Fans Not Customers: How to Create Growth Companies in a No Growth World

by Vernon W. Hill II with Bob Andelman

Vernon W. Hill II founded Commerce Bank in 1973. In 2007, the bank “was sold to Toronto-based TD Bank for $8.5 billion, producing a 30-year, 23 percent annual shareholder return. Everyone profited, including shareholders and team members.” In 2010, he co-founded Metro Bank, bringing the same service culture to British banking. In Fans Not Customers he reveals the secret sauce of his business model. This book is about branding, differentiation, corporate culture, and organic growth, but the dominant theme is providing exceptional customer service.

“I always believed that the world did not need another ‘Me, Too’ bank. I believed that the value of a bank is in its deposit base. I set out to build a power retailing company modeled on the successful retailers of America rather than a typical bank… The customer exchanged what they considered a better retail experience… for a lower yield on their money—giving us more of their low-cost money. We competed on service—not price.”

“We are perfectly happy having customers. But our goal is to convert them to fans. Fans are customers who embrace your model and culture, become part of your community, and convert their friends to new customers of your brand.”

Here are some of the things that make the branches—or stores as Hill prefers to call them—stand out from traditional banks:

  • Cashiers don’t go to lunch during the customers’ lunch hour.
  • Card and check printers on site so a customer can open an account and start using it immediately.
  • Free coin counting machines. “In 2006 alone, they were used 6 million times.”
  • Sunday hours at every location. “It sent a message to customers that we are there for their convenience, not for ours.”

The book also includes numerous anecdotes about above-and-beyond service.

“Being responsive means being able to set and meet deadlines… When we say to a customer, ‘I’ll have it for you this afternoon,’ or ‘I’ll mail it today,’ we are creating an expectation and setting a deadline for ourselves. Be realistic, because once created, deadlines become a yardstick by which customers measure your success or failure. Create acceptable, realistic expectations of responsiveness for customers and meet those expectations.”

“We have a goal of 100 percent customer service every time, every day, always. While that is physically impossible, it’s what we really must strive for, and anything short of that is unacceptable. Once you start setting ratios of 98 percent satisfaction, it’s a slippery slope to 96 percent, which is just not acceptable. You can never be too detail oriented… The idea is to create a customer for life. If we fail on a lot of these components, we won’t have that customer for life, will we?”

“There is nothing better than being able to create an emotional attachment to your brand, and that’s done through customer service. It’s that human element, that human contact. That’s what makes FANS out of customers… Every decision you make will strengthen or weaken your brand. In the long term, a reinforcing client base is more important than how much you make in the next quarter…I say to new hires, ‘Everything you do, every day, makes the brand weaker or stronger.’”


“Some people hear our ‘No Stupid Rules’ philosophy and choose to bank with us for that alone… Ninety-nine percent of the complaints that reach me personally are a result of somebody enforcing a rule that they should have waived.”

“We even have a policy… one to say yes, two to say no. In responding to customer requests, our team members have two choices: (1) say ‘Yes!’ and solve the issue on the spot; or (2) find someone else who can.”

Company culture can be a sustainable competitive advantage. Hill writes, “I’m a firm believer that anybody can copy your products… but they cannot copy your culture because that is the very fabric of who you are and why you are different.” In an afterword, Fast Company magazine co-founder William C. Taylor compares Commerce Bank with Southwest and JetBlue in the airline industry. He notes that Delta and United launched Song and Ted respectively to compete. “They could never get it to work because they were copying the surface innovations or mimicking the tangible performance, but they didn’t have the culture to do it… And so it goes in every industry. Incumbent players with an ingrained mindset find it very hard to learn from, let alone mimic, the strategies and practices and culture of a genuine outside-the-box innovator.”

“So many people ask me, ‘How will we maintain the culture?’ and I always say, ‘We are not in the maintenance mode.’ It is about enhancing the culture… It is about advancing the ball and staying ahead of the growth curve.”

“The ‘Hire for Attitude, Train for Skill’ philosophy underpins our whole recruiting effort.” The company prefers to promote from within because internal candidates already understand the culture. “One of my points of pride is the vast number of people who started in entry-level positions and grew with the business over the years.”

“You’ve got to take ownership and think, ‘How can I make life easy for customers?’ That’s the key. In fact, taking ownership is more than a figure of speech. “The way people really made money at Commerce in particular was with stock options… All Metro Bank employees receive stock options.”

Mistakes are inevitable, but “there is no mistake that we can’t fix, so we tell team members not to torture themselves over it. We tell them, ‘If you screw up, let us know.’ … “Recovery is an art. And in most cases, every customer problem represents an opportunity to win a customer for life.”

“When we talk about reporting and holding people accountable, it means talking to them regularly. What else do you need? Do you need someone higher up to come in and help you close this deal? Do you need the chief executive to meet a client? Because let me tell you, being able to deliver that is incredibly powerful in our business.”


Part of the Metro Bank training is the acronym AMAZE. The Z stands for Zest, which reminds me of Marketing Insights from A to Z by Philip Kotler. I think Prof. Kotler would be impressed by Hill’s execution of word-of-mouth marketing and customer retention.

Hill’s approach to managing a bank like a retailer is very profitable indeed. “While the better-known Starbucks stores netted $75,000 per unit at the dizzying height of their popularity, a Commerce store netted $1 million on average to the bottom line… A company can have a great model with a reinforcing culture, but execution determines fate. Great retailers know that it’s what happens at the store level—at the point of customer contact—not the corporate level, which determines the fate of a company. Retail is detail.”

The author emphasizes organic growth, but with a conspicuous omission. “Comparable store growth is the core of any great retailer. If you cannot grow your existing stores, you do not deserve to expand. Comparable store growth has proven to be the only reliable predictor of new store success… No great retailer was ever created by making acquisitions.” This raises a question unanswered by the book. What happened after Commerce Bank was acquired by TD Bank. Did the culture survive?

“People look for a single silver bullet, but it’s the million things you put together, and at the center of the million things is culture… It’s not one thing. It’s the sum of all the parts that creates the customer experience.”

Hill, Vernon W., and Bob Andelman. 2012. Fans! not customers how Commerce Bank created a super-growth business in a no-growth industry. London: Profile. Buy from

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