beating the competition : differentiation by “market ... · 1 beating the competition :...

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Beating The Competition :Differentiation by “Market Making”

Innovation in Payment Systems

M. Tunç DAŞARCFO. Garanti Payment Systems

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The Market and Garanti

GARANTI1st largest private bank 6+ mio customers, $52 billion in assets, $1.34 billion net profitExtensive ADC usageInnovator culture

TURKEYPopulation: 73 mio, Economic growth: 5 % Young Population, Open to change

GARANTI CARD BUSINESS•2nd largest credit card business , 22% market share•7.5 mio credit cards, 5.1 mio debit cards•329,874 POS, 2.587 ATMs•$28 billion charge volume, $5.1 billion receivables•$30 billion acquiring volume, $13.5 billion debit volume

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Touch of Every Segment by a Different Innovative Product

shop&miles

Flexi

Bonus

Amex

Debit & Prepaid

Card FeeInterest Rate

Limit

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Always the first mover...

1st Bank to implement :Loyalty-based installment credit card programme in Turkey (Bonus

Card)Multi-branded chip-based credit card in Turkey (Bonus Card)Official air miles in Turkey by Turkish Airlines (Shop&Miles)Extended loan limit on a credit card in TurkeyCorporate & Distribution cardE-commerce Virtual card in TurkeyLicensing partnership with another bank in TurkeyIn Turkey and one of the 1st in the world to adopt full EMV-chip credit

card technologyFlexible card enabling customers to create their ideal credit card (Flexi)

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Two stories...

Bonus CardFlexi

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Bonus CardStory of free shopping in Turkey

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Imagine...Everything on store cards..

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Imagine...Everything on co-branded cards...

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Imagine...“instant credit” at the point of sale

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Available to you everywhere

... To name a few

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With the very strong communication of “the message”

With the very strong understanding of “the customer”

With the very strong existance of “the merchants”

How...

With “the” state of the art “technology”

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* & a unique reminderobject “a big black wig”...

* distinct color ... The Bonus Green

* a distinct music...

“The message”

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“The message”

“EARN AS YOU SPEND”

“THE CARD THAT GIVES THE MOST FREE SHOPPING”

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Merchandising and GiveawaysBranding...

“The message”

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Cinebonus

“The message”Branding...

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Sponsorships...

“The message”

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Outdoor Bonus Branding...

“The message”

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Local Bonus Events...

“The message”

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ExternalizationExternalization InternalizationInternalization

““TheThe CardCard thatthatgivesgives thethe mostmostfreefree shoppingshopping””

CustomerReflection: ““thethe commoncommon

ll ””

Culture:innovativeinnovative, , leaderleader, , dynamicdynamic

Self-image: II amam clevercleverandand spendspendmymy moneymoney in in aa smartsmart way.way.

Brand physique: brightbright greengreen, , wigwig, , plusplus signsign, , jinglejingle

Personality:CheerfulCheerful, , youngyoung, , dynamicdynamic, , energeticenergetic

Relationship: buddybuddy, , reliablereliable

“The Customer”

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Message of Sales at every touch point to the customer

“The Customer”

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AdvertisesBonus Plusand BonusPremium

Advertises“Choose 3

stores”Campaign

Envelopes“The Customer”

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Monthly Bonus Flash

“The Customer”

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Permission-bases segmented e-mail & SMS

Bonus Card has a specialOffer for you at VAKKO! 50%Discount + 5 installments or

Additional 10% off!

Garanti also gives the option toCardholders to receive sms messages informing them ofCurrent and upcoming Bonus

Campaigns.

“The Customer”

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Bonus.com.tr

LearneverytingaboutBonus

Campaignsto earnextra bonusfrom thebank

Rotatingcampaigns

InternetBranch

InternetApplication

ImportantMessages

“The Customer”

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Important Messagesfrom the Bank

Spending CategoryPie Chart

• Total bonusearned

• Bonus earnedthis spendingperiod

• Bonus spentfor freeshopping

• Remainingbonus

BirthdayCelebrationMessage

Merchant Logos

Campaigns areplaced next to the

appropriatemerchant

Smart Statement“The Customer”

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Amountof Bonusavailablefor free

shopping

POS Receipts

“The Customer”

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Cover of ApplicationForm

Sign up afriend and

earn 5Bonus!

“The Customer”

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The team was formed in 2005 to closely monitor our growingcard portfolio to:

* Increase customer loyalty and activation with personalized 1-to-1 activities

* Monitor customers’ card life cycles to make offers like limit increases, upgrades, new product upsells, etc.

