BG31303 MARKETING MANAGEMENT

UNIVERSITI MALAYSIA SABAH

SCHOOL OF BUSINESS AND ECONOMICS
SEMESTER I, 2010/11

CHAPTER 19 MANAGING PERSONAL COMMUNICATION:

DIRECT MARKETING AND PERSONAL SELLING
CASE STUDY: HSBC CREDIT CARDS
DATE SUBMITTED: 21ST OCTOBER 2010
LECTURER: MS. JENNY IGNATIUS

GROUP 4
GROUP MEMBER:

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Table of contents:

No. Contents Page

1 Introduction 2

2 Direct Marketing

3 Interactive Marketing

4 Designing Sales Force

5 Managing Sales Force

6 Principles of personal Selling

7 Conclusion

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INTRODUCTION

Communications is a must for every organisation, from introducing brand, creating

brand awareness, building relationships with public, strengthening brand image and
most important, maximizing profits. There are some issues raised where direct
marketing and personal selling is no longer compatible in global market now a days.
It is because many issues such as lower trust among public, irritation derived by
overlapping information and negative image of salesperson and direct selling
companies, cause direct marketing and personal selling to be less effective.
However, these approaches cannot be excluded from any organisation, include
HSBC Credit Cards. Parallel with advance of technology and changing of customer
expectation, strategies of direct marketing and personal selling has been modified
and improved, where HSBC Credit Cards are able to approach their customers in
more effective ways.

Through this case study, five objectives will be attained. First, direct
marketing integration demonstrated by HSBC Credit Cards to achieve competitive
advantage. Second, the approaches used by HSBC Credit Cards to perform effective
interactive marketing. Third, the advantages taken by HSBC Credit Cards from
implementing the word of mouth will be explained. Forth, design and management
of HSBC Credit Cards sales force will be demonstrated. Lastly, the improvement on
HSBC Credit Cards on their selling, negotiating, and relationship marketing skills will
be presented.

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DIRECT MARKETING

Direct marketing is use of customer-direct channels to reach and deliver goods and
services to customers without using marketing middlemen. HSBC Credit Card has
applied several method of direct marketing in promoting the product. It has
included Web site of HSBC Credit Card, where demonstrated that customers are
able to apply online by using interactive flash player; telemarketing, which
information about products and services will be communicated to customers via
telephone, mobile phone, electronic media, post or other means; and direct mail,
where the latest promotion and information will be attached in monthly statement
of cardholders; and interactive TV commercial.

Direct marketing methods are used to inform customers the latest news or
promotion about the credit card which can attract new customers, encourage them
to spend more, and build lucrative and long-lasting relationships. For example,
cardholders of HSBC Premier Credit Card will qualify for participation in the
MasterCard moments service. This online service introduces the benefits and
privileges being offered by MasterCard moments partner both overseas and in
Japan. When travelling overseas, cardholders can avail themselves of specially
selected luxury hotel resorts, spas and golf courses. In Japan, cardholders can enjoy
discounts of up to 20% at select Japanese-style luxury hotels as well.

BENEFITS OF DIRECT MARKETING

Through direct marketing, HSBC Credit Card is able to offer more benefits to its
customers. HSBC Credit Card has offered “SMS Balance Enquiry” that allows
customers to check their credit card outstanding balance and available credit limit
(BAL), latest statement balance, minimum amount due and payment due date
(DUE) and Reward Points balance (PTS) via mobile phones. Additionally, HSBC also
has offered 24-hour toll-free customer service, 24-hour online access to customer’s
account information. Moreover, HSBC Credit Card provides free online bill paying
services that ensure customers to make their transfer process, know the latest
news and contact HSBC Bank anytime.

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 Direct marketing of HSBC Credit Card has added value to customers by
offering a wider selection of products and comparing the different types of credit
card for customers. For example, HSBC Credit Card comparison is shown on
HSBC Credit Card’s Web site to differentiate each type of credit card. Description,
features, eligibility criteria, and services of each type of credit card are included on
the web site. Finally, HSBC Credit Card has found that direct marketing can be
attractive as they have included advertisements on the Web site. It has eased
customers as direct marketing is building closer relationship with customers and
more personalised information be delivered.

Direct Mail

Direct mail marketing involves sending an offer, announcement, reminder, or other

item to a person. HSBC Credit Card introduces the products and services to their
customers through attaching latest promotions and announcements with monthly
statement of credit cards. According to the Martin Betts, HSBC’s Head of
Communications stated that “we feel we're better able to cater for our customers'
needs by using the data we hold and targeting our customers via direct mail with
products relevant to them” (McElhatton, 2001). HSBC will also market its credit
cards through direct mail to inform customers the types of credit card the HSBC
offer, what benefits of the credit cards, and what kind of services that HSBC Credit
Cards. On the other hand, HSBC has sent letter or e-mail to remind customers to
pay payment for their credit card expenses and inform the amount they need to
repay in every month. Additionally, HSBC also make announcement for their new
product of credit card or promotion to every client via letters, email or fax mail
which can let every client know the features of the new product or catch the best
chance to enjoy the promotion that offer by HSBC bank as well.

