Today there are more national banks, and fewer local institutions, as the number of mergers in the banking industry grows. Those bigger regional and national banks are expanding their markets, and there is more competition for personal and commercial accounts than ever before.
“All banking institutions recognize the nature of this industry,” says Michael Gonsiorowski, president and CEO of National City Bank’s Central Region. “It’s a consolidating industry.”
Which is why, he says, National City works hard to differentiate itself from its competitors. Gonsiorowski says National City does this by working to achieve “trusted adviser” status with its customers, because once the bank achieves this, the customer seldom leaves to do business elsewhere.
Gonsiorowski says National City also differentiates itself by keeping decision-making as close to the customer as possible.
“People like to talk with a person that can make a decision,” he says. “And the team realizes that it is easier to deliver for our customers.”
National City is the fourth largest banking institution in the Columbus market, and Gonsiorowski says the bank’s primary marketing strategy is brand awareness. And gaining business takes listening to the customer.
“We need to make them aware that we’re interested and listen to them,” Gonsiorowski says. “It means keeping our ears on the phone and asking for the business.”
Smart Business spoke with Gonsiorowski about competing in today’s banking and business environment.
Q: National City’s been on a buying spree, acquiring Provident Bank in Cincinnati and Allegiant Bancorp in St. Louis, among others, while at the same time selling off noncore assets such as National Processing Corp. How does this strengthen National City and further differentiate it from the competitors in each of the markets where it does business?
A: In terms of strengthening National City, we are adding or expanding markets. Take Cincinnati; we had not had an on-the-ground presence there prior to the acquisition. We had other activities there, so it was a natural way to fill in the hole we had in that market, and it helps us from an advertising perspective.
We had a commercial presence in a minor way; now it is easier to serve those customers and expand our revenue opportunities. Wayne Bank Corp. in Wooster was also a natural fill-in. We were doing business there but did not have branches. St. Louis was an expansion play. It is a city much like other Midwestern markets in terms of demographics and growth play, so we extended our boundaries, making us bigger and more profitable.
Our intent is to increase our earnings to our shareholders. The industry is consolidating, and we would rather remain on the buy side versus the sell side. It is good to have the financial success that gives us the capacity to do so. The sellers have been willing to embrace the acquisitions and make them happen — you won’t find all of that in our competitors.
Q: One tenet of National City is its commitment to the community. What is NCB’s involvement in Columbus, and how does that fit into the corporate strategy for this region?
A: What we do in Columbus is very much consistent with corporate strategy and culture for National City. We do the right thing for our customers, and we extend that into the community – that is our brand promise.
National City commits dollars and time to social service agencies, health, educational and cultural organizations. We donate a lot of volunteer time and play a leadership role. Our senior managers desire to participate, and we are requested to participate. We are well-represented in the community.
For me personally, as president and CEO, it is a significant part of my responsibilities to be involved in the community. I have board seats and provide leadership to organizations like the United Way, Mt. Carmel, the chamber and the Jewish Foundation. National City commits a little more than $2 million annually in support of an endless number of nonprofit activities, and we encourage employees to volunteer.
Q: Typically, business owners and leaders establish long-standing relationships with their bankers as one of their trusted advisers. How important is this to National City, and how do you, as regional president and CEO, ensure this happens?
A: We aim to become trusted advisers for our customers, and we measure ourselves against that status. How do you know when you get there?
First, you are the customer’s lead bank, which means you are selling broadly across product lines, and the business customer’s employees and managers think of you first and refer others to you. The customer is happy with the service we provide, and provides testimonials and referrals.
We are working toward achieving that status with our customer base. We are always reviewing that whole approach. Are we producing a fair exchange? Customers need to be happy with the financial exchange at the fairest price that the market allows.
It’s a two-way street — you just can’t be the lowest price loan or take advantage of the customers’ trust. We make sure that we are thinking of ways to improve the process and enhance our relationships. So with what percentage of our customers have we achieved that trusted adviser status? Probably about 35 percent … so we have a lot of room to improve on that.
Q: National City has a reputation for empowering its regional heads to make decisions on a local level. How important is this, and how does this help you lead the Columbus market?
A: It’s very important, because our customers prefer it that way, and we are trying to be responsive to our customers. It also allows us to be more responsive, and we can make decisions on the ground. It allows us to be more creative and speeds up decisions. And it allows us to be more flexible.
If decision-making were centralized, it would be more burdensome, and customers can become a casualty of that. It is our stated policy that we keep as much of the decision-making as close to the customer as possible, and we demonstrate that day-in day-out. It helps us in the marketplace.
It’s not the same with all of our competitors, so it can be a differentiating factor. It helps me lead because it is a stated objective, and my team knows it is expected behavior.
Q: What are National City’s biggest marketing challenges, and how will you meet them?
A: In this market, we are in a different position than in most of our other markets. We are a close fourth in deposit market share. In most of our other markets, we are No. 1 or 2. So our ongoing challenge is brand awareness and recognition, letting people know that we’re here and anxious to have the opportunity to serve them.
I can see six free checking billboards on my way to work, so we want to be different. We are a high-touch, high-service, customer-friendly organization. We are constantly surveying our customers, so we know this is true. A billboard doesn’t speak to service levels. We want to be top-of-mind to encourage customers to drive in to the branch.
Once a customer has done business with us, he or she will appreciate dealing with National City. We just have to get you there.
Q: How have your business clients’ needs changed over the last five years, and how has National City changed to meet them?
A: Our business clients face the same challenges we do – their customers are depending on them to lower costs and be more responsive. Their customers are demanding more productivity and efficiency. All of these challenges are hitting businesses every day. Our goal is to deliver services that help them compete.
HOW TO REACH: National City Bank, Columbus, (800) 738-3888 or www.nationalcity.com
