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Jed Clampett would be pleased: by planning exclusive events and special recognition for wealth management customers, banks can voice their thanks as well as facilitate valuable word-of-mouth referrals. Here's a sample of appreciation programs at three different financial institutions.

Tank you wealth management customers. We love you!

Most banks are too dignified to come out say things like that. But almost all financial services institutions express their appreciation to their best customers--those well-heeled people whose financial activities result in a disproportionate high contribution to the bank's bottom line.

Not surprisingly, banks have discovered that structured appreciation programs are smart business. Not only are these efforts a thoughtful way of saying "thanks," but an effective program can stimulate referrals that grow more income.

The scope and depth of efforts vary from institution to institution. We present here profiles of three programs run by banks in different parts of the country. Listed are samples of some of the special trips, events and gifts and other things that these banks provide to their most esteemed customers.

Put Me on the Waiting List

First National Bank & Trust (FNBT), Stuart, Fla.

Being a part of a select travel group has a great deal of appeal to the private banking clients of FNBT. In fact, the cachet of going with the Bank's Passport Elite program to Costa Rica generated so much interest that some clients had to be put on a waiting list. "Many of our clients are so satisfied with our program that they encourage their friends to come along--which means their friends must bring their business to us to become a part of the program," says Tom Hall, senior vice president of private banking.

That's just the kind of word-of-mouth marketing that Hall is hoping for--the kind in which satisfied clients encourage friends, acquaintances and business associates to switch to the bank and to stay.

The Passport Elite program (deposits of over $1 million) and Passport program (deposits of over $300,000) have helped increase the number of private banking households from 600 to 1,000 over the past few years. The fourth-quarter results of 2004 showed deposits up 15 percent, financial services income up 8 percent, and loans up 5 percent.

"We use this event-based program as a marketing tool and a way to add value to our most profitable and potentially profitable client relationships," says Hall. By providing the very best in travel programs and accommodations, Hall wants his clients to recognize that the bank gives the same attention to detail to its financial services products and services.

When the program was launched originally more than 20 years ago, it was targeted more narrowly toward retired women. The events included :in annual holiday fashion show at a deluxe hotel, luncheons and trips.

About seven years ago, Tom Hall was hired to redesign the program. The bank had realized there was a much broader wealthy demographic (such as corporate real estate, commercial and small-business divisions) that also could be well served by an elite program, so Hall set to work. Now the program is designed to appeal to all ages, men and women, professionals and retired clients. The programs even reach out to families.

That's why, in recent years, the number of people participating in family weekends at Ritz-Carlton locations, charity fashion shows at The Breakers, and theater trips to New York have tripled, quadrupled and more.

"At one of the first travel functions we sponsored [about six years ago] there were 32 people--mostly retired--and a few young physicians. At first, the retired clients wondered why the younger people were along on the trip, and possibly wondered if they had the level of assets required to participate in the group," Hall recalls. "Six years later, that same annual outing draws 240 people, including 50 children, and the interaction is wonderful. There are grandparents and their children and grandchildren all dancing together during our evening dinner and dancing party. Everyone is a part of the action now. It's even evolved to the point where the expectation is that the event will be multigenerational."

Hall is personally and enthusiastically involved in the details and development of both the Passport and Passport Elite programs. Working closely with four members of the bank's marketing division, he develops the programs, identifies the dates and destinations, and decides on events to be held on-site. Hall and the marketing director welcome suggestions from clients and from other bank officers. He and the marketing team work on the program at least 18 months ahead of time and are currently well into the 2006 planning stage.

A supercommunity bank

First National Bank has assets of $1.3 billion and calls itself a "supercommunity bank." With 28 branches in four counties, the bank says it has generated "a solid presence" among the retired wealthy as well as the affluent young professionals in the area.

"We define private banking differently than other banks and regional banks," says Hall. The bank allows some flexibility in the asset minimums if a client exhibits strong potential for future profitability, such as having substantial assets in the real estate or commercial lending divisions, or with another institution, says Hall. "A young physician who barely meets today's minimum, but who will clearly increase in potential in the future may be invited to work with our private banking division."

