The power of brand: Labe Bank of Chicago was just an "ordinary" community bank with $100 million in assets. Then the bank decided to create a strong brand identity. Before long, its assets had quadrupled. Two managers explain how the seemingly simple change made a big difference.

• Author: Bernstal, Janet Bigham
• Position: Community Banking - Interview - Cover Story

A while ago, Labe Bank was a self-described "diamond in the rough." Founded in 1905 by Czech immigrants, Labe Bank was for a long time comfortable with being a one-branch neighborhood institution. Some of the customers are now third generation. These customers sometimes bring family and friends and share family photographs with bank employees when they visit "their bank." Because of the bank's history, the staff was sensitive to cultural and communication issues of immigrant communities. The diverse bank staff spoke dozens of languages.

But in 1990, after about 85 years in business, the leaders at Labe Bank decided that the institution could not continue to survive and prosper unless managers initiated some organizational changes. At the same time, they formulated a strategic plan for growth and hired a brand consultant to help change the institution's focus from selling products to selling services. As a result, Labe Bank started down a whole new marketing road.

The president and CEO, David Arts and the vice president of marketing, Vicki Dreyer, spoke recently about the journey with ABA Bank Marketing contributing writer Janet Bigham Bernstel.

Why did you put such emphasis on a new branding initiative? Why not just increase your existing marketing efforts?

David Arts: The one thing we knew is that we needed to run the bank like a business. In doing so, we knew we had to deal with and capitalize on our strengths and understand our weaknesses. We also knew that we had to meet the customers' needs and have them grow with us.

So, with the customer being the focus in building our business, it launched the whole branding concept.

What had the bank been running like, if not a business?

David Arts: The ownership of the bank changed in 1990 and the new, and current chairman, Lowell Stahl, was not a banker. He came from real estate. So the whole personality of the bank slated, and it started to no more like a corporate business.

In 1995 there was another major change with new people and new initiatives. That's when Vicki and I both came to the bank and we both have backgrounds in the business world, not banking.

We started right away by recognizing that we weren't going to fall into the trap and run the bank like other banks are run. That's not an insult to the industry, but our way is just alien to the way current marketing is done in most banks. Marketing to them is "how big is the ad in the paper that tells our current rate?" They sell rates and they call that marketing.

To us, that's not marketing. Marketing to us is defining who we are, what we can deliver to the community and to the customer, and how...