This document summarizes loyalty programs offered by two major banks in India - State Bank of India (SBI) and HDFC Bank. SBI offers the FreedomRewardz program which provides points for debit card purchases that can be redeemed for gifts. HDFC Bank has three loyalty programs called Classic, Preferred RM, and Imperia based on minimum bank balance amounts. The programs offer benefits like fee waivers and dedicated relationship managers. Both banks aim to increase customer retention and business through these loyalty programs, but face challenges in customer awareness, costs, and customization.

1. BANKING
Understanding the Loyalty Programs in
Banking

2. Presented By:
 Dheeraj Meshram
 Kinnar Majithia
 Akankasha Sharma
(P1053)
 Nishad Banodkar
 Nirav Doshi
 Ebrahim Noorani

3. Contents
 Structure of Loyalty
Programs
 Reasons Behind
Structure
 Program Execution
 Benefits
 Challenges Faced
 Promotional Activities
 Budget
 Database Marketing

4. STRUCTURE OF LOYALTY
PROGRAM
 SBI
 FreedomRewardz (Debit
Card Plan)
 HDFC
 Divided into 3 Programs
1. Classic
2. Preferred RM
3. Imperia

5. „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

6. „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

7. SBI FreedomRewardz Partners

8. 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)

9. HDFC BANK CLASSIC
BANKING
HIGHLIGHTS:
 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

10. HDFC BANK PREFERRED
BANKING
HIGHLIGHTS:
 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

11. HDFC BANK IMPERIA
BANKING
HIGHLIGHTS:
 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

12. HDFC Loyalty Program
Partners

13. 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

14. 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

15. BENEFITS
 SBI
 Customer Retention
 Increased business opportunity
 HDFC
 Business growth
 Retains old customers
 Word- of-Mouth publicity

16. 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

17. 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

18. Q7 Ans

19. PROMOTIONAL ACTIVITIES
 SBI  HDFC
 Dedicated
site for  QuarterlyEvents
Freedom Rewardz  Seminars/ Workshop
 Get-togethers
 Donations to CRY, other NGO

20. 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.)

21. DATABASE MARKETING
 SBI
 None identified
 HDFC
 EmailMarketing
 Sending free gift vouchers

22. CUSTOMER FEEDBACK
 SBI
 HDFC

23. THANK
YOU!!!