Commercial Services Pvt Ltd  SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)  SBI DFHI Ltd  SBI Life Insurance Company Limited  SBI General Insurance State Bank of India- Operations
  7. 7. 7 Indian Banking sector-post liberalization 19 March 2014Marketing Case Study - SBI's SMS Unhappy 1947 – 1980 Remarkable growth in Indian banking sector 1991 •Import restricted •Export slumped •Gulf war- Oil price soar •Trade deficit •High inflation •Balance of payment crisisSolution? Request for bailout from IMF Pledged 67T Gold with Bank of England Economic Reform- Liberalization Economic Crisis 1991 Rao-Manmohan Plan
  8. 8. 8  Post Liberalization  FDI in Power, Hospitality, Software & Retail  Changed nature of competition in Banking sector  Entry of Private sector commercial Banks 19 March 2014Marketing Case Study - SBI's SMS Unhappy Indian Banking sector-post liberalization Private Banks Established Revenue Business Type 1994 US$ 6.5 bn Banking, Financial Services Public 2008 US$0.7 mn Banking, Financial Services Private 1993 US$ 80 mn Mutual fund Public 1954 US$ 13.52 bn Banking, Financial services Private Competition Capture Market share Customer Satisfaction
  9. 9. 19 March 2014Marketing Case Study - SBI's SMS Unhappy Digression….!
  10. 10. 10 Mobile Phone Proliferation in India  Post Liberalization  1990s -Telecom sector open to FDI  2000-10 decade extreme growth in this sector  Growth rate- 18 million/month 19 March 2014Marketing Case Study - SBI's SMS Unhappy Deregulation Market Competition Population growth Opportunity for Economies of Scale Result: Cheapest Tariff (in the world)
  11. 11. 11 19 March 2014Marketing Case Study - SBI's SMS Unhappy Mobile Phone Proliferation in India
  12. 12. 19 March 2014Marketing Case Study - SBI's SMS Unhappy Mobile & SBI….!
  13. 13. 13 Friday, March 12, 2010 Raja Releases Citizen Moments Book 19 March 2014Marketing Case Study - SBI's SMS Unhappy State Bank of India- campaign Campaign Year & Media coverage Purpose Parivartan 2007 (http://www.thehindubusinessline.in /2007/08/03/stories/200708035221 0600.htm ) •Retain potential human resource •Centralized computerized system •Large & midsize corporation- Treasury, trade finance Citizen SBI 2009 (http://www.business- standard.com/article/finance/sbi- launches-fresh-hr-initiative- 109090200055_1.html) •Attitudinal change and transformation of its employees through a series of human resources activities •Behavioural transformation by seeking more active role from the employees Udaan 2010 (http://epaper.timesofindia.com/Rep ository/getFiles.asp?Style=OliveXLib :LowLevelEntityToPrint_ASCENT&T ype=text/html&Locale=english-skin- custom&Path=CAP/2010/12/03&ID= Pc02215) •Apprising the employees about the outstanding achievements of the bank over the last four years •Grooming them for their total transformation towards achieving the bank's aspirations to be amongst top 25 banks globally Results SBI superseded ICICI in terms of Market capitalization in 2008 SBI entered into Fortune Global 500 Listing
  14. 14. 14 Solution? What’s problem SMS “Unhappy”- Inception 19 March 2014Marketing Case Study - SBI's SMS Unhappy Competition in Market Control the Input Respond to the Output Fiscal & Monetary policies control Customer Satisfaction Issues with conventional SBI system for attainment of “Customer Satisfaction” Complaint Initiation Lack of system awareness among customers Lengthy procedure- high time & energy cost Complaint Resolution Public sector- Red tape & bureaucracy Lack of accountability & transparency Solution for attainment of “Customer Satisfaction” Complaint Initiation Create awareness Easy to use- less time & energy cost Complaint Resolution Automation- speed & accuracy Accountability & transparency