Objective

The objective of direct mail in HSBC Credit Cards is producing prospect leads,
strengthening customer relationships, informing and educating customer on proper
way in using credit card. The direct mail method is also functioning as reminder of
offers including new type of credit cards or promotion and reinforcing recent
customer purchase decisions.

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Target market and prospects

Recency, frequency and monetary mount (RFM) are used to rate and select
customer before direct mailing applied. In term of recency, HSBC Credit Cards will
select target customers who are new to HSBC Credit Cards. More detailed
information about credit cards, proper ways in using credit cards and more offers
will be provided through direct mail will be sent to these customers. It is because
new customers are usually categorised as valuable and vulnerable customers,
which stronger relationship must be built in order to create brand loyalty among
these customers. On the other hand, HSBC Credit Cards will send reminder to
customers who hardly to make any purchase in recent time. Secondly, HSBC Credit
Cards will promote its products, services and promotions in more aggressive way to
cardholders that use credit cards frequently. Reward points will be updated monthly
in monthly statement to reward customers and strengthen their brand loyalty.
However, HSBC Credit Cards take monetary amount as major consideration in rating
and selecting customers for direct mailing. HSBC Credit Cards is encouraging
customers to spend more by using HSBC Credit Cards. Customer who spend more
(and have strong ability to pay monthly installment) will be given a supplemental
card or the credit card amount will be upgraded. All these reward is sent via direct
mail.

Next, HSBC Credit Cards are identifying prospects based on such variable as
age, sex, income, education level, and previous mail-order purchases. Therefore,
business peoples or parents who have middle income level as the target market of
HSBC bank to apply the credit card. This can avoid customers bring a lot of value in
cash, in order they can use credit card in the emergency situation as well as enjoy
the benefits or rewards that offer for the credit card’s users.

Offer Elements

The direct mail has including in five components of the mailing which are the
outside envelope, sales letter, circular, reply form and reply envelope as well.
Basically, the outside envelope of HSBC Bank is white colour with computer-typed
method and the shape of envelope of HSBC Bank is standard size which is
rectangle. Besides that, the letter of HSBC Bank is printed on good quality paper

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and it will headline the important points such as name, date, total amount in bold
type. HSBC Bank also has provide their toll-free number to let customers contract
HSBC Bank when they are face any problems about the HSBC’s products and HSBC
Bank has provide postage-free reply envelope to customers when they need
feedback or response from customers.

 Testing Elements
 Measuring Campaign Success: Lifetime value

What the heck!!!!!!!!!!!!!!!!!!!!!!!!! Always like that… tired!!!!!!!!!!!!!!!!!

Everytime they dunno how to do… they never ask… just dump it to you
and expect you to complete!!!

CATALOG MARKETING

Catalog marketing saves time, appeal to those who are fearful of shopping due to
crime rates, offer convenience, allow leisurely decisions, offer privacy, often offer
toll-free telephone numbers to place orders, and allow comparison of quality and
price. HSBC Credit Cards is offering catalog of credit cards to customers via Web
site. The section of ‘Compare Credit Cards’ in HSBC Credit Cards’ Web page has
listed the description, criteria, and extensional services provided by HSBC Credit
Cards. As a result, customers are able to compare the features and benefits that
offered by different types of credit cards, in order choose the best types of credit
card which relevant with customers’ need and want. Furthermore, HSBC bank has
offered catalog of the privilege and rewards from the credit cards such as
“SmartPrivilage” and “HSBC rewards”.

TELEMARKETING

Telemarketing is the use of the telephone and calls centres to attract customers,
sell to existing customers and provide service by taking orders and answering
answer. For HSBC bank, it has used inbound telemarketing to receive calls from
customers and ready answer the question or confused from customers. Besides,
HSBC Bank need to explain to their customer about the products’ feature,
differentiate or benefits that they offer. HSBC bank is showing their readiness to
receive feedback and complaint from customers. Before the conversation started,

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HSBC Bank has also made it clear that the conversation will be recorded to improve
their service. Meanwhile, the outbound telemarketing is applied by HSBC Credit
Cards to introduce latest promotions and update latest information to customers.

PUBLIC AND ETHICAL ISSUE IN DIRECT MARKETING: How HSBC Credit

Cards overcome it?

Markets are bombarded by many hard selling and direct marketing approaches
every day. In order to prevent issues such as irritation, unfairness, deception and
fraud, and invasion of privacy among their customers, HSBC Credit Cards has
provided an agreement via Web site to prospects and target markets. HSBC credit
Cards have promised that the information of cardholders will not be transmitted to
unauthorised third party, unless it is legally compelled to do so. Besides, HSBC
Credit Card is allowing cardholders to choose not to receive direct marketing
information anytime. Cardholders are also being protected by HSBC Credit Cards by
empowered the right to request access to and correct their Personal Data. These
guarantees have obviously gained confident among cardholders as their privacy is
being protected in general.

INTERACTIVE MARKETING

Interactive marketing refers to the evolving trend in marketing whereby marketing

has moved from a transaction-based effort to a conversation. As mentioned before,
HSBC Credit Cards established “Compare Credit Cards” section on Web site, where
detailed information of each type of credit cards has been included on Web page.
Besides, HSBC Credit Cards is including advertisement and other section such as
“Could It Work For You?”, where customers wants are stated, to demonstrate more
personalised information to attract customers.

