New generation private sector banks are reworking their marketing strategy following the formulation of the new fair practice code by the Indian Banks' Association for all credit-card issuing banks.
The proposed restrictions on tele-marketing by the IBA are forcing banks to shift focus to direct mailers and feet-on-the-street direct marketing.
"Direct mailers now account for about five per cent of the total-marketing pie. This will rise to 20 per cent following the restrictions on tele-marketing," said ICICI Bank joint general manager, retail asset products group, Madhivanan B.
At present, direct mailers are restricted only to high-end customers.
The share of tele-marketing in selling retail products could come down to around 10 per cent from the current level of 20 per cent.
"Marketing of retail products through direct sales agents will increase substantially," said a senior bank official from a private sector bank.
ICICI Bank is designing its back-end operations to enable customers to register in a 'do-not call' list. "By mid-April, the bank will give its customers the option to register for this facility on its web site. Once this is done, they will not receive any marketing calls," said Madhivanan B.
This list will be passed on to the bank's direct sales agents to ensure that they follow the guidelines. In case, the agent call the customers ignoring the norms, he would be penalised, which would affect the agent's stream of revenue.
Normally, a direct sales agent gets Rs 550-600 for each customer acquisition.
"There is a perception that customers do not want to receive marketing calls. Hence, banks will have to opt for other marketing strategies to tap the customer," said IDBI Bank managing director Nageshwar Rao.
He suggested that banks would now have to resort to direct mailers and direct sales agents to market their products.
Private banks like ICICI Bank, HDFC Bank and foreign banks led by Citibank, ABN Amro and HSBC are most aggressive when it comes to tele-marketing.
It is also quite a large source of employment. The tele-marketing and field staff put together employs 15,000-20,000 young people.
"There will be some reshuffle in the manpower," said a senior bank official from a private sector bank. "Tele-agents will now have to go out in the field and market products," he added.
According to IBA, around 40-50 per cent of new credit cards issuance (about three lakh cards a month) and up to 25 per cent of retail loans are sold through tele-marketing. Bankers said tele-sales are at least 40-50 per cent more economical than other sales options.
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