New York: if you can make it here ... you can branch anywhere! These are the lessons learned in the recent scramble to enter the Big Apple, where the market is both lucrative and competitive. Some of these innovative strategies are spreading to other areas across the nation.

• Author: Stewart, Deb
• Position: Branches

It's strategic planning time. You have decided to enter a new geographic market. Your goal is to reach a specified number of new sites in two years. Now, how are you going to succeed?

One approach is to study the innovative market-entry strategies employed recently in the New York metropolitan area by three rapidly expanding financial services institutions: Commerce Bank, Wachovia and Washington Mutual. All have used the nation's largest urban center as a laboratory to hone their strategies. Each has developed a successful approach based on generating memorable customer experiences.

We spoke with leaders at each of these institutions, asking them to discuss the most important element of their strategy. Commerce Bank talked about its retail approach. Wachovia explained how it goes beyond transaction accounts--by emphasizing financial planning for the middle market. Washington Mutual delved into its use of targeted philanthropy.

Commerce Bank

"Retail Is in the Details"

Vernon Hill, founder and chairman of Commerce Bank, Cherry Hill, N.J., (assets: $15 billion) is not a typical banker. Before starting Commerce in 1973, Hill was a developer of McDonald's fast-food restaurants. He currently owns more than 40 Burger King restaurants. We spoke to him as he was opening his 50th Commerce Bank "store" in the New York metro market.

Every great retailer has a differentiated model, says Hill. Products alone cannot be your basis for differentiation--a comprehensive differentiating model is the key. The Commerce model focuses on convenience, friendly people and "no stupid roles," explains Hill. "We extend that differentiated model into delivery with the right facility, location and a culture that supports our goals. We know that no great retailer has built through acquisition--our de novo strategy means that we don't need to convert people, systems or buildings."

The strategy does not sound different from one that might be used by Home Depot, Target or other high-performing retailers. Here are some of the details about how Commerce Bank has translated retail into the world of banking:

Convenience

Convenience sits at the core of the Commerce strategy. It stares with the tagline "America's Most Convenient Bank." "The introduction of seven-day banking changed the perception of Commerce," says Hill. Every location is open seven days a week with extended hours (7:30 a.m. to 8 p.m., Monday through Friday; 7:30 a.m. to 6 p.m. Saturday; and 11 a.m. to 4 p.m., Sunday). Teller, customer service and personal banker services are available at all times during these business hours. Free coin counting machines are available in all locations for both customers and noncustomers. Those machines have been visited an average of 200,000 times per month since they were introduced. "If you look a the fast-food industry, they're "always changing their menus ... always looking for ways to satisfy their customers' needs in new and unique ways," observes Hill. "That's what we're doing here at Commerce."

Another element in the bank's search for greater convenience is absolute consistency in the customer experience. "Ninety-nine percent of our buildings are freestanding with complete consistency in exterior design, plantings, parking, drive-through, branch zoning, music and overall service," explains David Flaherty, vice president of marketing. "By focusing delivery on freestanding locations, Commerce has better control over these key variables. When a customer drives into one of our parking lots or walks into a store, there are no surprises. In the case of acquired locations, we generally replace them with a new store within a few years."

People

"In order to succeed at Commerce, you absolutely must embrace the service culture," explains Flaherty, "and that is what we focus on in recruitment." Tellers and customer service associates are hired from both financial services and retail. Commerce University provides banking skills and a strong orientation to the service culture. Management generally builds through the ranks or is recruited from other financial services companies. Career paths are clear for people with the right mind-set. The dean of Commerce University and the head of the Commerce call center both began their careers as part-time tellers.

When moving into a new market, Commerce will recruit a new employee, a strong local banker, to lead the initiative. Business bankers are recruited in a similar fashion, attracting individuals who will consistently bring their clients with them.

"No stupid rules"

"We look at branch policy in a very simple way," says Hill. "If an 18-year-old teller can't explain the policy, don't make it! We have no uncollected funds policy, or other rules that customers and employees don't understand."

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