  15. 15. 15  Solution to attainment of highest customer satisfaction  1st time realization by GM Lucknow, UP branch  1st time utilization of Automation in customer complaint resolution  Exploitation of proliferated technology to reach & connect customers  Up gradation of semi-automated system with web-based technology in Bhubaneshwar, Odisha  Finally launch of Fully Automated Customer complaint resolution system in Hyderabad on 11th Dec 2009 19 March 2014Marketing Case Study - SBI's SMS Unhappy SMS “Unhappy ”- Inception SMS <Unhappy> & be Happy
  16. 16. 16 SMS Unhappy- Launch 19 March 2014Marketing Case Study - SBI's SMS Unhappy Mr Siva Kumar at the lauching of SMS “Unhappy” Media Source: http://www.financialexpress.com/news/SBI-launches-SMS-Unhappy-Service/758039
  17. 17. 17 19 March 2014Marketing Case Study - SBI's SMS Unhappy SMS Unhappy- Launch Launch region Andhra Pradesh Regional circles 14 no.s Branches 1100 no.s Customer coverage 14 million
  18. 18. 18 19 March 2014Marketing Case Study - SBI's SMS Unhappy SMS Unhappy- Operations Logical closure & customers’ feedback Expediting the iterative process for solution Real time follow up by Local Head office Concern upload on webpage for branches to attend grievance Executives at Happy Room enquires Account details SMS weblink to Local Head office –Happy Room Unsatisfied sends “Unhappy” to 8008202020
  19. 19. 19 19 March 2014Marketing Case Study - SBI's SMS Unhappy SMS Unhappy- Result SBH Survey conducted by MARS on Customer satisfaction Source: Hindustan Times 29th Mar 2010 Status Complaints per year Prior to program 1600 After program 22,209 Addressed 21,805 (98%) Complaints resolved Timeframe 64 % Within 48 Hrs 11 % Within 3 days 9 % Within 5 days 16 % Within 10 days
  20. 20. C R I T I C A L L Y A S S E S S T H E S M S U N H A P P Y P R O G R A M A T S B I ? W H A T A R E I T S S T R E N G T H S A N D W E A K N E S S E S ? 19 March 2014Marketing Case Study - SBI's SMS Unhappy Question-1
  21. 21. 21 Critical assessment of the SMS Unhappy program at SBI 19 March 2014Marketing Case Study - SBI's SMS Unhappy Strength Weakness SBI’ s brand image & credibility Lack of accountability Huge market share including rural area Inadequacy of efficient mechanism Experienced & dynamic Organogram Red tape & bureaucracy Opportunity Threat Good market response assessed by Pilot program in AP Reputation at stake Expansion of Telecommunication market Frivolous complaints & Unpredicted scalability of complaints & operational challenges Precise market segment- young professionals & students Competitors’ strategy SWOT Analysis
  22. 22. 22 19 March 2014Marketing Case Study - SBI's SMS Unhappy Critical assessment of the SMS Unhappy program at SBI (cont.) Perspective Cost Benefit SBI • IT Infrastructure • Trained personnel • Advertisement • Customer satisfaction • Market share • Green Banking (sustainability) • Real time feedback on operation • Accountability & appraisal system Customer Cost of 1st SMS • Solution resolution within 48 Hrs • Less time & energy cost • Personal touch Cost & Benefit According to Mr Siva Kumar 25% of customers’ angst came down by sending SMS 50% taken care by SBI by call back Hence 75% angst disappeared within few minutes with little effort