* Minimize customer attrition and create more loyal customers

Achieved an average of 300.000 customer touches/monthwith a total of more than 50+ campaigns covering activation, card acquisition, retention and limit increase activities.

Portfolio Management...

300.00050+ campaigns

“The Customer”

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The Portfolio Management - ActivationFree “bag theft” insurance fornever actives: 12 monthinsurancecoverage for a 3 month spendingcommitment• Customers: 44,666 • Response rate: 18%• Increase in spend: 17%

Hokus Bonus = Aimed at low volumecustomers. 1 month spendingcommitment with extra Bonus rewards• Customers: 135,125 • Response rate: 91% • Increase in spend: 39%

50 Bonus New Year’s gift = 50 YTL Bonuspre-loaded to low activity card accountsand a 500 YTL spending target provided• Customers: 1,001 • Response rate: 84%• Increase in spend: 23%

“The Customer”

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Bonus MVP’s #1 = 2 Cinebonus tickets tothe highest bonus earning customers who’vebeen cardmembers for at least 2 years• Customers: 1,134 • Response rate: 99% • Increase in spend: 7%

Bonus MVP’s #1 = Free Turkcell airtime(25min) or kontor (100) to the highestbonus earning customers who’ve beencardmembers for at least 2 years• Customers: 3,468 • Response rate: 99%• Increase in spend: 5%

The Portfolio Management - Appreciation“The Customer”

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“Talking Card”: Also aimed at recentinactives who were previously active• Customers: 2,500 • Response rate: 43%• Increase in spend: 10%

“Dust Mitt”: Aimed at recentinactives who were previously active• Customers: 15,000 • Response rate: 75%• Increase in spend: 10%

The Portfolio Management - Research“The Customer”

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Further increasing loyalty - Plus & Premium

Collect 75 Bonus in 12 months to reach Bonus Plusstatus

Collect 150 bonus in 12 months to reach BonusPremium status

Activity Rates:

Bonus Standard: 75%

Bonus Plus: 83%

Bonus Premium: 90%

“The Customer”

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Merchants as a Marketing Tool

1. Merchant-specific campains

2. Instant sales finance

3. Instant card application

4. Payment pointBonus is all about capturing the retail transactionat the point of sale.

TrxTrx

“The merchants”

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Multi-branding rather than co-branding…BONUS CARD PARTNERSCAN HAVE THEIR LOGOS ON THEIR CARDS

“The merchants”Marketing Tool for The Merchants

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“The merchants”-Point of Sale Existance!!!

Your Cards...Your P.o.S......And MAXIMUM BENEFIT...to CUSTOMERS, to MERCHANTS and to The BANKThe BANKMERCHANTSCUSTOMERS

MAXIMUM BENEFIT

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POS Newsletter, Merchant Statement & Envelope

“The merchants”

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Bonus Academy“The merchants”

Education platforms for merchants

Guy Kawasaki

Martin Lindstrom

Jack Trout

Ultimate customer satisfaction in every platform...customer satisfaction

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Customer Expenditure & Demographics by storeBonusloyalty.com

“The merchants”

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“The” state of the art “technology”

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Why EMV Infrastructure & Chip Technology

•Allow secure off-line transactions•New Issuance opportunities

•Stronger risk management• Small ticket

•A must to bring added-value

SAFERPAYMENTS

MOREPAYMENTS

ENHANCEDPAYMENTS

SMART CARD

•Reduce Fraud management Cost

2005 2006 2007 2008

Volume

Fraud


42... Thanks to the Chip technology

Almost one to one marketing!Tailor-made campaigns for 6 million cardholders

* According to frequency of visit

* According to total spending

* Frequency + spending

* Cross-sell campaign

* Product based campaign

* E-purse


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Applications at P.o.S.

* Payment point.* Utility Payment Point* Debt Transfer* Distribution Card* Shared P.o.S.* Multi-Merchant P.o.S.* Multi Currency* DCC (Dinamic Currency Conversion)* Remote Booking System* Loan Application* Instant installment based on

customer preference


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PayPass™


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PayPass in Public Transport – Benefits•Drive PayPass usage in transit and retail and reinforce top-of-wallet effect•Natural target environment for an LVP solution•Co-branding opportunities•Counter disintermediation threat from transit operators•Drive services (e.g. RePower, OBO) and processing revenues (i.e. see all transit transactions)•New business opportunities (process non-payment transactions)

Launched in May 2007Bonus Trink cards can be used

inAll municipality buses in the

city120 buses

1st in in Europe

Will be launched in Aug. 2007Bonus Trink cards can be used in allmunicipality buses in the city100 buses

Will be launched in Sept. 2007New city cards will be implemented ( contact +

contactless)Interface in transportation and tourism areas150 buses, 700 mini-buses and 3.750 taxsi in the city.

