Banking on new schemes to win clients
Local banks find it's no longer enough simply to rely on age-old services as competition intensifies
Traditional banking services are currently not enough for banks to attract customers amid intensified competition in the industry, and many banks launched marketing gimmicks to draw customers' attention in 2006.
Customers now can download music from the bank websites and join concerts or movies for free. Other financial institutions attract customers by giving them expensive grand prizes.
Among other marketing schemes, smaller business operators in the provinces now can apply for loans or other financial services directly from the president of a large bank who will be leading a team of executives into their areas.
To keep customers with them, banks are competing by offering the most fashionable and market-oriented schemes.
Krung Thai Bank (KTB) has surprised its customers with a "Music Marketing" campaign for 2007. This is considered quite an aggressive strategy for a state-owned bank, with the emphasis on its "convenience bank" concept to satisfy customers. KTB joined forces with music company LOVEiS on the marketing scheme.
"Marketing is the key for the retail banking business. Banks that want to do consumer finance need to use a marketing strategy," KTB president Apisak Tantivorawong said.
He added the bank stands firm on further strengthening its capability as "The Convenience Bank". To complete a range of services for all levels of customers, the bank in 2006 increased "service accessing channels" for all customer groups 24 hours a day and seven days a week.
Under the strategy, KTB plans to increase its Internet banking customer base from the current 60,000 accounts to 1 million by the end of 2007. Customers who apply for KTB's online service can download songs from music producer LOVEiS exclusively via the bank's website.
Moreover, customers can be special guests for LOVEiS concerts and other activities. LOVEiS artists will take part in the bank's activities organised to introduce KTB's new financial products and services. The bank believes its customers will benefit both from getting updates on the bank's products and enjoying the music from its music partner.
KTB has a media budget of Bt30 million for the campaign. But it declined to disclose other spending details, particularly those of the contract with LOVEiS.
Kasikornbank has been running a marketing strategy under its K Group brand with its five subsidiaries: Kasikorn Securities, Kasikorn Leasing, Kasikorn Asset Management, Kasikorn Factoring and the Kasikorn Research Centre. The bank has created "K Heroes", five animation characters to represent its products.
According to Kbank's 2007 business plan, the aim is to concentrate on small and medium enterprises (SMEs). The bank plans to penetrate into this market, especially in certain business centres such as Koh Samui and Phuket.
The country's fourth biggest bank plans to visit SME clients in these areas to strengthen relationships as well as look for more business opportunities. This strategy will be conducted by the top management of each K company, led by Prasarn Trairatvorakul, Kbank's president.
With this psychological marketing strategy, smaller business operators upcountry will be impressed that they are able to access the bank's top management.
Prasarn said currently Thai consumers are accustomed to the past government's populist policies. However, Kbank mainly focuses on customers' demands and offers them products accordingly.
"We offer them a full range of financial services according to their requirements. That means we give them convenience, so a populist policy is not necessary," he said.
The bank's two challenges for retail banking business in 2007 are expanding the base of new customers and providing unique financial products and services. The average age of the bank's existing customers is rising. Thus, the bank has to expand its customer base for a new generation.
The bank also plans to offer customers new products, including commodity trading. Therefore, strong branding is another important factor that the bank will have to build in 2007.
Another bank with an aggressive marketing strategy is Bank of Ayudhya (BAY).
The country's sixth largest bank will still maintain "Entertainment Banking" as its marketing concept, a policy continued from last year. Under the marketing plan, BAY mainly focuses on building up business volumes and business partners.
Charlotte Dhonavanik, first senior executive vice president, believes BAY has been working in the right direction, as entertainment is still expected to be trendy in 2007.
"When the BAY-General Electric acquisition is completed, our marketing strategy will come into global standards. The bank will be supported by GE technology, in particular a CRM (credit-risk management) system to improve the bank's marketing. While the deal is still not finished, the marketing plan for this year is set only by BAY," she said.
She said GE's 25-per-cent acquisition of BAY is expected to be completed this month, therefore the strategy on business development and marketing strategy will be clearer in three to six months. Once GE joins, the BAY marketing plan may be more aggressive in some areas, while some parts of the business may be cut depending on the results of GE's CRM system.
Although several large banks are playing their marketing plans more aggressively in 2007, Bangkok Bank (BBL) still runs its business strategy simply. Colourful strategies or gimmicks seem to be unnecessary for the country's largest commercial bank. Customers' benefit will continue to be the bank's key marketing concept.
"Our customers already know that Bangkok Bank is number one and they trust the bank's products and services. So we don't need to play a gimmicks strategy to attract them," said Karen Cambell, executive vice president for the product and distribution channel department.
As a result, BBL's marketing plan for 2007 will concentrate on its existing customers, with the objective of providing them with more products under a higher "cross-selling ratio" strategy. The bank will utilise its current 16 million clients to expand to a new customer base by having the older generation recommend the younger generation - parents to children, for example - to use the bank's services.
Moreover, BBL plans to launch a marketing strategy for more public relations in 2007 to widen its new customer base.
"Once customers know that Bangkok Bank is number one, we should also let public know as well. Thus, the bank will implement its marketing strategy via mass communications in 2007," Cambell said.
Siam Commercial Bank - celebrating its 100th anniversary this month - is expected to run a more aggressive marketing strategy. It will focus on SME loans, credit-card business and the auto hire-purchase market. The marketing plan will be colourful but the Kingdom's oldest bank is still keeping the details a secret.