There are some advantages by using interactive marketing. First, it creates

high-end marketing materials designed for optimal viewing and improves 24/7
customer access to engaging interactive collateral. Customers get to view and keep
tack on information about the credit cards that offered by HSBC at all the time.
Besides, HSBC Credit Cards deliver more dynamic and memorable user’s
experience and actively engages customers earlier in the sales cycle through

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interactive marketing. They can project a consistent memorable identity and
leverages investments in corporate web sites and collateral designs. Moreover,
interactive marketing allows HSBC Credit Cards to streamline the flow of
information to their customers. Cardholders of HSBC Bank will be exposed to
updates of credit cards from time to time via e-mail once they have subscribed the
newsletter from HSBC Bank. HSBC Bank will send information, promotions and
latest news to customers in a more personalised approach based on the products
they have purchased from HSBC Bank. This method is proven to be effective as it
set the HSBC Bank apart from the competition, provides secure document exchange
and copyright protection, and reduces marketing costs.

Cons of interactive marketing must be faced by HSBC Credit Cards. It is hard

for HSBC Credit Cards to measure the success of interactive marketing. Moreover,
customers might misinterpret the message sent by HSBC Credit Cards, which might
lead to dissatisfaction among customers. For example, in order to promote HSBC
Visa Platinum Credit Card, the message of ‘Instant Cash Back RM160’ will be shown
in an obvious way, without highlighting the terms and conditions applied before
obtaining the privilege. If customers are not satisfied with the terms and conditions
offered, negative feedback might be occurred.

The using of interactive marketing by HSBC credit cards might be the most
effective approach in penetrating to HSBC Credit Cards target market. As the
detailed information and descriptions of credit cards, convenience in applying the
credit cards and strong after-sales assistant are emphasised on HSBC Credit Cards
Web page, HSBC Bank has established its image where transparency and
convenience are priority for HSBC Bank. Additionally, the interactive marketing of
HSBC is providing prospects and potential customers to make deep consideration
and comparison before applying the credit card that able to fulfil their needs and
wants.

WORD OF MOUTH

Buzz marketing (I don’t think HSBC use buzz marketing)

HSBC Credit Cards use high profile entertainment, news and event to get
people to talk about the brand. (really?? reference) This is to create awareness in

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the eye of the people about the brand or also call as brand awareness. When they
create some positive show in front of the customer or their target market, it will
attract more the customer. This type of marketing is the easiest way to get nearer
to the customer or future customer. Events such as fashion show, gala night, charity
and even some food fiesta will pull many people from different background and
here HSBC will try to put as many as of their advertisement or logo and some flyers
around to tell to their guest about their promotions and future benefits about the
credit cards.

HSBC has actively involved in events such as business forum like insight
Indonesia, India in focus and Vietnam in view. The main purpose of this forum is to
Gain a better understanding of Indonesia’s, India’s and Vietnam’s economic outlook,
Get the inside scoop on the country’s investment potential, Exchange views with
business leaders and experts, and learn about their business forays in Indonesia,
and Meet officials from the Investment Coordinating Board of Indonesia and discuss
potential investment projects. Other than this it also to acknowledge the market in
the country about their product by launching the credit card in the main business
area of the country and capture the main business target. By organizing such event,
their main market which is the upper middle and higher earning power customer
will know much better about what type of credit card does the HSBC is providing.
Since all of these three events is been organized by HSBC Malaysia, they already
create the business deals too between two countries and create a very good image
from the government and the local’s perspective too.

That is ur part, Below is my part. U decide.

The usage of buzz marketing is never planned by HSBC Credit Cards. However,
HSBC Credit Card has indirectly creating buzz marketing, by emphasising the
promotions and offer on Web site and sending the extensional promotion and
privileges to cardholders. For example, HSBC Credit Cards has offered
“SmartPrivileges”, where cardholders are given offer to having buffet for 2 in well-
known Japanese Restaurants, which an extra free meal will be provided by paying
with any HSBC Credit Card. Hence, HSBC Credit Cards will be exposed to more
potential customers through demonstration by their close friends and relatives.
Through the promotions offered, excitement, publicity and information about credit

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cards spread unexpectedly to public. In addition, HSBC Credit Cards tended to
create buzz marketing few years ago by showing creative advertisement. By
breaking the rules of advertisement, HSBC Credit Cards were trying to implant
memorable image among public to create strong public awareness.

Viral marketing

Viral marketing has been conducted by HSBC Credit Cards as they launched new
Internet presentation along with the launch of its HSBC Premier services. The web
presentation has a host a virtual banker where offering clients information on
products. (reference) This form of communication based on video combined with
the Flash technology creates a personal relationship between a potential client and
the bank.

Other than that they also come with “different people different views” and
“Gogreen” campaign which has different target market and different move to
market their product and to penetrate into different market.

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Influencer marketing / opinion leader

Influencer marketing is identifying key communities or the opinion leaders in

influencing the opinions of other people. For example Leonardo DiCaprio paid his
first visit to Hong Kong to help launch HSBC’s new line of “green” credit cards. (I
thought it is restricted to Malaysia) The green card is made of environmentally
friendly materials and uses digital bills to cut down paper consumption. Every
transaction will also contribute to a local environmental protection project. The
launch is a joint project between HSBC and The Leonardo DiCaprio foundation.

