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)