State Bank of India: “SMS Unhappy”

State Bank of India: “SMS Unhappy”

Based on the case study by Rishtee Batra and Piyush Kumar

State Bank of India: SMS Unhappy, is a deceptively simple, but comprehensive case of a public sector company using a customer complaint management tool as a catalyst to improve overall service performance and overtaking even its private sector competitors in terms of both customer satisfaction and organizational performance. The case describes a novel, mobile phone-based complaint redressal system designed and implemented by Shiva Kumar, chief general manager (South) of the State Bank of India (SBI).


As Chief General Manager (South) of State Bank of India (SBI), Shiva Kumar had launched a novel customer complaint management program dubbed “SMS Unhappy” in the southern state of Andhra Pradesh. It was a breakthrough initiative in customer complaint management, aimed at dramatically reducing the time it took to respond to customer grievances. The complaint resolution process in some of the best-run branches of competing banks took between 10 to 12 days, whereas SBI branches under the SMS Unhappy program often managed to resolve issues within 24 hours. SBI was ranked number one in Hyderabad, the capital city of Andhra Pradesh, in a customer satisfaction survey by Hindustan Times, a leading national newspaper. It beat its nearest rival by nine points. Shiva Kumar’s four-member SMS Unhappy team had satisfactorily handled over 7,000 complaints in a span of just five months.

In December 2010, recently promoted to the position of Deputy Managing Director, Shiva Kumar contemplated the next step in the evolution of the SMS Unhappy program. While the early results from Hyderabad were encouraging, he wondered whether further testing of the concept was necessary before a potential national rollout.

State Bank of India

The State Bank of India was a mammoth in the Indian banking sector, with 13,000 branches, and close to 17,000 branches if one included its subsidiaries. The management of such a huge entity was challenging, and nine levels of hierarchy existed between the officers and the chairman. This excluded the clerical staff of the bank, which formed 27 per cent of the workforce. Senior management composed 11 per cent of the bank’s staff. SBI followed a top-down approach, with its 610 senior managers meeting twice a month to monitor progress and decide on major issues.

Prior to 1991, only a few banks operated in India and most of them were nationalized. Thus, SBI had a near monopoly with limited competition. However, once the banking sector was liberalized in 1991, private banks entered the market and wooed the customer with potentially better services and facilities. SBI was able to rise to the challenge from the private sector because it had always been a forward-looking organization with a propensity for continuous improvement deeply embedded in its cultural DNA. Ever since its inception, SBI undertook several product, service and organizational remodeling initiatives.

In 2006, SBI appointed O.P. Bhatt as its new Chairman, an SBI veteran of 34 years. He encouraged employees to bring about changes that would help SBI become successful in the present day. He initiated a campaign called “Parivartan,” which meant “transformation” in Hindi. Bhatt’s “intervention program” aimed to reach out to 200,000 employees in 100 days and obtain their buy-in. The program was a success and generated an enthusiastic response from SBI’s senior leadership. Following the hugely successful Parivartan program, SBI launched “Citizen SBI” in 2009 — a program aimed at promoting proactive customer engagement, and orienting the organizational mindset towards customer fulfillment. Another sequel to Parivartan was “Udaan” (meaning “flight”) which targeted employees on the frontline.

SBI built robust IT infrastructure to support back-end operations. It invested in ATMs across the country. It also introduced personal banking with more personalized customer service and Vishesh (meaning “special” in Hindi) banking services for high income individuals. SBI began to focus on areas such as treasury and financial markets, international banking, relationship management and other non-banking financial services, such as insurance and mutual funds. It also started a rural business group to extend its reach into India’s rural areas. It created a division to look into new opportunities in financial services and enable SBI to keep abreast of the latest developments. The bank renewed itself not only in spirit, but also in terms of its physical facilities. The branches were overhauled and modernized, with new furniture, glass panels and customer-friendly layouts.  SBI also hired J. Walter Thompson, a leading advertising agency, to promote its newly improved banking services to Indian customers.