  23. 23. C A N S M S U N H A P P Y C O N T R I B U T E T O I M P R O V I N G R E T A I L O P E R A T I O N A T S B I ? H O W W O U L D Y O U U S E T H E P R O G R A M F O R T H I S P U R P O S E ? 19 March 2014Marketing Case Study - SBI's SMS Unhappy Question-2
  24. 24. 24 19 March 2014Marketing Case Study - SBI's SMS Unhappy SMS Unhappy contribution to improving retail operation at SBI Retail Banking Deposits- Savings Account , Current Account, Fixed Deposit, PF Account, Recurring Deposit , Term Deposit SBI Freedom, Money Market , Deposit Certificate, Retirement Savings Plan Loans- Personal, Home, Auto, Medical, Mortgage Loan Value Added Services- Remittances, Internet Banking, Debit Card, Lockers SBI - A brand, a legacy, a name to Bank upon SBI-Largest and oldest retail banking player in India Potential Customer Segment Age group: 28 Yrs (average) Young Professionals & Students Easiest & cheapest way to connect them
  25. 25. 25 19 March 2014Marketing Case Study - SBI's SMS Unhappy Source: http://www.statcrunch.com/grabimageforreport.php? Source: Experian Marketing Services Usage of Mobile Phone Functions Usage of Text message by demography Inferences: •Considerably good %age (20%) of SMS function is used in Mobile •SMS is good source of marketing & feedback Inferences: •Age group 13-17 contributes major (49%) in overall SMS users •Age group 18-34 is 30% contributor that can become potential customer to target for marketing & feedback actions SMS Unhappy contribution to improving retail operation at SBI
  26. 26. 26 19 March 2014Marketing Case Study - SBI's SMS Unhappy SMS Unhappy contribution to improving retail operation at SBI Justification of utility of Mobile Phone SMS option to connect target customer segment Evaluation of Alternatives Step1 SMS Email Letter Time 30 sec 5 min 1 Hr Cost Rs 1.0 0 0 Reliability 2/10 8/10 10/10 Multi-criteria decision making: •AHP (Analytic Hierarchy Process) •Heuristic approach supported by survey data and Satty approach Factor Comparison Step2 Factor Comparison Weightage Time Cost Reliability Eigen Vector Time 1.0 7.0 1.0 45% 3.0 Cost 0.1 1.0 0.1 6% 3.0 Reliability 1.0 9.0 1.0 49% 3.0 2.1 17.0 2.1 1.0 3.0 λmax Size of Matrix n 3 Consistency Index CI 0.0035 Random Consistency Index RI 0.52 Consistency Ratio CR 0.01Since CR<0.1 So No Problem
  27. 27. 27 19 March 2014Marketing Case Study - SBI's SMS Unhappy SMS Unhappy contribution to improving retail operation at SBI Level (of Factors) Comparison Step3 Level (of each Factor) Comparison Time Weightage SMS Email Letter Eigen Vector Actual Weightage SMS 1.0 7.0 9.0 77% 35% Email 0.1 1.0 5.0 17% 8% Letter 0.1 0.2 1.0 5% 2% 1.3 8.2 15.0 100% 45% Cost Weightage SMS Email Letter Eigen Vector Actual Weightage SMS 1.0 0.3 1.0 22% 1% Email 3.0 1.0 1.0 46% 3% Letter 1.0 1.0 1.0 32% 2% 5.0 2.3 3.0 100% 6% Reliability Weightage SMS Email Letter Eigen Vector Actual Weightage SMS 1.0 0.3 0.1 9% 4% Email 3.0 1.0 0.3 24% 12% Letter 7.0 3.0 1.0 67% 33% 11.0 4.3 1.5 100% 49% RESULT SMS Email Letter Time 35% 8% 2% Cost 1% 3% 2% Reliability 4% 12% 33% 40% 22% 37% Recommendation 1st 3rd 2nd Mobile SMS seems to be relatively best option to target customer base for Retail Banking
  28. 28. W H A T M A Y B E T H E K E Y C O N C E R N S W I T H R E G A R D T O T H E N A T I O N A L R O L L O U T O F T H E P R O G R A M ? H O W S H O U L D T H E M A N A G E M E N T A T S B I A D D R E S S T H E S E C O N C E R N S ? 19 March 2014Marketing Case Study - SBI's SMS Unhappy Question-3
