Monday, February 18, 2008

Barclaycard : You Are in Control

Brand : Barclaycard
Company : Barclays
Agency : Mccann

Brand Analysis Count : 310

When I was a college student, my dream was to flaunt a credit card ( infact more than one) . Then on to my first job, I ran to my bank to rightfully claim for my first creditcard. I was in for an unpleasant surprise. I then realized that not everyone was eligible for one. Then after three years of constant followup and lots and lots of document, I landed up my first credit card ( not exactly because later I found out that it was a chargecard). It was a Cancard with a credit facility for Rs 5000 and credit period of 30 days.

Then after two years, something happened. I would call it the financial sales revolution. The new generation banks like ICICI and HDFC bank began appointing Direct Selling Agents for opening the Savings Account, loans and creditcards. For the first time, customers ( like me) were treated like worthy of a credit card. I remember filling out numerous forms and getting rejected by Citi and ICICI . Infact I remember a bank official saying that they rejected my application because I work with a media. At that time they don't give loans or creditcard to Media or Police officials .

When I was running around after creditcards, wise-owls warned me of impending danger. They said - credit cards can ruin your financial stability so use it wisely. I vouched that I will not take credit for my creditcard and use it wisely. But the fact is that I have taken loans, I have splurged, have bought products on EMI all through creditcard.... I realized that you will never win against the creditcards.
As always the thumbrule in any financial service dealings involving banks or insurance firms is to play by the rules. That is critical in the case of creditcard business. The fact is that only they know the rules and as customers , we don't bother to read the 60 page terms and conditions booklet that is printed in 5 point font size.
I realized this when the creditcard charged me fine and interest for late realization of a cheque owing to a bank strike. I tried to fight but they showed me the rules.
It is in this context that a new bank has comeout with a credit card that says that the customer is in control...
In 2007 Barclays Bank launched its retail banking operations in India. Barclays is the UK based financial services group which boasts of a heritage of over 300 years. The operations of Barclays started in India in 1970's and was more focused on investment banking . Barclays began the commercial operations in 2006 and retail operations in 2007.

The bank is now aggressively pitching for its creditcard business in India. According to Businessweek , the size of Indian Credit-card market is about $4 Billion and growing at 35% per-annum. No wonder global majors are queuing up in the Indian market. But the going is tough because competition is tough with ICICI bank leading the pack.

Barclaycard chose to break into this market with a clear differentiator . The differentiator was ' giving power to choose the billing cycle and fix monthly payment amount ' to the customer. The brand is now running a high decibel campaign in all media

Watch the TVC here : Barclays
Here the idea is that banks treat customers like kids with little or no power in the hand of the customers.
As a customer, I think that this differentiator comes from consumer insights. Infact in my case I have to pay my credit card during the middle of the month and by that time all money would have gone up in smoke. Barclaycard lets you decide which week of the month the customer would like to be billed. That means that the customer can select the appropriate week when his salary is being credited or when he has the maximum cash-flow.

The brand in that way has come up with a meaningful differentiator but I think that differentiator is not sustainable in the longterm since all other players can easily achieve parity with that feature . But the brand has made its presence felt using that meaningful differentiator.

For any new bank, the issue of payment of creditcard bills also act as a significant demotivator for the customers. In the case of Barclaycard, the brand has tiedup with BILLDESK so that the payment can be done online using internet banking of other banks. So one does not have to search for the drop-boxes. For a new brand to break into the clutter, Barclaycard has done the homework right and has made the right moves.

Apart from these differentiators, the other things remain the same, the interest rate is as high as 36% ( annualized) and charges comparable with other players .

As a customer, I have learned a hard lesson of using a credit-card. I still don't understand why these cards charge so much interest on the cards and still want customers to use it. I somewhere read that credit-card companies lose money when the customers pay in time. But these heavy interest rates are charged to make customers pay in time. ( is it not a paradox ?).

Credit-card firms will realize their next path to growth only if they rationalize their interest rate in favor of the customers. In this era of sophisticated CRM algorithms, the banks should be able to give differential interest rates to customers who are credit worthy. Till that time I am gonna pay my bills on time.


4 comments:

  1. Anonymous11:55 AM

    i have seen your web page its interesting and informative.
    I really like the content you provide in the web page.
    But you can do more with your web page spice up your page, don't stop providing the simple page you can provide more features like forums, polls, CMS,contact forms and many more features.
    Convert your blog "yourname.blogspot.com" to www.yourname.com completely free.
    free Blog services provide only simple blogs but we can provide free website for you where you can provide multiple services or features rather than only simple blog.
    Become proud owner of the own site and have your presence in the cyber space.
    we provide you free website+ free web hosting + list of your choice of scripts like(blog scripts,CMS scripts, forums scripts and may scripts) all the above services are absolutely free.
    The list of services we provide are

    1. Complete free services no hidden cost
    2. Free websites like www.YourName.com
    3. Multiple free websites also provided
    4. Free webspace of1000 Mb / 1 Gb
    5. Unlimited email ids for your website like (info@yoursite.com, contact@yoursite.com)
    6. PHP 4.x
    7. MYSQL (Unlimited databases)
    8. Unlimited Bandwidth
    9. Hundreds of Free scripts to install in your website (like Blog scripts, Forum scripts and many CMS scripts)
    10. We install extra scripts on request
    11. Hundreds of free templates to select
    12. Technical support by email

    Please visit our website for more details www.HyperWebEnable.com and www.HyperWebEnable.com/freewebsite.php

    Please contact us for more information.


    Sincerely,

    HyperWebEnable team
    info@HyperWebEnable.com

    ReplyDelete
  2. Hi Harish

    The blog is really a knowledge base for all the marketing students and people involved into advertisement.

    Great Work....Keep Posting.

    Regards
    Prothium K P

    ReplyDelete
  3. Anonymous5:16 PM

    the article has given an insight of credit card buss in 2day's era. but sir , u less u had explained the entire thing only , i was able to make sense of the ad. Don't u feel tat the ad is bit eccentric n misleading too ? Did it in anyway help in increasing the brand-Barclay card's awareness.

    Anchal

    ReplyDelete
  4. "we don't bother to read the 60 page terms and conditions booklet that is printed in 5 point font size." -This is very true . I was asked to pay Rs 500 as a fine for not paying on time even though i had tried my best in arguing with the customer care people.The new system which enables the customer to choose the cycle of payment is an awesome step to hit the target

    ReplyDelete

Your Views are Important. Please share your views as comments.