Other than this HSBC also use other media such as newspaper, magazines and TV
to active the word of mouth marketing strategy. HSBC has their own television
network and business magazine which is HSBC Business TV and Infinite Horizons
(Malaysia??) that will keep the customer updated on a quarterly basis with the
latest business development and financial tools to help them and their business
customer. (Ahoy….. reference!!!)

• cliques

• law of the few

• stickiness

• power of context

• u didn’t talk about these things…. if dun have… just mention dun have… if
have… reference please….

Blog
Blog is a regularly updated online journals or diaries, which the power of influence is
unpredictable. HSBC Credit Cards are striving to build its positive image of credit
cards among the market, especially younger customers. Moreover, most of the
articles posted on blog are accessible in sharing on Facebook, Twitter, MySpace and
other internet social networking. Besides, as the advance of technology, bloggers
are easily to be linked to each other, which create a large community among virtual
world. As results, blog might be one of the most effective approaches to attract
younger customers. Through our research, there are different opinions towards the

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offer of HSBC Credit Cards among bloggers and respondents. Recently, there was a
negative feedback written by former cardholder HSBC Credit Cards, who also a well-
known blogger at the same time (refer to Appendix). However, from the research
conducted in HSBC Credit Cards, there is no commitment from HSBC Credit Cards in
controlling the impact derived from blogs. This might create negative image of
HSBC Credit Cards in the market, especially for young markets.

DESIGNING SALES FORCE

Nowadays, most of the companies use salespeople to create awareness of

customers or business public to their company’s offering. Several concepts are
essential concerning the perspective of designing of sales force which is starting
with the sales force objectives, sales force strategy, sales force structure,
sales force size and sales force compensation.

Firstly, the companies must define the specific objective in their sales
force where these concepts are important for them to determine the company
strategy to achieve the specific objectives for the sales force to achieve in the
company. There have seven specific tasks that the sales force should perform which
are prospecting, targeting, communicating, selling servicing, information gathering
and allocating. Hong Kong and Shanghai Banking Corporation or HSBC credit Card
Company is one of the card issuers in the local market with the most aggressive
ranks and top attractive .The sales force of the business focus to attract new
customers and drive loyalty from their existing customer base which progresses
considerably over time and attractive top card issuers in the local market. These
basic concepts became the basis for HSBC to develop their strategies in their aim to
maintain their global competitiveness and reputation. HSBC’s most successful
global technology roll-outs is its Whirl/champs credit card authorization and
accounting platform which were consisting of 17 linked applications, including credit
assessment, risk-based pricing, card ordering and transaction processing and
reporting. This program useful to reduced the costs for the process of transaction,
generating an estimated annualized saving 23 million Euros, and allowed the bank
to carry out a 25% growth in credit cards with no incremental cost (2006). HSBC

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would utilize Fair Isaac’s proven software technologies, analytic models and
development processes for Enterprise Decision Management which will help HSBC
grow its ability to optimize profitability across the bank’s consumer lending
portfolios, and support its long-term growth objectives in the Asia-Pacific region
(2006). Moreover, HSBC required a highly scalable solution to roll out optimized
decision strategies across products, countries and decision areas in order to build
upon rapid growth of its credit card portfolios and strengthen its leadership in Asia-
Pacific’s booming consumer lending market.

To maintain a market focus the HSBC invest on software programs and

applications. It is easier for the company to reach their customers globally and
serve them better and faster by using the internet and other web based
applications and even implementing projects and new programs to serve and relate
to their customers effectively. Sales force will need to focus on acquiring new
customers to expand the existing base through monocline product sales as well as
reaching new areas that are not penetrated by the other channels. This is achieved
through a sales management structure that contributes to the development and
management of sales activities, processes and resources. This is to maximize sales
opportunities and sales productivity while maintaining full compliance to all relevant
regulations.

HSBC has several strategies for growth by having specific approaches with
the direct or contractual sales force. The direct sales means the full or part time of
employees in the company which will represent the company to approach
customers while the contractual sales consists of manufacturers rep which were
sales agents, and brokers who are paid by commission based on sales. So this
approach can maintain their position as the world’s local bank, which enables them
to approach each customer uniquely, blending local knowledge with a worldwide
operation platform.

Sales force structure which a territorial structure use by the company that
sells one product line to one end using industry with customers in many locations.
While a product or market structure use by the company sells many products in
many types of customers. Some company need a more complex structure. HSBC

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Holdings have more than 8500 offices in 86 countries and territories in Asia Pacific,
Europe, Americas, Middle East and Africa. Today, the HSBC Group has some 10,000
offices in 76 countries. This is a good approach for each of these regions are distinct
from each other since it is difficult to implement a single project for all clients
around the world with a different cultures and beliefs. The difference in approach is
meeting the different needs of their customers and some of the business
organization improvement of customer rendered products and service and at their
aim to find good solutions and techniques.