SMS Unhappy

Shiva Kumar shared this enthusiasm for effecting change and gave vent to this spirit of improvement within his purview of control. He knew that public sector banks in India sometimes suffered from red tape and excessive paperwork. In particular, he was troubled by the inadequacy of the existing mechanism to initiate complaints and realized that it needed to be improved to meet customer expectations. Shiva Kumar saw an opportunity to develop a completely new system that would be paperless, easy-to-use, fully automated and requiring minimum human interface. He first conceptualized the system when he was posted as General Manager in SBI Lucknow, in the northern state of Uttar Pradesh. He worked towards upgrading the service to a web-based system during his subsequent tenure in Bhubaneswar, in the eastern state of Orissa, and ultimately shaped it into its current, fully-automated form in Hyderabad. The initiative was officially launched in the Andhra Pradesh (AP) circle on December 11, 2009.

In its fully developed form, SMS Unhappy was a simple way for consumers to try and resolve their complaints with SBI. A customer facing any problem with the bank merely had to SMS the word “Unhappy” to a toll-free number, 800-820-2020. The bank would then call the customer back within a maximum of 48 hours. In contrast to other complaint management models that relied on basic call center-based operations, SMS Unhappy complaints were routed to a senior bank official at SBI. The 48-hour call back deadline proved to be a conservative one during the test phase, with several reported instances of customers receiving a return call from the bank even before they left the branch from which they had sent the SMS.

SMS Unhappy Operations

The SMS Unhappy initiative was launched in Andhra Pradesh within 14 regional circles comprising of 14 million customers across 1,100 branches of SBI. The service was extremely easy to use in a state where mobile phone coverage reached 50 million people out of a population of 76 million. It was a fully automatic and centralized system developed end-to-end by the in-house IT team. SBI invested substantial resources to publicize the SMS Unhappy initiative through advertisements in popular national and regional dailies, banners in all branches and large billboards across major intersections and highways. The central hub, or nerve center, of the entire complaint management system was the “Happy Room,” situated in the local head office in Hyderabad and manned by senior officials from the bank. The controllers at the Happy Room coordinated with the different branches to ensure that the complaints were addressed satisfactorily.

Prior to SMS Unhappy, the AP region of SBI received an average of 1,600 complaints per year. However, in the 11 months following the launch of the program, the number of complaints went up to 22,209. Of these, 21,805 were addressed as committed and brought to a satisfactory closure.

National Rollout

Shiva Kumar was glad that his vision and perseverance had begun to pay off and that the SMS Unhappy experiment was proving to be a huge success in AP. Yet, he contemplated its impact and long-term consequences if it were rolled out throughout the SBI system across the country. Bhatt was keen to move ahead with a national scale-up of the initiative and cover all the telecom circles. SBI, thus, worked towards the official launch of the system in the beginning of 2011. A fully operational system would need to be implemented across 12,500 SBI branches with 200,000 employees and potentially cater to 150 million customers.

Shiva Kumar mulled over some of the ramifications of a national roll-out. Was SMS Unhappy a double-edged sword? If the bank made it very easy for customers to complain, would they raise frivolous issues without a second thought? With an enormous customer base, how would SBI deal with a potential deluge of SMS Unhappy messages? Would the existence of SMS Unhappy become the source of complaints itself? There were issues relating to the marketing of the initiative as well. What would be the implications of launching a national promotional campaign?

Clearly, the program would raise the bar in terms of customer expectations from the bank. Once complaining customers had their issues resolved, they may not feel the need to resort to that channel again. In that case, how would SBI maintain its customer-centric momentum? The larger question was whether it was better to focus on customer satisfaction or to reach out to new customers through an expansion of the SBI branch network. The limited rollout in Andhra Pradesh required only four experienced bankers to serve SMS Unhappy customers. If the program was widely available, there would be a need for a larger pool of experienced bankers. Would the cost be justified when compared against more traditional call centers that were manned by recent graduates?

Shiva Kumar also gave considerable thought to how he would measure the impact of the program. Customers whose complaints were resolved would be satisfied. However, would they be the most profitable customers for SBI? Should SBI consider differentiated offerings based on customer profiles instead of one complaint management system for all? Questions about the culture within SBI also preoccupied his mind. Could SMS Unhappy somehow serve as an appraisal tool? Would it lead to SBI becoming a more customer-centric organization?


“State Bank of India: SMS Unhappy.” Indian School of Business case no. ISB001 (Indian School of Business, February 2013). Harvard Business Publishing.


Rishtee Batra is Assistant Professor of Marketing at the Indian School of Business.

Piyush Kumar is Associate Professor of Marketing at the Wharton School of Business/ Terry College of Business, University of Georgia and Visiting Professor at the Indian School of Business.



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