  29. 29. 29 National Level Implementation- Concerns & Resolutions 19 March 2014Marketing Case Study - SBI's SMS Unhappy Marketing Environment GDP & Per capita income- public savings Private Banks- customer service Fiscal & Monetary Policy- interest rate Banking infrastructure- Building & location Telecommunication- Internet, Mobile & SMS services Access & connection- Promotional medium to be regional Profession & Age- Target customers Customers’ faith & asset security- “Banker to Every Indian” Source: Prof R Srinivasan, IISc
  30. 30. 30 Key Concern Resolution Pre-implementation Return on Investment Accountability & Measurement of cost, complaint resolution and customer retention Skilled Human resource availability Training programs Demographic challenge- Language & culture Multilingual campaign region wise Post-implementation Exponential growth in complaints Prediction & estimation of customer volume region wise and monitoring Surge in frivolous complaints Real time evaluation & closure Competitors’ strategy Continuous feedback & up-gradation Complaint management & accountability Regional limited complaint receipt 19 March 2014Marketing Case Study - SBI's SMS Unhappy National Level Implementation- Concerns & Resolutions Source: http://www.business-standard.com/article/press-releases/sbi-launches-sms-unhappy-scheme-111032100061_1.html
  31. 31. H O W W O U L D Y O U A S S E S S W H E T H E R S M S U N H A P P Y C O N T R I B U T E S T O W A R D S M A K I N G S B I M O R E C O M P E T I T I V E A G A I N S T I T S P R I V A T E S E C T O R R I V A L S ? 19 March 2014Marketing Case Study - SBI's SMS Unhappy Question-4
  32. 32. 32 SMS Unhappy contribution towards making SBI more competitive 19 March 2014Marketing Case Study - SBI's SMS Unhappy Source: Prof R Srinivasan, IISc 1 SMS 30 Seconds Comfortable Convenience Reduced Hidden Value delivered to SBI customer : “TRUST”
  33. 33. 33 19 March 2014Marketing Case Study - SBI's SMS Unhappy SBI’s Market diversity Portfolio in India SMS Unhappy contribution towards making SBI more competitive Source: Wikinvest Market Share of Banks in India (as on 2008) 10% 20% 1X10X 0.1X Boston Consulting Group Growth–share Matrix 2007 2013
  34. 34. 34 19 March 2014Marketing Case Study - SBI's SMS Unhappy Month-1 Matrices Unit Region-1 Region-2 Customer Base weightage % X % Y% Customers' Complaint received by Happy Room No.s A A Customers' Complaint resolved No.s B B Number of Transaction made by concerned customers after complaint resolution No.s C C Failure Rate Index F1= (A-B)/A F2= (A-B)/A Success Rate Index S1= C/B S2= C/B Consolidated Measure Failure Rate X*F1 + Y*F2 Success Rate X*S1 + Y*S2 SMS Unhappy contribution towards making SBI more competitive Measurement of Effectiveness of SMS Unhappy (Proposed) Periodical assessment on Success & Failure Rate would provide the real time feedback to measure Return on Investment of SMS Unhappy
  35. 35. 35 19 March 2014Marketing Case Study - SBI's SMS Unhappy Websites  www.google.co.in  www.wikipedia.com  www.isb.edu  www.sbi.co.in  www.financialexpress.com  www.rbi.org.in  www.trai.co.in Books  Strategic Management By Prof. R. Srinivasan  Marketing Management By Philip Kotler Tools used  Microsoft Encarta (Encyclopedia for offline references)  Microsoft Excel (for data analysis & graphs) References
  36. 36. 36 SBI SMS Unhappy Survey Time 19 March 2014Marketing Case Study - SBI's SMS Unhappy
  37. 37. 19 March 2014Marketing Case Study - SBI's SMS Unhappy Thank you! Take Away…. • SBI IISc Branch is soon going to put poster to campaign “SMS Unhappy” • Our “Mobile Number Update” related concern resolved • Surveyed SBI customers got informed used “SMS Unhappy” For you:

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