HSBC will focus activities on geographies where growth and critical mass are
located. The company was able to establish itself in call centres to provide their
services in relation to sales and checking of accounts. The call centres are
responsible to provide their customers with information regarding their accounts.
Call centres agents are also responsible for answering the queries of customers
regarding the company. Highly efficient technology links these operations to deliver
a wide range of international products and services, adapted to local customers'
needs. In Channels and Customer Service, the channel integration will be a key
priority as we seek to improve customer service, reduce costs and optimize
distribution channel networks. HSBC enhance multichannel capabilities using the
latest technology continuously and with the best-of-breed Customer Relationship
Management System (CRMS) capabilities.

HSBC provides a full range of personal financial and wealth management

services in Hong Kong. These include HKD/USD currency and RMB/multicurrency
savings accounts, integrated accounts, mortgage finance, personal credit services,
hire purchase and leasing for motor vehicles, term deposits and credit/debit cards,
financial planning, investment services such as unit trusts, bonds and certificates of
deposit, local and overseas securities, broking services, Mandatory Provident Fund
investment options, and insurance. HSBC only have 400K credit card but 4 million
debit cards at acquisition. CRM now accounts credit cards sales up to 70%. The new
sales channels to drive growth going forward by create a new area which is retail
Services sell through 3rd party channels partnering, white label, private label and
store brands. As part of the Credit Card team, they need deliver more value via
promotion to their cardholders in order to position their brand. HSBC's ATM network,

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internet banking service, 24-hour phone banking centre, more than 20 Mortgage
Advice Centres providing customized advice seven days a week, and a network of
over 180 branches and offices are the channel that distribute the service of HSBC.
HSBC's internet banking service was being used by over 700,000 customers at the
end of April 2004. The Sales Management team manages the sales and distribution
of the Bank’s extensive portfolio of PFS wealth management products and services
through a multi-channel approach that includes Branch Network, Direct Sales Team
and Telemarketing.

The sales force size was one of the several key elements in achieving
HSBC’s global development objectives, and these include accelerating the rate of
growth of revenue, developing the brand strategy further, improving productivity,
and maintaining the company’s prudent risk management and strong financial
position. Developing the skills of their employees is also given emphasis to ensure
that all employees understand how they can contribute to the successful
achievement of HSBC’s objectives (‘’ 2006).

Sales force compensation to attract to quality sales representative which

the company should provide the attractive compensation package which consists of
this four components of sales force compensation that were fixed amount, a
variable amount, expense allowance and benefits. There is various career
opportunities exist within the PFS Sales and Distribution’s sales streams. The
employees manage to maximise their sales potential because of the combination of
their international reputation, customer base and innovative products. The
performance-based incentive rewards ensure the company success representative
receive the desire of the financial returns. Sales people should preferably have sales
experience in the field of financial services and possession of Certified Financial
Planner qualification would be an extra advantage. The financial rewards are
unlimited and it grows with sales force determination and drive to succeed.

MANAGING SALES FORCE

HSBC’s Credit Cards emphasise on end customer experience where customer

needs and service is the dominant key. HSBC’s personal financial service is a front-
line customer interface encounter thus they play high importance on the quality of

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front-liners like sales representatives with strong personal communication skills,
enthusiastic and business driven. HSBC has been one of the most aggressive top
card issuers in the local market.

Recruiting and Selecting Sales Representatives

According to Mr. Zarir J. Cama, the Deputy Chairman & CEO of HSBC Bank
Malaysia Berhad in his speech during the Corporate Social Responsibility
Conference Program (21st-22nd June 2004), being a fair and objective employer,
HSBC is using a merit approach to recruitment and selection and promotion. They
delegate authority with accountability and promoting good environmental practices
and sustainable development. In HSBC, the recruitment process is the same for
whichever position one applies including sales representative for credit card. There
are six steps for HSBC recruitment process.

First and foremost, the first thing to be done is to fill in the online application
form that can be found in HSBC careers website. A short series of screening
questions will be sent to the applicant before he/she receives an online automated
test which requires applicant to complete within one week. The close-ended
screening questions which consist of working basic requirement assist HSBC when
selecting sales representative in this case. The automated tests assess the
applicant’s approach to particular workplace situations besides providing
opportunity to understand the types of situation within the position of sales
representative. It takes less than one day to complete the online application form,
screening question and the online assessment test. Whoever candidate that passes
the online test will be contacted within 24 hours to be scheduled into a telephone
interview. Next, a 30-45 minutes telephone interview reveals some criteria for a
sales representative for instance the communication skills. An on-site assessment
will be held after succeed of the telephone interview. The final stage is the enquiry
of references of applicant. Once the references are received, contract will be sent
out. The referencing stage can take up to 4 weeks (http://www.jobs.hsbc.co.uk/209-
472-EN/CallCentresAndSupport.aspx).

Training Supervising sales representatives

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 As part of the HSBC credit card team, he/she will meet milestones by
delivering more value through exciting promotions to existing as well as potential
cardholders to position brand presence in the mind of every customer. The credit
card sales representatives ought to possess teamwork qualities, trustworthiness,
professionalism and integrity to be HSBC ambassadors.

