The 'Chicken Salad' strategy: F&M Bank, Clarksville, Tenn., started achieving growth by inviting targeted customers to homemade lunches in the institution's conference room. From there, the events as well as the bank's assets kept getting bigger and bigger.

• Author: Graves, Virginia
• Position: Customer Relationships

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When tiny Farmers & Merchants Bank moved from Bumpus Mills, Tenn., to the state's fifth largest city, Clarksville, few noticed. Even its top executives admit they had the ugliest bank building in town, located in a less-than savory part of the city. Local residents and businesses didn't know the name. Stalwart competition with deep community roots weren't concerned.

So how' did this small rural bank go from zero presence to tops in market share? When American Banker newspaper recognized Sammy Stuard, president and CEO of the now F&M Bank as its 2007 Community Banker of the Year, the bank was honored for its offbeat but powerful marketing strategies." But look closer and you'll see that F&M Bank is equally successful at maximizing the unique strengths of its personnel, targeting choice banking relationships and gaining new deposits, one customer at a time.

Taking top spot in a 200,000-person metropolitan statistical area (MSA) was no walk in the park. For more than a decade, six of the 12 banks in the booming Clarksville/Montgomery County market had been duking it out-each holding on to double-digit market shares. But in 1991, with little money and even less name recognition, F&M Bank and new marketing director, Fred Landiss St., relied on a rather simple Southern-hospitality strategy to boost their presence in the market place. He brought out the chicken salad. Smile if you like, but today F&M enjoys the number one market share in the Montgomery County, Tenn./Hopkinsville Ky. MSA, with total assets that have grown from $22 million to over $650 million.

Ladies first

Today banks talk at length about niche marketing, relationship building and word-of-mouth advertising. EveW community bank talks the personal service and relationship talk. At F&M Bank, the employees not only walk the walk, but frequently spread the bread.

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From the day F&M moved into Clarksville, it targeted select, high-net-worth individuals and families in the market, and invited the ladies to lunch--not to fancy restaurants, but to a modest conference room on the bank's second floor. There the ladies dined on homeraade chicken salad and sat side-by-side with the bank's top echelon, who poured iced tea and offered help with certificates of deposit, annuities and checking accounts.

Why the ladies? F&M felt strongly that women in its market were opening and controlling a high percentage of household banking relationships. It was likewise a low-cost, high-touch way to pursue deposits. As Landiss, senior vice president and director of...