HDFC-BUILDING AFFINITY WITH A KEY INTERMEDIARY

Introduction
HDFC was set up in the 1970s
Explicit purpose:

Providing easy, affordable loans to the middle class household , for buying their own homes

Building brand
Easy procedure
Courteous staff Excellent background work Reasonably attractive rates of interest

Challenge in 1990s
HDFC aided by subsidized funds from international

sources
Had to source its funds from the local market It enjoyed tremendous equity with the middle class Had built a great brand equity that could be used for

mobilizing funds

Collecting FDs
It went in for collecting FDs from retail investors
Deposits were of different types cumulative/non

cumulative, 1/2/3 years

Did not offer interest rates similar to aggressive NBFC

Why HDFC succeeded?

Collapse in shares and stocks
NBFC seen as suspect Mutual funds speculative

HDFC benefited from this trend

Its deposits were seen as safe with medium returns It wanted to explore ways of building equity and look

at innovative approaches to do so

Opportunity for HDFC

Create a positive bias in the minds of its agents, create

a brand preference, it will pay back many times over It was selling a me- too product Brand enjoyed good awareness and image with the investors HDFC put its agenda to build strengthen its relationship with its agents

HDFC Agents
The company listened to them and was responsive to

their needs Do delays in receiving commission 46,000 agents to enable quick payment of commission , the agents were dealt with on a day to day basis by branch offices

Relationship programme
Obj: to make the agent feel a bit closer to the brand

HDFC

Step 1
Census questionnaire to the agents
Info on the agents total fund mobilisation capacity,

key products, growth/ performance , infra structure offered, special services offered, family details, future plans, ratings of HDFC etc

Data analysis
Just 10,00 agents mattered, they were the key as they

held a huge potential Rated HDFC very high Looked forward to help from HDFC to improve their business Operated in their own names as well as family members Wanted to expand their computer base

Key partners Programme

Was launched with a newsletter titled In-touch

which went out to all selected members Followed by handy booklet on how to sell an FD in HDFC Obj: provide with value addition once in 3-4 months

Value additions
Indian govt: changed rules regarding taxation
Led to confusion in agent community HDFC key partner members received a handy

compendium explaining nuances of the new govt.

 1997 :pager companies were facing a glut

HDFC ties up with one such co. and offered a free

pager offer Agents took the offer and well received message HDFC cares for us HDFC tied up with Aptech to offer special schemes for computer training

The result
Appreciate by all the agents
Elicited numerous thank-you letters Increased collections, loyalty, brand imagery

Glued the key intermediary, the agent to the brand

HDFCs