Since the clients pay their way on these expensive trips and have significant assets, what is the advantage of going on a bank trip instead of organizing their own? There are two reasons, says Hall. First, the bank organizes the entire event--books the hotel rooms; organizes special dinner and cocktail parties, and even children's events; plans events like tennis tournaments or golfing times; and, secures travel reservations if necessary. The client just writes one check, and the bank handles all the details. Since First National attends to everything and the destinations are premium sites that clients may not have access to on their own, clients come to expect a high level of service and a rewarding experience. The bank provides a dinner and a cocktail party at its own expense, plus amenities in the rooms--coolers, stadium blankets, backpacks, and other items that have the bank logo on them.

The second reason is that customers enjoy the special networking opportunities offered by the trips. "They really enjoy networking with people who have the same interests as they d() and are at the same economic level," says Hall, "and they like being able to say they played 18 holes with our chairman, and had dinner with the bank president. There is definitely an exclusive cachet to our program and our destinations."

The two programs are so popular that sometimes Hall has managed to grow a Passport client (at the $300,000 and higher level) to the Passport Elite level ($1 million and more) just to enable that client to participate in a Passport Elite program. The key to the programs' success is "going with a very high-quality property: make sure the details are all attended to; include executive officers; and invite a range of people to come [within the asset brackets]," says Hall.

Tracking the profitability

Every year in September, Hall sends the bank's private banking clients within the two ranges a letter welcoming them back to another year with the private banking division and announcing the Passport and Passport Elite programs for the coming year. They are invited to a season preview and luncheon in November to hear about the trips and events the bank has planned. "As with all our events, a senior officer gives a brief talk about the strengths of our private banking program and the unique culture of our bank," says Hall. "I also address the group in November. There is never a seminar or lengthy presentation at our events. It is all soft sell. We always have members of our executive staff at each event to network with our clients, answer their questions, and just get to know each other--on the golf course, for instance." There is one critical element that can't be overlooked, however: "We always ask for the business, though. You have to close the deal. These opportunities provide a wonderful way to interact with the client, but you can't just host the event and then not follow up."

The program is not heavily advertised or used as a way to attract clients. Instead, the sales manager talking with a potential client introduces the program as a way to add value to the proposed banking relationship. There is marketing collateral available, but it is not distributed widely, just at the point of sale to the client.

Hall has tracked the households that participate in the programs and has found that the income derived from the participants more than covers the costs of the programs.

For example, a special event targeting affluent men is held each year at Morton's Steakhouse. The bank requests that each client bring a guest who would qualify for the services of the private banking department. Approximately 50 men attend the lavish dinner. The chairman of the bank gives a five-minute overview of the bank and its culture followed by an executive officer who talks for no more than five minutes about the services the bank can provide. Each table includes one bank officer. Hall reports that the dinner costs $5,000 but points out as an example that the recurring annual fee income the bank now earns from one referral exceeds $18,000.

Referrals come from many sources

Clients are an invaluable source of referrals. "Many clients want their friends to come along on these trips and refer them to the bank so they can participate," says Hall. "We also value clients who are influential people in the community who may provide valuable contacts in the future."

Some clients don't participate in either the local events or the travel opportunities, says Hall. "We do follow up with those clients, and encourage them to come along. For some, travel is just not an interest of theirs, but in some cases, we've persuaded them to come, however reluctantly, to a local event. They've found they enjoyed it so ninth, they've started coming to many of our events."

"We believe our programs have helped to put us on the map as a player in the private banking business."

We Love Everybody (And Not Just the Rich Folks) Peoples State Bank, Many, Louisiana

Special recognition to valued customers does not have to be reserved only for customers with the highest balances. Some banks offer customer appreciation programs for other customers as well. An example is Peoples State Bank (assets: $246 million). Each year, the bank tries to hold some kind of customer appreciation event in each of the five parishes (counties) that it serves. "It depends on the location, but generally this event is for the 80/20 list for that particular area," says Tori Flynn, the institution's assistant vice president. "We rent a restaurant and host an informal program just to express our thanks. We have door prizes and give-a-ways for all who attend."

