To connect with the community, Essex savings Bank, Conn., gives back--generously.

• Position: MARKETING NEWS

WOULDN'T IT BE NICE IF YOUR BANK received huge amounts of positive media publicity throughout the year? Wouldn't it also be good if local organizations on their own initiative encouraged their members to open accounts at your bank?

It sounds like a marketer's dream. But that is the situation with the Essex Savings Bank (assets: $295 million) in Connecticut. "We have many customers who are basically cheerleaders for their local bank," explains Gregory Shook, president and CEO.

That's not surprising when you learn that for the last 15 years, Essex has been operating a program where-by the bank returns 10 percent of its after-tax net income to local nonprofit organizations. That currently adds up to about $250,000 annually, which is distributed to about 200 nonprofits. What's more, Essex customers themselves can vote on how 30 percent of the proceeds are distributed. The bank has given more than $2.9 million to nonprofits since 1996.

Aside from the obvious goodwill, the bank has also increased its share of the financial management of local foundations (the bank has a trust department as well as commercial banking services and a broker-dealer affiliate). It has also increased its number of accounts. Since customers can vote on how some of the proceeds are distributed, a number of nonprofits" encourage their members to open an account at Essex--so that they are eligible to determine how the funds are spent. No other bank in its market area contributes a comparable percentage of its after-tax net income to nonprofits, Shook says.

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Every year when the bank publicizes the upcoming balloting, there is a tremendous buzz in town, Shook explains. "You hear people saying: 'What a great bank. How do I participate'?"

Essex, which is located on the Connecticut shore about halfway between New York and Boston, is an upscale community where the pace of living is slower than in urban areas. The program originated because the bank wanted to do something to connect itself more closely with the community, Shook says. The bank determined that it was not large enough to form a foundation, but after hearing about a bank in another state that created a program along similar lines, Essex...