The first time he walked into Liberty Bank in Twinsburg, Phil Studer knew changes had to be made.
With 17 years experience in community banking at the Twinsburg Banking Co. and its eventual buyer, FirstMerit Bank, the new president and CEO of Liberty Bank knew the $46 million, two-branch institution needed to compete by connecting with customers in ways its giant competitors couldn’t. It was the only way Studer saw the bank being able to grow at the rate he knew it was capable of growing.
“When I came to Liberty Bank, I tried to step back and just observe things,” says Studer, a Twinsburg native who started in the banking business as a part-time teller while attending The University of Akron. “I tried to identify the issues I needed to deal with.”
Studer identified three key areas that needed improvement:
* Personnel issues
* Lack of growth
* Lack of recognition and awareness of the bank in the community
Changing attitudes
“What struck me the most was the morale and attitude of the employees,” says Studer of his initial observations after taking charge in July 2001. “There wasn’t a strong culture. There was poor communication and definition of strategy. The employees didn’t understand where we were heading or what we were trying to do. That translates into attitude issues.
“I was used to working in a professional environment. The appearance and behavior of the employees was different than what I was used to. Management has to set the tone and expectations and lead by example. It filters down through the company.”
Studer held corporate strategy sessions to discuss what the bank is trying to be, where it is going and how it is going to get there. Employees were told of the ultimate goals and objectives of the company and how they were expected to contribute daily.
The transition of cultures didn’t come easy for some employees, including one senior manager. Those who didn’t buy into the new concept left.
“I think they were definitely changes for the better, but the only challenge is, it’s tough on customers,” says Studer. “They don’t like to see faces changing too frequently. It has allowed us to attract some good professional talent — people we feel comfortable with as individuals and business partners.”
The buy-in on the part of the employees was crucial to Studer’s plan to make Liberty unique by out-servicing the 12 other banks in the Twinsburg area. It meant a return to the feel of a true community bank, where employees are on a first-name basis with customers.
“I truly believe it is the only thing that sets us apart,” says Studer. “It is all based on the people in the facility and how they treat their clients. Most banks have the same commodities, but what the bigger banks don’t offer is myself and my staff. We have to be competitive, but we’ll never be the highest interest-paying bank or be the lowest service-fees bank.
“It’s tough to compete with multibillion-dollar companies. We have to strive for services and relationships with our customers.”
Studer pushes his employees to do the same thing he does — be on a first name basis with customers and talk to them and make them feel at home.
“I want to look at our customers as friends that we have that we just happen to be taking care of a transaction for them,” says Studer.
Growing business
Changing the attitudes of the employees is great, but it’s only one part of the overhaul.
“It’s good for customers to walk into the bank and feel welcome, but we will not survive if we are not looking out for new business,” says Studer.
The first focus is on existing customers, who are split about 60 percent commercial and 40 percent retail. As with any business, it’s much easier to get additional sales from customers who are already familiar with you.
The second focus is on obtaining new business by being active in the community to introduce Liberty Bank to those unfamiliar with it.
“We are always going out promoting Liberty Bank at networking and community events,” says Studer. “We let people know that we are here and looking for business, and we take care of you. It’s challenging but we are starting to see results.
“Fortunately, we have seen the larger institutions have more turnover not only in the branches, but in the ranks of the commercial bankers or lenders as well. I think we have been demonstrating that we are consistent and stable. We have the approach that we are here to make customers happy, we live in the community and our kids go to school here. We have a vested interest in the reputation of the bank.”
Liberty has also tried to capitalize on businesses that don’t meet the sales requirements of larger banks and those that have been cast off as banks refocus efforts elsewhere.
“Our typical customer is a business with $7.5 million in sales and under,” says Studer. “That doesn’t mean our credit standards are any less than other banks, but we do have more flexibility on how deals are structured. We want to understand the numbers and take them into consideration.”
Making a name
Open the Cleveland Plain Dealer on any given day and you aren’t likely to find an ad from Liberty Bank.
“For a smaller bank, advertising promotion is very expensive,” says Studer. “Larger banks are in the papers and trade publications on a regular basis.”
So the challenge is to find a way to be different, to get the name out and do it on a limited budget.
“It’s a real hand-wringing item,” says Studer. “How can we spend our limited dollars most effectively on promotion?”
Studer has used a strategy of focusing on events and direct mail pieces, with an occasional insert into a community newspaper in Twinsburg and Solon, where the company has a branch.
“We have had several direct mail pieces that went to households within certain parameters (household size, location and income), we’ve have money market promotions, home equity lines of credit promotions and created a savings club for children to get them active in saving,” says Studer. “We feel the direct mail piece gets us more attention from the home or business owner, and we can control the distribution a bit better.”
The bank also emphasizes its community ties with event sponsorships and by working with community groups.
“We provide community groups checking accounts that don’t charge service fees and provide interest on the accounts,” says Studer. “We want to let people know we are part of the community and value those relationships. From the sales side, it’s a way of getting new faces into the bank.”
Show me the money
Studer’s three-pronged strategy has garnered impressive results. The bank’s loan portfolio grew 21 percent in 2002 over 2001. Asset size was up 11 percent in that same time period. Net income in the first quarter of 2003 is up 33 percent compared to the first quarter of 2002.
And the existing customer base is showing double-digit growth.
“It’s really encouraging,” says Studer. “We’re really psyched up to know that as a team what we are trying to do is having some effect, and we’re getting psyched up to continue the process to do better. We have a long way to go, but the point-to-point comparison is encouraging and has been rewarding.” How to reach: www.libertybankna.com or (330) 425-3033