Another type of recognition reserved for the bank's very important person (VIP) loan and deposit customers is an annual holiday gift, which varies from year to year. "For example, for Christmas in 2004, we gave our customers pecan samplers from a local plantation. In 2001, we sent those customers sweatshirts and that year we also sent Carhartt jackets to our agricultural customers." Flynn gathers the list of customers from the loan officers "and then I pull our 80/20 list and take those customers with 10 percent or more of the deposits."

Beyond the programs designed for the 80/20 set, the bank also offers travel opportunities through Travelin' Friends, which is the name of the trip program organized by the bank. You do not have to be a bank customer to go on one of the trips, and the bank offers discounts to seniors (age 50 or older). "In fact we usually 'win' the noncustomers over with all the fun!" Flynn says.

The trips go to a variety of destinations and are open to all who are interested--without any age or deposit restrictions. Trips for 2005 include a February cruise to Mexico, Panama, Costa Rica and the Grand Caymans: an April trip to a five-star dude ranch in West Texas; a thirteen-day cruise in June to Alaska; and an October trip for nine days to Tuscany, Italy.

In addition to the travel program, the bank has "tickets to local college football, basketball and baseball teams as well as the occasional bowl game that can be used," says Flynn.

While the bank has not done any studies on the correlation between increased deposits and the appreciation programs, Flynn says that, in general, "We do gain deposits from our travel group and community involvement." And while she has not formally measured the success of their program in terms of added clients or increased profit, Flynn says, "Being in rural area, word of mouth works wonderfully when the information is positive. We are located in a retirement area, so our customers may be transplants and looking for friends and fun. The Travelin' Friends program has worked the best."

Sporting Events, Concerts and Exclusive Parties American Trust & Savings Bank, Dubuque, Iowa

American Trust & Savings Bank (assets: $630 million) believes all clients deserve the special attention one expects from private banking. "Due to the size our community, we try not to label our bank as anything other than a community bank," says Peggy L. Hudson, CFMP, senior vice president, "however, since "trust' is part of our name, that helps position us as having a wealth management specialty."

To show its appreciation to its top 100 platinum-status clients (those who fall in the top 5 percent most profitable clients and those with deposits of at least $100,000), the bank purchases and gives away season tickets for the Iowa Hawkeyes and the Green Bay Packers. "We give the Iowa tickets to our best clients along with preferred parking passes to the games. As for the Packers, we send our best clients to the game and back in our bank jet," says Hudson. A senior bank official or the chairman of the board tries to attend these events as well.

The financial institution also sponsors biweekly concerts from June through September at the local casino. The bands have been big names from yesteryear (60s, 70s, 80s, 90s) Chubby Checker to Taylor Dane. Hudson says, "We get a block of tickets for the best seats for our sponsorship and give those tickets to our clients."

The bank hosts luncheons and exclusive cocktail parties at the top of its downtown building, which is tied for tallest in town and has a country-club like penthouse with a 360 degree view.' of town, including the river bluffs of Iowa, Wisconsin and Illinois, plus the river itself. "These events aren't advertised, but word gets around," says Hudson. "Then clients start to ask to participate."

The biggest event of the year, however, is the bank's elegant and very exclusive holiday party for its best commercial and wealth management clients. "This party is the best in town, and people call us midyear for the date to ensure they don't miss it. Not everyone is invited, though," says Hudson, and that cachet is definitely part of the allure. "No expense is spared, and it's the best investment we make in our brand."

Tanja Lian Sablosky is a former editor of ABA Bank Marketing magazine. She writes from Herndon, Va.
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Title Annotation:Customer Appreciation
Author:Sablosky, Tanja Lian
Publication:ABA Bank Marketing
Geographic Code:1USA
Date:Mar 1, 2005
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