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Chicago area bank takes service to the 'Wow' level

"Wow" is a high standard; that's where Labe Bank has set the bar for its customer service.

The $412 million bank began looking for ways to distinguish itself from the competition in 2001. Four years later, the bank has adopted a new "brand," implemented an innovative customer service program, converted to a state-chartered bank from a federally chartered thrift, and is about to open a new branch - and, the bank has more than doubled in size.

Drawing on his career experience from other industries, Labe Bank President David Arts set out to define the bank's brand. A CPA who began his career with Deloitte Touche, Arts saw that each company he worked for - Budget Rental Car and Century 21 Real Estate before joining Labe Bank in 1996 - had its own personality. "That is what I call its brand," Arts said. "Just like everyone has a personality, every company has a brand.

"To determine what your brand is, you need to make an assessment. Once you know what that brand is, you can determine whether you like it or want to change it," Arts said. So Labe Bank interviewed customers and employees, conducted focus groups, and even mystery shopped competitors to determine its own strengths and weaknesses. Customer service emerged as a priority based on the self-evaluation. The bank hired BrandTrust, a Chicago consulting firm, to help it define a tag line, which became the basis for its new branding strategy: "Labe Bank, what a bank should be."

"You can have a great slogan, but you better be able to deliver," said Vicki Dreyer, vice president of marketing. "All community banks pride themselves on good service; it's almost become a clich??. So we set a standard of exceeding the customer's expectations."

Management set standards they considered to be in the "wow" category. They went to the bank's 102 employees and asked them to define ways to reach that level. "We sought employees' input for reaching new levels of service at every individual job, and for every department," Dreyer said. "We knew this wouldn't work without employee buy-in."

Employees embraced the process and came up with standards. Company-wide training ensued, where the bank's new "Golden Rules of Service" were described. The rules fall into three broad categories: greet every customer, exceed every customer's expectations, and thank every customer. The Labe Bank brand, employees were told, was up to them. Each was asked to sign a commitment statement that outlines 10 service criteria, such as "greet every customer with a smile, eye-contact and a cheerful tone of voice," and "use the customer's name at least once in our conversation." Every employee signed the statement, Dreyer said.

Many of those criteria were built into individual performance reviews so compensation drives some of the new service, but Arts and Dreyer said the bank's most effective motivator is its "wow" award. Whenever an employee is identified as having gone above and beyond normal expectations for customer service, the bank makes a big deal out of it by conferring an award.

"We surprise the employee, sometimes right at their desk in front of a customer, with the presentation of a plaque. They play the Tina Turner song, "Simply the Best," over the intercom. And within five minutes of presenting the award, they send an email to everyone in the company announcing who was honored and what they did. "The employees love it, and so do the customers," Arts said. "The customer likes to see people being recognized for good service."

Arts described the kinds of actions that merit an award: an employee who gives a customer a ride home when their car had broken down, or an employee who offered to help a customer with a package that needed delivery. And there was the employee who took her day off to go to an elderly customer's home to help him set up a computer so he could get started on the bank's Internet banking service. Employees with little customer contact also have a chance to be recognized, as one was recently for taking on a particularly heavy workload. Customers or employees can nominate someone for an award. Nominations are evaluated by the head of human resources, the employee's department head, and Arts. Since the awards program was started in September 2003, 277 nominations have been made - 76 were actually awarded. One employee has been honored five times and seven have been honored three times.

Is it making a difference? Arts says it is. The bank has more than doubled in deposits in the last four years, and the wow program has contributed to that growth, he said. Arts clarifies that the new deposit money represents real growth - "there's no hot money in there. It's like we say on a billboard: we don't build bank accounts, we build customers."

Arts points to the bank's seniors' club as another example of the bank's people-appeal. The Good Life Club hosted a breakfast on a snowy January morning earlier this year and 270 people showed up at 8 a.m. "One couple came from Aurora, which is 40 miles away," Arts said. "One customer came up to me and said 'I don't know why anyone associated with this bank wouldn't be here.'"

Earnings from the bank's day-to-day earnings are stronger than ever, Arts said, although the bank took an earnings hit in 2004 related to its May 1 charter conversion when it added $2.8 million to its loan loss reserve. The additional reserves, Arts said, were required by the FDIC to bring Labe Bank to a loan loss reserve position commensurate with its peers.

The new charter is a better fit for the bank's business, Arts said. Founded in 1905 to serve Czech immigrants, Labe Bank had become a bank serving commercial customers much more than traditional thrifts. The switch to a commercial bank charter, although virtually transparent to most customers, gave the bank a regulator more comfortable with the bank's business mode.

Labe Bank, which has a mortgage company, an investment company and two bank offices, will open a third branch this summer. Arts said it was a project that got put on the back burner during the charter conversion. But with the wow brand established, Arts said it is time to move forward, including launching a new marketing campaign. Marketing is something the bank takes seriously; Dreyer has three full-time employees assisting her. In addition, she works with a Chicago public relations agency, Cushman Amberg Communications.

"Our ads are not like the ads you see for a lot of banks," Dreyer said. "We're not touting our rates. We use real customer testimonials in our ads. We use real stories. We will be expanding on that."