ÇANAKKALE SAMSUN ANTALYA TAXISEA

TRANSPORT


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With the state of the art technology, EMV facility & Contactlessenhangement two more customer solutions

...& more

OGS KGS* Faster & more convenient than convetional methods ( coins, tickets & tokens )

* Reduces toll plaza delays & traffic congestion

* Enable to earn rewards based on loyalty program ( automatic payment inst. on cards )

ogs & kgs

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PayPass™“The state of art technology”

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Licensing BONUS Card

• Contributes to ourbrand awarenessand advertising

• Generateslicencing andfee income


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Are u still not satisfied as a customer ? ? ?

...then this is for u.....

Do u wanna more innovative products ? ? ?Do u wanna more freedom ? ? ?

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Flexi allows customers to choose their:

Product Features

* Interest rate* Reward rate

* Card fee

* Campaigns* Redemption type* Card design

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Create Your Own Card1- CHOOSE YOUR SECTOR / CHOOSE YOUR REWARD

3- REWARD FOR THE HIGHEST EXPENDITURE ON YOUR STATEMENT

4- INSTANT REWARD WHENEVER YOU WANT

2- CHOOSE 3 FIRMS / CHOOSE YOUR REWARD

1. Choose your campaign

2. Choose your financial parametersInterest rate: %3 %3,5 %4 %4,5 %5 %5,5 %6 %6,5 %7 %7,5 %8

%0 %0,1 %0,2 %0,3 %0,4 %0,5 %0,6 %0,7 %0,8 %0,9 %1 %1,1 %1,2 %1,3 %1,4 %1,5Reward rate:

Card fee: 5 TL 7,5 TL 10 TL 12,5 TL 15 TL 17,5 TL 20 TL 22,5 TL 25 TL 27,5 TL 30 TL

Spending Commitment: 500 TL

Statement type:

Additional Services:: InsuranceAssistanceConcierge

600 TL

E-mailPrint

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With Flexi, the customer has the control

* Fully customizable credit card

* Involves the customer in the entire process of card creation

* Tailor made card with over 9000 different financial combination possibilities

* Infinite number of card design possibilities

* You can create your own campaign, and it never expires!

9000

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Flexi Clipart Gallery

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Flexi – Create Your OwnCard Design• Customers can choose a card design from our clip art gallery

• Customers can upload a photo of their choice to be used as the surface of their card

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1999 2008 Change %

Number of Credit Cards(x 1,000)

ISSUING Volume(x 1,000,000 USD)Number of P.o.S.(x 1,000)

ACQUIRING Volume(x 1,000,000 USD)

672 7,502 1,017%

167 30,114

3 times more then the market

17,965%

25 327 1,229%

473 32,108 6,690%




Facts & Figures

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Pillars of Success• Strong branding & communication of “Message “• Solid customer focus...

– Position your product correctly in the market– Taking care of the customer needs– Create new categories instead of competing

in existing ones• Tremendous focus on merchant

relations...• State of The Art Technology...

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+ BonusBusiness

+ BonusBusiness

+ BonusTransportation Card

+ BonusTransportation Card

+BonusCard+BonusCard

+Flexi+Flexi

+ BonusTrink!

+ BonusTrink!

+ Prepaid cards+ Prepaid cards

+ BonusGift Card

+ BonusGift Card

+ Payment points + Payment points

+ BonusAcademy

+ BonusAcademy

+ Bonus Enviorenment+ Bonus Enviorenment

+ Bonus Mirror+ Bonus Mirror

+Bonus

licensing

+Bonus

licensing+ Bonus

loyalty+ Bonus

loyalty

+ Bonuslottery

+ Bonuslottery

+ BonusVirtual

+ BonusVirtual

20002000

2002200220032003

2004200420052005

2006200620072007

20012001 + FiloCard

+ FiloCard

+ Bonus Cardchip reader

+ Bonus Cardchip reader

2008+2008+

+ BonusTrink!

watch

+ BonusTrink!

watch

+GRP+GRP

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THANK YOU

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