HSBC provides training program for graduates in Personal Financial Services

(PFS) Stream. It aims to prepare a firm foundation for PFS Executive Trainees (ETs)
to become managers who are highly knowledgeable professionals and experts in
the personal financial business. HSBC anticipates those candidates that are being
selected from the training program will be capable of reaching senior management
levels during the course of career with the bank. Below is one of the training
program designs specially for graduates who want to be part of HSBC personal
financial service.

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Program Design

Duration: Approximately 30 months

Induction:
3 weeks – Induction Program by Learning and Development Centre (LDV)

Phase 1: (Attachment; Duration: 9 months)

6 months – Core Attachment in one of the HSBC Malaysia’s 40 branches.
3 months – Supplementary Attachment in other PFS functions:
 Branch Operations

 Branch Sales (Branch/Direct Sales Team)

 Card Products (CPD) (Credit Operations/Card Operations)

 Network Services Centre (NSC)

 Payment Services Centre (PSV)

 Marketing

Phase 2:
15-18 months – First posting
4 weeks (within time frame of First posting) – Group Graduate Development
Program (GGDP) in Bricket Wood, UK

Phase 3:
Resume First/current posting in stream, or movement to Second posting either in
same stream or (exceptionally) cross-functional transfer (15-18 months), within
which the 3-weeks Regional Graduate Development Program (RGDP) in Hong Kong
will take place.

Support and Mentoring

Senior Managers in PFS are appointed as line mentors to provide ETs career
guidance.

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The PFS ETs are further supported by HR for their placement / development and
career counseling.

Training
Suitable / relevant training courses would be identified by the line mentors /
managers for the ET to attend during their attachment / posting in PFS.
Further training needs can be identified based on:
• GGDP assessment and feedback from line managers and trainers

• Individual needs

Performance Management
During the program, the ETs will follow the standard performance
management mechanism for all executives in the Bank. Performance targets will be
set and agreed with in the beginning of each attachment. On-going performance
reviews and appraisal meetings will be conducted by the line manager to whom the
ET reports for the attachment. The ET 'graduates' from the PFS MDP after
completing all attachments in PFS MDP (approximately after 30 months of service)
with satisfactory performance and line manager’s endorsement.

Salary Progression
New recruits will join PFS MDP as an Executive Trainee (ET) on 6 months' probation.
Subject to satisfactory performance and line endorsement, the probation will be
confirmed after 6 months’ of service and monthly salary will be adjusted. He/She is
henceforth confirmed as an Executive of the Bank. Thereafter, towards the end of
each year, an appraisal rating will be determined and used for the Variable Bonus
Scheme (VBS) to determine amount of bonus for the year. Salary will also be
adjusted annually based on the Executive’s performance as reflected in his/her
performance review.
Salary review and/or promotion will be considered subject to:
• consistently having achieved 2 years’ of good appraisal ratings;

• line manager's recommendation

PRINCIPLES OF PERSONAL SELLING

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SPIN method is crucial to be applied in HSBC Credit Cardss to build long term
relationships, which included:

1. Situation questions - These questions are asked about facts or explore the
buyer’s present situation on using credit cards. For example, “How do you
pay for your bills?”

2. Problem questions - These questions deal with the problems, difficulties, or

dissatisfactions that faced by customers. For example, “Do the credit card
offer you relevant promotions that you need?”

3. Implication questions - These questions ask about the consequences and

effects derived from problems, difficulties and dissatisfactions faced. For
example, “Do you find the irrelevant promotions cause you inconvenient?”

4. Need-payoff questions - These questions intend to attract customers by

proposing better offer or solution. For example, “How much our credit card
attract you if we offer instant cash rebate?”

However, proper training must be conducted among sales forces in HSBC Credit
Cardss to prevent from providing wrong information to customers, unprofessional
personal selling skills, and creating irritation among public.

Seven Steps in Effective Selling

Prospecting and qualifying

The first step of salesperson of HSBC bank in selling is to identify and select qualify
prospect customer. Most of the time, HSBC Bank Credit Cards will choose to conduct
personal selling in event or shopping mall. Hence, sales forces will able to
prospecting more customers with strong buying power. Through observation and
face-to-face conversation, prospecting and qualifying of customers will be more
effective. They will make the presentation of service offering such as credit card
promotion that offered by HSBC Bank to the potential customers.

Besides, HSBC Credit Cardss use internet marketing of services for promotion
of banking services. For example, HSBC Credit Cardss use E-advertisings in
promoting credit card. Advertisements are placed on ‘Home Page’ of e-mail service

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providers. Latest promotion and information can be delivered to prospects and
potential customers widely.

Pre-approach

It is crucial for salespersons of HSBC Credit Cardss to conduct research on the

prospects such as customer’s age, lifestyle, income and spending power before
introducing the products and services to customers. Then, introduction and
promotion of products and services will be easier for salespersons after they
understand the purchase behavior of each individual different preference. For
example, for higher income prospects, salesperson will likely to promote HSBC Visa
Platinum Credit Card or HSBC Gold Credit Card; for young markets who spend more
time in entertainment, salespersons will be likely to introduce HSBC’s Everyday
Movie Privileges Prepaid Card to them. However, HSBC Credit Cardss salesperson
need to consider prospect customer’s purchase decision and personal likes or
dislikes in pre-approach process. Salesperson in HSBC Bank need to follow overall
sales strategy as credit cards will be able to be promoted in effective way. They
need to choose most appropriate way and effective sales strategy to approach that
includes face-to-face, make a phone call or advertise on website.

