Unbelievable

Given a chance, it seems most Filipinos wouldn’t mind being given another television set.

"The TV ranked second among the items that our survey group wanted to have," said HSBC (Phils) senior vice-president for marketing Suresh Nadoo. "We took that insight and tied up with like-minded Samsung Phils. for a campaign that is so different from the usual raffle, where only a few end up as winners."

In the two-month promo called "Unbelievable Gold" that is ongoing until the end of June this year, HSBC is giving away a 17-inch Samsung TV to each approved Gold cardholder. Gold comes in two forms. The Gold Visa requires an applicant to have an annual minimum gross income of P480,000 while the Mabuhay Miles Visa Gold has a higher P1-million annual income requirement.

"This is an underserved market. In the Philippines, only 20% of the industry’s card base of two million have Gold cards compared to other Asian countries such as Singapore, where Gold accounts for 30% to 40% of the market," said HSBC deputy chief executive officer and head of personal financial services Martin Cook.

Based on data from the Credit Card Association of the Philippines, HSBC has the fourth largest card base at about 500,000. Within VISA, the bank claims to have the fastest-growing base, with the highest average spend or purchase per card in the fourth quarter of 2004 and in the first quarter of 2005.

"Our objective is to outperform the market. We can do this by targeting the right people for our cards," said Cook.

Up Front

There are three conditions that must be met by the card applicant before the free TV set is delivered to his/her home.

First, the applicant must agree to pay an annual fee for two years. For Gold Visa, the annual fee is P2,400 for a total of P4,800 over two years; for Mabuhay Miles Visa Gold, the annual fee is P3,000 for a total of P6,000 over two years. Should the applicant fail to pay the annual fee for the second year, the full price of the TV set is charged to the applicant’s credit card.

Second, the applicant must activate the card within 60 days from June 30 or by end-August. Third, the applicant must accumulate P3,000 worth of purchases within 90 days from June 30 or by end-September.

"We wanted to keep the promo mechanics simple. Everything is explained so there will be no future misunderstanding," said Cook.

As an added incentive, the promo has a TV upgrade mechanism, which allows a card applicant to upgrade his/her set to up to the 29-inch model that retails for P27,995. The card applicant can charge the upgrade at zero interest. Even better, the upgrade automatically means a waiver of the first-year annual fee of the applicant and is considered compliance for the minimum P3,000 spend requirement.

"With this promo, which is mainly open to new-to-bank cardholders, we expect card applications to go up by 300%. Gold will not be the first credit card of most applicants but, over time, we hope that it will be their card of choice. This is, after all, a business of relationship-building," said Nadoo.