Venki Mba

Information of HDFC HDFC Limited (HDFC) today announced the partial divestment of its stake in Intelenet Global Services Limited (Intelenet) in favour of Barclays Bank plc (Barclays). With the completion of this deal, Barclays will hold 50% stake in Intelenet, the BPO arm of HDFC. The 50% stake in Intelenet is agreed to be sold to Barclays for Rs.164 Crores. The sale is subject to regulatory approvals. Commenting on the deal, Mr. Deepak Parekh, Chairman, HDFC said, "We were amongst the early entrants in this industry vertical and we intend to be a long term player in the BPO space. Barclays was looking for an opportunity to acquire an established business platform with some immediate capacity and access to experienced staff. This opportunity arose and they decided it was an attractive alternative to expanding their existing outsourced operations and wanted to be involved in this fast growing and emerging industry and was looking for a strategic investment opportunity in an appropriate BPO company in India. They also wanted to leverage such a company to realise their off shoring objectives. We were seeking a partner with similar objectives. We believe that Barclays would be the right partner in terms of the culture, strategic intent and approach to business. Barclays will bring in significant expertise in the area of international financial services, which, we believe will augment Intelenet's delivery capability in this domain and will fuel growth." HDFC with FY 03-04 revenues of US$680 million is India's premier housing finance company with an asset base of over US$ 7.5 billion and over 175 branch offices across the country. Barclays is a leading UK based financial services conglomerate operating in over 60 countries. The group with nearly 75,000 employees recorded revenues of GBP 3.9 billion (US$ 6.93 billion) in FY 2003. Intelenet is amongst the leading BPO companies in the country and offers a wide range of BPO solutions and services. It has over 4300 employees and 19 clients. Over the last four years Intelenet has developed a strong management team and is run by professionals with appropriate skills, qualification and experience. The capabilities required to offer BPO services reside within Intelenet including expertise on consulting, operations, technology and infrastructure management. The current management team will continue to run the day-to-day operations of the company and Susir Kumar will continue as the CEO of the company. For the last financial year, Intelenet had revenues of Rs. 1.17 billion (US $ 25 million). The company had operating profit of Rs. 266 million (US$ 5.78

million) and net profit of Rs. 108 million (US$ 2.3 million). The financials of the company is expected to significantly grow in the next financial year.

Marketing Strategy on HDFC bank FROM doing cross-selling exercises to organising school-level painting competitions, promotional activities are going to be the main focus of HDFC Bank's marketing strategy this year.

Mr Ajay Kelkar, Vice-President and Head, Marketing, HDFC Bank, said, "We are looking at positioning HDFC as a one-stop financial supermarket and the objective of the promos is not just acquisition of new customers, but we are also looking at creating product awareness, enhancing usage and also providing value-adds to our customers to reward them for their faith and loyalty." The first promo this year is titled Wheels Of Fortune, which will be on during the month of January. "This promo is targeted at all those customers who avail a personal loan, car or two-wheeler loan. There will be a lucky draw at the end of the promo and the winners would get exotic prizes." HDFC Bank as the best bank in the country. On the opposite side, would be an advertorial which would talk about HDFC as a `one-stop financial supermarket'. "These copies would be circulated among top corporates and our high-profile customers," said Mr Kelkar. He said that below-the-line promotions constitute a major part of the bank's overall marketing plans this year, and therefore, a large percentage of the marketing budget is allocated to promos. "These promotions are conducted based on the results thrown up by data analysis and data mining. Therefore, they are intended to have maximum impact on our target audience."

HDFC Bank plans marketing drive in smaller towns HDFC Bank has launched neighbourhood marketing initiatives in tier-two cities and towns to create awareness about its various products and services. Mr Ajay Kelkar, Head, Marketing, HDFC Bank, said that these initiatives are especially targeted at those consumers who are not aware about the bank's various valueadded services such as direct banking facilities. "We are going to demonstrate the advantages of net banking and mobile banking, as these concepts are relatively new to people living in smaller towns and cities,"

The bank has also launched another initiative called Business Ki Baten, which is targeted at areas where the bulk of the population comprises small businessmen. the bank would get experts to talk on a number of issues such as value-add tax and sales tax.

It has been successful in reducing its customer attrition by almost 15-20 per cent ever since its data-led customer analysis system, Unica, was set up last year. "It enables us to measure the efficacy of the campaigns, test every campaign at each and every step, experiment with creatives and media. There are learnings that can immediately be incorporated into the next campaigns. These campaigns provide us with information about customer preferences that can be used for mass media communication, making it more effective." "We can measure the result of a campaign through the sales that they generate and the customers that are added. There is a clear return on investment, which from a functional point of view gives the team a stronger voice. We have also been able to reduce our ad spends by about 10-15 per cent and have also reduced the cost of acquisition," he added. "We plan to invest close to Rs 12 crore to create the environment that is required to support customer intelligence that leads to databased marketing."

How one Indian Bank is fending off global competition with detailed customer analysis and lifecycle relationship programmes. The first time I spoke to Ajay Kelkar, VP of Marketing for one of India’s largest banks, the soundtrack of Mumbai traffic was unmistakable. Having just returned from three weeks in India I know that driving there is a game of 'chicken come dodgem cars; the only rule being sound your horn and don’t stop – even to turn across traffic! So we agree on a less dangerous time to talk about his customer analysis improvements. The next call is peaceful, demonstrating the contrasts and extremes of Indian life. I am keen to understand what his bank’s customer strategy is. With a population of over one billion, ranging from the highly educated to an illiteracy rate of over 50%, is it a push for customer acquisition and market penetration? Not a bit of it, HDFC wants to make its mark as one of the best companies in India, and has won awards for both that and for being the top bank in Asia. They want to acquire, develop and keep the A- B professional socio- economic groups who are fiercely courted by a range of national and foreign banks. Having experienced the high levels of service in India, I realize that aiming to be the best company there is no mean feat and, if it can be achieved, will give HDFC a strong competitive edge in the global banking market.

HDFC set out 2 years ago to develop intimate knowledge of their customers’ and their behaviour in order to plan lifecycle relationship programmes. They want to understand and make the most of every step, of every customer’s 'journey', from acquisition to winback, across every product line – eg savings, credit cards, investments, loans. In those 2 years they have gone from 4 communication campaigns to 700 customer contact programmes a year. The focus of the programmes is still individual products, a realistic and politically expedient approach given the bank’s product unit structure. Ajay He passes on two tips to other managers facing the same challenges:1. Experiment with 'shoe string and sticking plaster' IT support, until you are sure of your requirements. HDFC experimented for 18 months before they bought Unica. If they hadn’t they would have ended up automating the wrong processes – "and that," he says, "would have been a disaster." 2. Get the CFO on board with the ROI of CRM. Ajay spends a lot of time with the CFO showing him results and getting agreement to the ROI measurements. The value of the customer portfolio has been one of his most important and convincing measures. The next task for the bank is to establish their customer commitment, and understand their loyalty segments. For this behavioural data analysis will not be enough, and they are planning to fuse it together with market research data on values and attitudes – an approach far more companies should take.