The Power of Gold

A few months back I received a “gold” card from my bank. A letter accompanying this card mentioned that “…I am being accorded a gold customer status… this entitles me to a separate counter at the branches and faster service…” and a whole lot more (but we will not go into it since it is immaterial for this post).

The communiqué stated that I am being accorded the gold status since I have maintained an average balance of Rs. x (amount withheld on request ).

Thereafter, quite a few times, my balance has fallen below Rs. x. But I am going to cover this scenario in a future post.

I found out that anyone and everyone who has maintained an average balance of Rs. x was accorded the gold status. This is supposed to be a “loyalty” scheme.

Something just did not seem right here. There seemed to be no consideration of the behaviour of the customer. I earn around Rs. 5x. Most of the money is pulled out and put in investments not controlled by this bank. Consider, another person, who earns, say 2x and maintains it entirely with the bank.

Who is a more loyal customer of the bank?

My take in on this other person. He has a greater commitment towards the bank. In my case, the average amount crosses Rs. x since there is a delay between my salary getting credited to the bank and my identifying an investment opportunity to put it into.

The bank needs to have two different schemes in place. The current loyalty scheme of a “gold customer” is appropriate for this other person.

I would rather have the bank thinking on how to hold on to the Rs. 4x which I pull out of my account. In short, the bank needs to look at the percentage of earnings being maintained with the bank and accordingly launch a campaign attracting me to various offerings of the bank … including gold. That would be the power of gold.