A cup of cappuccino is never enough

A cup of cappuccino is never enough

Arief T. Syam, Contributor, Jakarta

The motto that "the customer is king" remains relevant to this
day. For banks in particular, customers, especially VIPs, remain
kings and deserve satisfactory services.

"As interbank competition gets increasingly fierce, customer
services have likewise gained increasing importance," said a
marketing manager of a bank in Melawai, South Jakarta.

He is able to convince customers of other banks to move their
accounts to his bank thanks to his bank's superior customer
services. Special services constitute part of the marketing
strategy of the banking industry in efforts to retain the loyalty
of "top" customers.

There are many marketing strategies that can be employed to
maintain a customer's loyalty to a bank. They range from
experiential marketing, experiential branding to customer
intimacy.

The essence of all these strategies is that a customer can be
made to always recall the name of a particular company, be
attracted to and want to try the services or products it sells
and finally become loyal to a particular service or product that
the company sells.

In the banking business, many methods have been created and
employed to maintain customer loyalty, ranging from special
discounts to the distribution of gifts to top customers. Banking
practitioners usually refer to these services as Personal,
Priority or Private Banking.

Indeed, banks cannot afford to ignore priority or personal
services. If only 10 percent of the total number of a bank's
customers are in the VIP category, these customers may account
for 60 percent of the funds managed by the bank. It is very
likely that the interest obtained from the management of these
VIP customers' funds will contribute to over 50 percent of the
bank's total profit.

That's why banks offer special services to VIP customers.
Sometimes these special services constitute added-value in terms
of a bank's image. Of course, different banks have different
names for the different types of special services.

Bank Mandiri, for example, calls its special service Bank
Mandiri Prioritas (Priority Mandiri Bank). Each Bank Mandiri
branch has a room furnished with first-class furniture in which
its Prioritas customers are attended to. Cappuccino is even
served in the Prioritas room.

A bank staff member is always on hand to attend to a VIP
customer's banking needs, and will act like the customer's
financial advisor. As such, the staff member not only offers the
bank's services but also offers input, advice and consideration
regarding the management of the customer's money.

A Bank Mandiri executive in charge of retail banking services
said VIP customers were small in number but had vast potential.

In Indonesia, about 1.5 million people earn an average of Rp
500 million a year. Some 30 percent of the total third-party
funds that Bank Mandiri managed last year came from upper-end
customers, he noted.

Besides Bank Mandiri, other local banks like Bank Central Asia
(BCA), Bank Negara Indonesia (BNI), Bank Danamon, Bank Niaga and
Bank Internasional Indonesia (BII) also provide priority banking
services.

BNI, for example, offers two products called Private Banking,
which requires a minimum deposit of Rp 1 billion (about US$105
million), and BNI Prima, with a minimum deposit of Rp 250
million. BNI Private Banking targets Jakarta VIP customers, while
BNI Prima eyes customers in the same category in other cities.

Regardless of the types of special products available, banks
generally offer facilities, flexibility and hospitality in their
private services. During promotions, financial advisors in charge
of these special services are ready to assist customers, in
person or over the phone.

What about foreign banks? Of course, foreign banks introduced
private services to VIP customers long before local banks.

Foreign banks seem even better prepared and employ a better
strategy in this respect. Citibank, which calls its premium
services Citigold Wealth Management Banking, for example, says
that every Citigold customer is served by a Citigold Relationship
Team, which comprises a Citigold executive, an investment
specialist and a foreign exchange specialist, with the support of
research and global knowledge from Citibank's international
network.

Citibank seems to suggest that these four components give
added value to its premium VIP services, which distinguishes its
special services from those offered by other banks, foreign or
local. In principle, though, other banks' financial advisory
teams are also made up of the same components.

Citigold Wealth Management Banking, introduced in 2002, is
actually an extension of Citigold Priority Banking, a Citibank
product since 1980. While Priority Banking is focused on the
provision of exclusive services, Wealth Management leans more
toward the management of a customer's financial portfolio.

"Wealth management may be considered a more detailed type of
service," said Batara, retail banking director of Citibank NA.
"An exclusive service alone will not suffice," he added.

To join a Citigold Wealth Management Banking program, a
customer must place a minimum deposit of Rp 500 million, which
entitles the customer to special services like investment and
financial management planning and exclusive Citigold Center
facilities like a safety deposit box, special merchant discounts
and invitations to exclusive events like fashion shows, music
concerts and seminars. Citibank provides this service at its
branch offices in Jakarta, Bandung, Surabaya and Medan.

Meanwhile, ABN Amro offers two wealth management products: ABN
Amro Preferred Banking and ABN Amro Private Banking. For ABN Amro
private banking, a minimum deposit of Rp 1 billion is required,
while for Preferred Banking, only Rp 500 million.

Like Citibank products, these ABN Amro premium products, which
were launched in 2001, extend a lot of facilities to customers.

Upon entering an ABN Amro office, a customer using either of
these two premium products will be treated like a king. He will
be attended to in a luxuriously furnished room equipped with
multimedia gadgets and a library. He will enjoy special services,
including discount programs at a number of outlets as well as
birthday cards and gifts. Also, he will be invited to attend
special events.

These premium customers are generally familiar with
sophisticated gadgets and the Internet. That's why Citibank has
recently made use of the Internet to approach special customers.
The bank's website allows VIP customers to gain access to all
their banking transactions anywhere, anytime.

BCA also makes use of the Internet for its banking services
through what is called "klikbca bisnis". Using this facility, BCA
corporate customers can conduct all their business transactions
through the Internet.

The launch of "klikbca bisnis" is indeed a daring breakthrough
amid the hesitation of other banks due to security concerns about
conducting business transactions through the Internet in
Indonesia. It is this particular service that has allowed BCA
banking services to excel over those from other banks.

Of course, banks making use of information technology pose a
big challenge for other banks in extending special services to
VIP customers. VIP customers of other banks have to set aside
time to visit their banks for a consultation or a transaction.
This time could better utilized if everything could be done
through the Internet.

"You can save a lot of time if your transactions or
consultation are conducted through the Internet. You can avoid
traffic jams," said Pril Husenu, finance manager of PT Mutu Agung
Lestari, a timber certification company in Cimanggis.

His company has just signed up for the BCA klicbca bisnis
facility. "It is difficult to save time in Jakarta. If we use
klikbca bisnis we can save time that would otherwise be wasted in
traffic jams," Pril said. Of course, it will take time for him
and his staffers to get used to making transactions through the
Internet.

A luxuriously furnished room and a cup of cappuccino may not
make up for the time that a VIP customer has to waste on his trip
to the bank. Obviously, a customer would be happier to save time
and conduct business transactions or consultation through the
Internet.

Still, it is believed that a face-to-face meeting in a
business consultation is preferable to communication through the
Internet.

It all depends on a person's personality in conducting
transactions. It must be noted that recently another approach
known as knowledge-based management (KM) has been introduced.

What BCA and Citibank have done with their Internet services
is part of this KM approach. This means that a company must be
innovative in offering its products and services.

How to create an effective private banking service? The
Internet may be one solution. However, words on a computer or
cell phone screen can never replace a face-to-face meeting.

Would virtual communication through a webcam or a cell phone
camera be the best solution?

Whatever the solution, business players would certainly prefer
to have both luxury and facilities without losing the human touch
even if a tete-a-tete is conducted only through a computer or
cell phone. (The writer is a freelance financial journalist based
in Jakarta)