April 18, 2001

Talking the Talk

By STEVE BAILEY

Could this be the Year of the Customer at Fleet?

It's an outlandish concept, I admit, considering we're talking about the bank we have come - with ample reason - to love to hate. But even the bank's most constant critic, Bruce Marks, the Jesse James of American banking, walked away startled by what he heard at yesterday's annual meeting at the World Trade Center.

Marks, in his trademark "Stop the Loan Sharks" T-shirt, a reminder of the great war he waged against Terry Murray and his bank, had come with his ragtag army prepared to disrupt the shareholder meeting in his latest anti-Fleet campaign. In the end, his colleague, the Rev. Ellis Graylan-Hagler, got up to thank Murray for taking their concerns seriously.

"He said everything we wanted him to say," Marks said after the meeting.

What Murray and his designated successor, Chad Gifford, said was that the bank is changing its direction from one focused on the next merger to one focused on the next customer. "Customer-centric" was the buzzword of the day.

"It is the heart of our approach and to our long-term growth, and we intend to increasingly make this a competitive advantage - perhaps the key competitive advantage," Gifford said.

Forgive us skeptics. This is the bank, after all, that got a huge black eye in the early 1990s for ripping off some of its poorest customers. This is the bank whose boss was once quoted as saying that "B" service was good enough because better service was too expensive. The bank that ranked next to last in a Consumer Reports survey of service among the 20 largest regional banks. The bank that lights up my e-mail and phone with horror stories from customers every time I come anywhere near the topic. This is, in short, Fleet we're talking about here.

Even Bank of Boston's legendary chairman, Richard Hill, the man who climbed the State House steps in those dark days of the 1970s and single-handedly rescued the state from financial ruin (or so the story goes), admits he was miffed at how bad Fleet's service had gotten after the merger with BankBoston. Among other things, he told me, the bank had messed up his pension.

"Even I was frustrated with the service," Hill said.

Fleet insists it is changing because the world is changing. Murray became the king of New England banking one deal at a time. But these days Wall Street doesn't want to hear about acquisitions. Fleet's stock is lagging behind some of its peers precisely because investors are worried that Murray might still have one more mega deal in him before he steps down. Wall Street wants to see internal growth from banks.

At Harvard Business School they teach that there is no customer like an old customer. It's expensive to chase new customers; the best business is the one that retains and expands its relationship with its current customers. And that is exactly the strategy Murray and Gifford articulated again and again yesterday.

Those of us who have followed Fleet have heard this before. When acquisitions were out of favor in the past, Fleet talked about growing the business internally. Then along came the Bank of New England deal, then the Shawmut deal, and on and on.

The guard is changing at Fleet. Murray and Gifford are talking the talk its angry customers dearly want to hear. "Things are fine now," Dick Hill says of his service today.

There are always going to be problems with Fleet's service; this is a big bank, a very big bank, we are talking about after all. But customers have a right to expect more than Fleet has delivered up to now. Wouldn't it be amazing if one day in the not too distant future you didn't have to be a retired bank chairman to say things are "fine" at Fleet?

This article is reprinted here for non-commercial, educational, fair use purposes only.