Vernon Hill - Fans Not Customers: How to Create Growth Companies in a No Growth World

FANS Not Customers

VERNON W. HILL II is the founder of Metro Bank UK and Commerce Bancorp. Hill founded Commerce in 1973; it became the fastest growing bank in the US before being sold in 2007 for $8.5 billion. He is a noted critic of traditional banking customer service, considering himself a retailer first and banker second. Hill is a graduate of the Wharton School at the University of Pennsylvania. He divides his time between the UK and the USA.

BOB ANDELMAN is a professional author. He has co-written many business books, including Built from Scratch, the story of Home Depot.

TOM PETERS was described by The Economist as the uberguru of business. He is the author or co-author of many international bestsellers on business and management, most notably In Search of Excellence and including Re-imagine! Business Excellence in a Disruptive Age.

How to Create Growth
in a No Growth World

VERNON HILL
with Bob Andelman

First published in Great Britain in 2012 by
Profile Books Ltd
3A Exmouth House
Pine Street
Exmouth Market
London EC1R 0JH
www.profilebooks.com

Copyright Vernon Hill, 2012

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Typeset in Minion by MacGuru Ltd
info@macguru.org.uk

Printed and bound in Great Britain by
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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 978 1 78125 110 2
e-ISBN 978 1 84765 956 9

The paper this book is printed on is certified by the 1996 Forest Stewardship Council
A.C. (FSC). It is ancient-forest friendly. The printer holds FSC chain of custody
SGS-COC-2061

What People Are Saying About Vernon Hill

Vernon reinvented American retail banking. His focus on service created a true growth retailer. No one else has grown an American bank internally at 25 percent per year for 30-plus years. No one.

I think Shirley, Vernons wife, was the secret weapon of Commerce Bank and is exactly that now at Metro Bank. She is the keeper of the brand, produces design as a competitive weapon, and enforces the culture.

Tom Brown, founder, BankStocks.com

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 was at the opening of the first branch of Metro Bank in London. It was incredible. Incredible! Its Commerceand even better!

Meredith Whitney, founder, Meredith Whitney
Advisory Group LLC

To our loyal team members, investors and customers.

To my partners, John Silvestri, Steve Lewis, John Scardapane,
Chris and Natasha Ashton, Gary Nalbandian, and Craig
Donaldson 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, 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 want desperately 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, AMAZE-ness 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! (Youll learn about Red Buttons that extinguish stupid rules in good timeI really dont want to spoil the story.)

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.