Material Adverse Change

CHAPTER 2Buy or Build?

I love it when one bank buys another. They get the bank and I get all of the bank's customers!

—Vernon Hill, founder of Commerce Bank

A CASE STUDY: COMMERCE BANK

Way back in 1973, Vernon Hill came up with an idea for a new type of retail bank. Hill owned several Burger King restaurants. He understood what made a fast-food franchise successful and noticed a stark contrast between how a typical retail bank approached its customer versus how a fast-food restaurant approached the customer. Fast-food took a retail, customer-centric approach to business. Burger King was open late at night and over the weekend. You could enter any Burger King outlet, order your food, and be seated and eating within five minutes of entering the building. You knew that the quality of food at Burger King was consistent whether you were at a store in Pittsburgh, Pennsylvania, or in Moscow, Russia. You can enter a drive-through window at almost any hour of the day, never get out of your car, and be served a hamburger and fries within minutes. This is the essence of delighting the customer with your service.

Compare this retail, fast-food experience with what you find in a typical bank. Most banks close every day at 5 P.M. They are closed on weekends. Some of the bank's employees are not especially friendly or particularly concerned about the customer's experience once they walk through the doors. There are frequently long lines just to get to a teller. Many transactions can't ...