Approach

Good impression must be given before approaching the prospects. Polite manner,
smile, patience in explaining and respect to prospects are crucial factors to start a
good relationship with customers. Besides, appropriate attire is helping to give
potential customers a good image. Most of the time, HSBC Credit Cardss
salespersons will wear uniform of HSBC Bank in polite way to show their
professionalism. Positive opening line such as ‘instant cash rebate’, ‘low annual fee’
or ‘zero interest’ are used to attract public attentions.

Presentation and demonstration

Salesperson must able to introduce the features, advantages and benefits in

presentation HSBC Credit Cardss. For example, features of HSBC Visa Platinum
Credit Card is card holder can get 8000 reward points as welcome gift. On the other
hand, the feature of HSBC Gold Credit Card is credit card holder have zero lost-

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credit card liability after the loss of the credit card has been reported to the Bank in
writing or to the VISA or Master Card Global Emergency Assistance Help lines.

In addition, salesperson must describe the advantages of credit card to the

customer. For instance, the advantage of using HSBC Visa Platinum Credit Card is
getting rewarded with cash back of RM160 when buyer apply for an HSBC Visa
Platinum Credit Card for from 5 July 2010 to 31 October 2010. On the other hand,
the advantage of using HSBC Gold Credit Card is getting rewarded with cash back of
RM90 when buyer applies for an HSBC Gold Credit Card for from 5 July 2010 to 31
October 2010.

Overcoming objection

Buyer often pose objection when salesperson begin to promote HSBC Credit Cardss.
Hence, salesperson need to award psychological resistance and logical resistance
that can influence the buyer purchase decision. Psychological resistance includes
resistance of interference, preference for established supply sources or brands,
apathy, reluctance to giving up something, dislike of making decision and a neurotic
attitude toward money. On the other hand, logical resistance consists of objections
to the price, delivery schedule or certain product and company characteristics.

Salesperson must able to maintain positive approach by asking the buyers to clarify
the objection, denies of validity of objection and turn the objection into a reason for
buying to overcoming the objection. They often with positive attitude convert
objections into reasons for buying with skills of negotiation. For example,
salesperson usually handing and overcoming objection through offering discount to
attract customer in bank purchase HSBC Credit Cards. They “sell the price” rather
than selling through the price. The best example can apply this situation is buyer
can get up to 10% discount and cash back on HSBC Credit card. Hence, before
salesperson approach buyer to promote HSBC Credit Cards, they received training
to recognized value-adding opportunity rather than price-cutting opportunities.

Closing

There are several closing techniques that are including signs of closing in the form
of a question or body language. Salesperson need to know how to recognize closing

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sign from the buyer, including physical actions, statements or comments and
questions. In closing section, salesperson need to inform buyer about the
agreement and delivery points and payment condition are repeated for
confirmations. The proper way of HSBC salesperson closing can make people feel
sincerely of salesperson and it can direct enhance the sales in future.

Salesperson might offer the buyer the specific inducement to close such as
special price and token gift. The offers are given to the buyer for registering and
transacting with internet banking. On the other hand, salespersons are encouraged
to give discount and other gift on different type of HSBC Credit Cards. Salesperson
can offer attractive reward through Maya Kuala Lumpur and Hotel Nikko Kuala
Lumpur with SG$150 worth of voucher with privileges of HSBC Credit Cards holders.
Besides, HSBC card holder also can buy one get one free flight with Singapore
Airlines & Cathay Pacific by HSBC Credit Cards. Buyers feel happy and tend to have
positive image on HSBC Bank when they get something extra then the regular
utility.

Follow up and maintenance

Follow up and maintenance play an important role intended for repeat business and
buyer satisfaction. HSBC Credit Cards has provided few checking accounts that are
including Premier Checking Account, Interest Checking Account and Free Checking
Account and Basic Banking Account for credit card holder and account holder. These
services allow customers to check the balance of amount in the account.
Salesperson is responsible to follow up the customer satisfaction toward the credit
card when the initial order is received to make sure there is proper servicing. Within
this follow up activity, it can assist to detect any problems, assure the buyer of the
salesperson’s interest. Hence, it able enhances customer satisfaction and repeat
business.

Negotiation

Negotiation skills applied to stimulate customer interest in HSBC Credit Cards. In

negotiation process, two parties that are salesperson and buyer should reach
agreement on offers, promotion and terms and conditions before buyer begin to
apply HSBC Credit Cards. There have two general types of exchange in marketing

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which are routinized exchange and negotiated exchange. Routinized exchange can
be defined as administered program of pricing and distribution. On the other hand,
negotiated exchange can be defines as price or other terms area of exchange are
set via bargaining behavior.

