Winning Customers: Concierge Services

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The dilemma persists despite a bevy of time-saving devices: You've got your cell phone, your microwave, the drive-through window at McDonald's ... so many little amenities designed to save time. So why is it that Americans still bemoan the fact that "there aren't enough hours in the day?"

Whatever the reason, more and more time-starved people are turning to concierge and errand-running services to help them get a handle on their lives. Today, research shows, Americans are working longer hours, so these "helper" programs can be expected to gain in popularity.

Financial institutions, card companies and issuers in particular, were quick to spot this emerging trend and establish initiatives to offer concierge services to their customers. Although individual programs vary in degree of functions offered, all have one thing in common-a concierge service can help gain and retain customers.

But banks can't do everything on their own. Enter companies like VIPdesk. The vendor, which boasts online, and soon wireless concierge service, has targeted its guns at the potentially lucrative financial institution market.

However, this is not some start-up. VIPdesk has been in the concierge business for 14 years. In its original, offline form, VIPdesk (then called Capitol Concierge) served corporations in the Washington, DC, area with a call center. Then in 1997, it decided to create a "Webified" spin-off.

Mary Naylor, VIP desk's chief executive officer and founder, says the company's jump online was spurred in part by requests from some of its large financial institution customers.

"We received calls from companies like MasterCard and Citibank wanting a national concierge network. So really, we started out with financial services customers." But, Naylor adds, the new VIPdesk is not just about the Web, but about expanding channels. And really, who isn't online these days?

In addition to staffing two call centers, VIPdesk has a healthy contingent of experienced concierges throughout the country. "Our people are mostly former hotel concierges," says Naylor. "Some work from home so that gives us local expertise nationwide."

Although this network of "locals" alone serves to differentiate VIPdesk from the typical restaurant reservation/airline tickets service, the contrasts go well beyond that. For starters, VIPdesk is not merely a self-service offering. When users are online with VIPdesk, they can certainly help themselves using the company's database of services. However, they can also e-mail a concierge and even initiate a real-time text chat with a representative.

It was partly the fact that VIPdesk "actually sells things" that drew MasterCard to this service, according to Alice Droogan, a vice president with the card giant. When MasterCard launched its World Card three years ago, it felt it somehow had to set the product apart. The company decided to go with a concierge service.

"We did our due diligence and VIPdesk had a model where it intended to go on the Internet," explains Droogan. "This was important to us. Plus, most of the other companies we looked at were just basically travel assistance services."

MasterCard has been offering VIPdesk to its issuing banks for three years. Although Droogan admits MasterCard "is not making much money from this, (VIPdesk) is a definite value add. It's helping MasterCard support our initiatives to offer more services to our issuers."

Although the idea of card companies and banks providing hospitality services is not a new one, perhaps the most familiar of these is American Express. Its Travel and Entertainment program has been providing American Express card holders and non-card holders alike a place to find the best theater tickets or to book a trip.

Although American Express has agents reserved for specific aspects of the site, like travel, for the most part, Travel and Entertainment is a self-service offering.

"It's not quite a concierge-type service," a spokesman for the card company says. "There's no army of agents manning the phones. There's usually no intervention by us at all."

The spokesman says Travel and Entertainment can be compared to a convenience service. "It's a free, value-added service where we have taken what we have in the real world and put it online."

He said he could not comment on whether American Express is thinking of broadening its hospitality service.

Visa, on the other hand, is several steps ahead of American Express in this area. Like MasterCard through VIPdesk, Visa offers a full- blown, 24-hour concierge service to holders of its high-end cards through World Access Service Corp. Users of Visa Infinite and Visa Signature cards are best described as "those with significant spending power, but not much time," according to Sarah Thompson, vice president of consumer credit products for Visa U.S.A.

Although Visa's brand of concierge service is primarily a full- service travel agency, she says, it will also cater to customers' whims. "They will do gift reminder service, send flowers, handle event bookings-whatever the cardholder requires."

The program does, however, differ slightly depending on which of these cards one has. Signature customers who use the service can call a toll-free number and the concierge will respond to their request using the channel they prefer. Infinite customers have access to a secure, password-protected site where they can gain access to the concierge service.

It is perhaps the ability to be flexible enough to respond to almost anything the customer wants that can make the difference in a concierge program.

"With VIPdesk, it's what the customer requests, not just our putting things out there," says Droogan of MasterCard's program.

But is a concierge service for all banks? Not surprisingly, VIPdesk's Naylor thinks so. Concierge services can be used as part of a larger customer relationship management strategy, forming the framework for customer retention and acquisition programs.

Also, many of these services, can be bank branded. Additionally, when a user deals with a VIPdesk concierge, for example, the name of the bank is used to keep the financial institution's brand intact and to give consumers a feeling of continuity.

"A concierge service can give financial institutions a competitive edge by decommoditizing their products and extending the relationship well beyond the core products to the everyday life of the customer," says Naylor. "It's also a great data-capture opportunity."

"It's an upscale service banks can offer to their best customers," Droogan says. Although Naylor thinks for the time being concierge programs are for high-end customers, this may broaden "as a demand for high-touch services increases."

"Usage rates are very low right now," says Droogan. "But concierge services is a maturing market, especially online."

"As financial institutions continue to look for strategic ways to gain market share and consumer loyalty, they must develop the most compelling features to attract and retain consumers," Visa's Thompson notes. "Concierge services, affiliate programs and loyalty programs will continue to be areas of development in this competitive market."

So are Americans simply so lazy that they need someone to perform even the most mundane tasks?

"As individuals, anyone can figure these things out, especially with the Internet. But it's the time factor that gets us," Droogan says.

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