Editor's note: The Business Times annually selects 10 or more corporate and nonprofit leaders as part of our Most Admired CEOs program.Where the nation’s ever-larger big-name banks focus on standardizing their policies and practices to streamline operations and boost efficiency, Jim Herbert built one almost in their shadow focused on personalized service, one customer at a time.
“Jim Herbert started and built an incredibly successful and dynamic financial institution from the ground up by focusing on unmatched service, driven by a strong corporate culture and values focused on people — First Republic’s customers and employees — not banking products,” said Jim Wunderman, president and CEO of the Bay Area Council and a former financial industry executive.
One of Herbert’s first hires at First Republic back in 1985 was Katherine August-deWilde, who was chief operating officer until shortly before retiring in 2015. She remains on the bank’s board of directors as vice chair. But Herbert’s education in banking began at the kitchen table as he was growing up in small town Ohio — Coshocton, with a population of about 12,000 at the time. His dad was an executive at a Coshocton community bank and later became CEO of Lorain National Bank outside Cleveland.
One or two customers a week would seek a home mortgage to purchase Silicon Valley homes for then-pricey $300,000 to $400,000 — well above lending limits for conventional mortgage financing. August-deWilde recalls how she and Herbert in the bank’s first decade would visit Sunday open houses to introduce the bank to real estate agents and prospective homebuyers.
This hyper-focus on personal service benefits First Republic in two ways. First, the bank retains clients because they like the service, avoiding the cost of finding new customers to replace them. Most banks lose 8% of their customers annually, while that client attrition is 1% at First Republic, Herbert said. Strong service also spurs customers to bring more of their business to the bank and promote the bank to their friends and family.That’s not to say it’s always been a smooth road to growth.
“When we bought it, we had a chance to reset our business plan,” Herbert said. “We recommitted ourselves to the concept of client service as the core activity of theenterprise and as the growth engine.”
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