Vernon Hill - Fans! Not Customers

FANS Not Customers

How to Create Growth Companies in a No Growth World

VERNON W. HILL II

with Bob Andelman

Foreword by Tom Peters

THIRD EDITION

This revised edition published in 2020

First published in Great Britain in 2016 by

Profile Books Ltd

29 Cloth Fair

London EC1A 7JQ

www.profilebooks.com

Copyright Vernon Hill, 2012, 2016, 2020

The moral right of the author has been asserted.

All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the publisher of this book.

A CIP catalogue record for this book is available from the British Library.

ISBN 9781788166508

What People Are Saying About Vernon Hill

I liked Vernon Hill immediately because hes such a positive character I think there are some Americans who take to England, particularly London, like a duck to water, and some that dont. Vernon and Shirley love London. They love meeting all sorts of interesting people, and that comes across. People here like Americans very much who like our country. Metro Bank is a classic mom and pop business. I think Shirley Hill does a fantastic job in building the Metro stores and brand. Im very fond of Shirley because shes a hell of a character, and shes very warm. And I get on with her like a house on fire.

Lord Howard Flight, member, House of Lords

Vernon told me that the whole point of the company is that its a symphony. The performance works because everything works in concert and so, if you dont buy it in its entirety, you cant ever get it to work for you. Vernons competition over the years simply refused to learn from Commerce Bank.

William C. Taylor, author, Mavericks At Work

I had the opportunity to sit down with Vernon Hill and pick his brains on starting a business. He gave me a copy of his book, FANS Not Customers. Read this book, he said, and I did. A whole bunch of things we do at Second Home, my company, are taken straight from the book.

Rohan Silva, co-founder, Second Home

In banking, there is certainly an over-emphasis on not failing. Dont do something different if you might fail at it. Vernon has not been afraid. One of the most important elements of his success is that he has not been afraid to try things that either nobody else does or that conventional wisdom says is wrong Vernon reinvented American retail banking. His focus on service created a true growth retailer. No one else has grown an American bank internally at 23 percent per year for 30-plus years. No one.

Tom Brown, founder, Bankstocks.com

In a nutshell, what Hill and his associates brought to the staid, stagnant banking business was bold, brash, colorful, fun, energetic excellence. And they delivered it in a human-centered way that created memorable, emotion-laden experiences that earned millions of loyal fans.

Tom Peters, author, The Excellence Dividend

To our loyal colleagues, investors, and customers.

To my partners, John Silvestri, Steve Lewis and Gary Nalbandian for their dedication, loyalty and support.

And to my beloved wife and life partner Shirley, with whom I have shared an incredibly rewarding lifes journey, memorable travels, vision of the future and success at work and at home.

Tom Peters

Writing this foreword is easyand impossible. The easy option: Just include every page of the book in my bit here. That is, I didnt find anything not worth reading, in fact ingesting, nary a non-Wow in sight. Writing a foreword to this book is impossible: there is so much I want to say and say in detailand commend.

No kidding, this is the toughest foreword Ive done, because I wont know where to stop, and want to say so much more than space permits. Such as:

The story of Commerce Bank and now Metro Bank is virtually one of a kindthey do so damn much right.

The bank works, absurdly well, from a P&L standpoint. Hence, Doing the right stuff = Doing the profitable stuff.

You can make money, lots of it, off a customer service modelthere are skeptics galore. (Fools, I call them. Sorry.) (Of course there is a problem, and a big one: You can lose your shirt with a SORT OF good service approachwhich costs a ton and is not memorable.)

The bank takes on the regnant business modeland clobbers it. They want me in the branch (and WHAT A BRANCH!more later) dealing with their folks face-to-face, not out of sight at the ATM or on the web.

Cost cutting is a death spiralthat sweet music is worth the price of admission all by itself, to meits long been my religion. Commerce and Metro tell us there are two choices for doing business: (1) cost-cut your way to prosperity; or (2) spend your way to prosperity. And the answer is: There is indeed an ALMOST SUREFIRE answer: spend!

Spend. Over-invest in people. Over-invest in facilities. What could be more obvious? (And so rarely practiced by even our so-called best organizationsespecially in banking.)

These guys wantdesperately almostto shower me with attention. (Darn close to love and affectionyes, a b-a-n-k.)

And the me is everyone! Forget the high net worth customer. Forget the 8020 rule: Metro wants us all!

They want to make AMAZE, AMAZE-ing, AMAZEness as normal as breathingand theyre happy to use that hot word.

These bankers not only want mebut they want my dog!

They want me darn near 24/7the 7 for sure and close to the 24.

They areyes, a bankcolorful. They pig out on Red and BlueRed and Blue. Red and blue. And then more red and blue.

Im a design nutI think design matters, a lot and everywhereJUST LOOK AT APPLE. Cool design in a bankyup, top marks on that one too. (The word matchless comes to mind.)

Back to the business modelthey are foursquare champions of Organic Growth. (I consider myself Public Enemy Number One of the marriage of dinosaurs, otherwise known as 90 PERCENT of mega-mergers.) (Small, perfectly targeted acquisitions are okay; they dont screw up the culture. Yikes, Ive been preaching this to deaf ears for 25 years.)

Back to the business model redux: these guys believe that people will pay a little more (or accept a slightly smaller return) in recompense for knock-your-socks-off-all-the-time service.

Commerce believed they could make it in Manhattanand did they ever; instant success was just that.

Commerce proved it, not only with profit but also with tiptop awards from the likes of J.D. Power. (And some amazing testimonials from tough cookies, scattered throughout the book.)

They believe you can go for fast growthand keep the spirit intact.

They hate-hate-hate bureaucracy. So do I!

They love trainingcall it what it is, indoctrination or boot camp for the company culture.

They groove on the word Yes (to customer requests) and treat No as if it were a four-letter word, not a mere two. Yes = Of course we can, just watch us. No = Mortal sin, not in our vocabulary.

Customer service at this level costs money (learn inside about the expensive change machines, not to mention the cost of dog biscuits and balloons); and Metro spends that money.