For HSBC Credit Cards, issue such as duration of credit card’s approval,
promotion and services offered, frequency of purchase by using credit card of
customers, responsibility for financing, risk taking, and security of personal data are
negotiated issue in promoting HSBC Credit Cards to the buyer. Thus, HSBC Credit
Cards offer different type of credit card such as HSBC Master Card, Platinum Master
Card, Direct Rewards Platinum Card and Orchard Bank Master Card to cater
different demands and wants. For instance, HSBC Master Card is accepted
worldwide, it provides facility of purchase protection and customers are not
required to pay any annual fee. On the other hand, Platinum Master Card offers
cardholder the benefit of Fraud Liability Protection where they are not liable for
unauthorized usage of the card. Direct Rewards Platinum Card offers cardholders to
earn 1 point for every $41 spent on purchase by credit card. Orchard Bank Master
Card is accepted at millions of locations worldwide. Cardholders are able to use
Orchard Bank Master Card by HSBC for online shopping without any worry as HSBC
Personal banking guarantees that they will not be charged for any unauthorized
usage of the card.

Salesperson must perform certain traits and skills such as integrity, patience,
listening skills and ability to persuade other in negotiation stage. HSBC Bank must
able to select the right salesperson in recruitment process. After that, HSBC Bank
has to provid training to salesperson to make sure they have capability to promote
the credit card in effective way. For instance, HSBC give salesperson information
about the product, company and market. HSBC also brief new recruits on company
sales strategy and policy to ensure salesperson understand HSBC standard terms
and conditions of sale. Within these activities, it make salesperson can easily
understand HSBC operation business.

Language

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Language is the most difficult challenges for an international salesperson to
manage. In Malaysia, salesperson are required to be speak fluently in Bahasa
Malaysia and English. Additional language fluency will be advantage for salesperson
in negotiation.

Eye Contact

Eye is one of the most important nonverbal channels for communication and
connection with prospective buyer in negotiation stage. Eye contact is the cheapest
and most effective way to connect with people is to look them into the eye. Hence,
salesperson needs to have eye contact with buyer in negotiate about HSBC Credit
Cards.

Time

Salespersons of HSBC Credit Cards are trained to manage their time in negotiation
to prevent irritation among potential customers.

Status and Title

Buyer-seller relationships tend to work better when both parties are of equivalent
rank, age and seniority. As HSBC Credit Cards are intending to penetrate in younger
markets, young and energetic salespersons are mostly be hired as less time will be
consumed in breaking the ice.

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Decision making style

Negotiation must be conducted in a friendly atmosphere. Before salesperson start

to negotiation about HSBC Credit Cards, they need to create friendly and
comfortable atmosphere to the prospective buyer. Buyer might willing spend some
time involve in negotiate about HSBC Credit Cards. It is one of the factors that can
affect negotiation attitudes and style. In additional, educational level also is one of
the factors that can affect negotiation attitudes and style. Salesperson must be
aware of the educational level of the prospective buyer and use the most
appropriate negotiation attitude and style to cater them.

Fluid contracts

The establishments of personal relationship that brings two parties together with
common interest and allow two parties to view contracts as personal agreement
that should be changes when have any changes of condition. A change will be
reciprocated in future. However, contracts are seen in fluid. Salesperson typically
asks for concession from the prospective buyer at the end of negotiation for intends
to avoid fluid contracts occur. Salespersons of HSBC Credit Cards need to
renegotiate and redo the contract while condition is change.

Mediation

Mediation is an important aspect of negotiation stage. The function of the banking

mediation performed by bank is limited to the effort to assist the customer and the
bank to review the dispute basically in the framework of the obtaining an
agreement between the customer and the Bank. Moreover, mediator can assist in
passing any criticism and negative view through “letters of understanding” that can
state a position or demand in more blunt term than those appropriate during
conversation process. The use of mediators and informal discussion avoid potential
embarrassment that may result in loss of face.

Relationship marketing

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Relationship marketing has been emphasised by HSBC Bank in creating its brand
awareness and loyalty in Asia. As low-trust cultures in Asia, relationship marketing
is most reliable marketing strategy of HSBC Bank in promoting its products and
services. As HSBC Bank has faced stiffer and stronger competition among Asia
market and in Malaysia, relationship marketing appears to be an effective strategy
for dealing with fierce competition (HSBC Global Site, 2008). HSBC Bank has
recognised that every transaction tells a story and they need to understand that
story through analysis and action to strengthen customer relationships. HSBC Credit
Cards has encouraged its staff and salesperson to maintain good relationship
among customers for future benefits. HSBC Bank has also strived to build
relationships with other countries. HSBC Bank is continuously to conceptualise and
implement good projects that able to set trends in banking and finance industry.
The slogan of HSBC Bank, “the world’s local bank” has also suggested that HSBC
Bank is eagerly building relationship with customers in every different countries.

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CONCLUSION

Direct marketing and personal selling might not be most effective marketing
strategies for HSBC Credit Cards as it is less helpful in building brand image.
However, it will be most powerful and solid marketing strategies in building long
term relationship with customers. Despite the bombarding strategies in banking and
finance industry, direct marketing and personal selling is more beneficial for HSBC
Credit Cards as it is low costs and less risky compared to other marketing
approaches. However, it is crucial for HSBC Credit Cards to monitor and control its
direct marketing such as word of mouth. As most of organisation which perform
strong brand image such as HSBC Credit cards are tended to ignore the power of
word of mouth. Explanation and complementary advice or consultation are
encouraged to be performed to customers once negative feedbacks received.

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