1. EXCELLENCE. ALWAYS. MVPs. 2006. 0103.2007

2. Commerce Bank

3. The Power of WOW! How Commerce Bank Created a Super- Growth Business in a No-Growth Industry Vernon W. Hill, II

4. Our whole story is growing revenue. Vernon Hill (Top-line driven; standard is bottom-line driven by cost cutting)

5. 8,000 Radio City Music Hall … J.D. Power/Customer service/Bank/NYC/1 st in 5 of 6; 2 nd in #6 … Inspired by Ray Kroc … $36B ($100B in 6 years); +$750M per month/373 branches in 7 states/900 in 6 years … player piano … Penny Arcade/$25K per machine … 9M lollipops, 2M dog biscuits … stupid rule (red) button … call center not cost center, but opportunity/human by second operation … over-invest in real estate … design- experience fanaticism … Red!/Red Friday/Hot music … deposits available next day (vs ½ on 3 rd ; ½ on 5 th ; focus on 99%, not 1%) … LONG HOURS!!!! (7/week/12 hours/Fridays/15 minutes before) … Do whacky things for customers (VH) … create magical moments of surprise and delight for employees (VH) … Hire for attitude. Train for skills. (VH) … Chinatown/10K first day; 28K first week … Commerce U in 93 (underlying theme is funVH)

6. Commerce Bank: From Service to Experience 7X. 730A- 800P. F12A.* *93-03/10 yr annual return: CB: 29%; WM: 17%; HD: 16%. Mkt Cap: 48% p.a.

7. Thesaurus of WOW! They hate it if you call them bankers. They love it, on the other hand, when you ask to see their #sstupendous. They are … Commerce Bank. These absurdly fast growing, insanely profitable retailers, rewriting the rules of East Coast retail banking, sent me a copy of their booklet, Traditions. It explicates their Wow the Customer Philosophy. At the end theres A Collection of Commerce Lingo. I wont define (use your imagination), but simply offer a small sample: Fans, Not Customers. Say YES … 1 to say YES, 2 to say NO. (A staffer has to get a supervisors approval to say no to anything.) Recover!!! To Err Is Human; To Recover Is Devine. Leave Em Speechless. Positive Behavior. Positive Language. Kill A Stupid Rule. (Get cash rewards for exposing dumb internal rules that impede our ability to WOW!) Make the WOW! Answer Guide Your Best Friend. Buzz Bee. CommerceWOW!Zone. (A K-12 financial education program.) Doctor WOW! Ten-Minute Principle. (Stores open 10 minutes before posted hours, stay open 10 minutes after posted hoursand the hours, such as open 7 days a week, are already incredibly generous & tradition-shattering.) Wall of WOW! WOW! Awards. (The annual recognition ceremonyRadio City Music Hall, with the Rockettes, in 05.) WOW! Patrol. WOW! Spotlight. WOW Van. WOW Wiz. (A service superstar.) Etc.

8. S.M.A.R.T. S. Say Yes M. Make Each Customer Feel Special A. Always Keep Customer Promises R. Recover! T. Think Like Our Customers S.M.A.R.T. S. Say Yes M. Make Each Customer Feel Special A. Always Keep Customer Promises R. Recover! T. Think Like Our Customers

9. Standard bank: Keep em out of branches; ignore middle income; cost-driven following mergers. (No great American retailer was ever created by doing acquisitionsVH No examples of seriously broken retail models that have been fixed.) CB: deposit focus; customer experience; best facilities; no stupid rules; revenue driven; better experience for lower yield

10. Source: Vernon Hill … cut costs at most banks. We have to push them out of the branches. We have to push them to machines. We have to push them to the Internet. Source: Vernon Hill

11. We defy conventional wisdom, operating more like the young bucks at Starbucks than the old farts at the Bank of America. Vernon Hills

12. TP: Experience … Top-line fanaticism (vs Cost- fanaticism) … Deposits …Drive em to the branch … Experience/Wow! … design … little touches … no stupid rules … Talent/Attitude/ Recognition

13. John Laing Homes

14. We dont close units, we build homes. Larry Webb, John Laing Homes

15. If you want to gain competitive advantage fast, the best place to do it is in sales. Larry Webb, John Laing Homes

16. Builder of the Year/Professional Builder … Experience … Communities/ Family values/ Relationships/After-sale …talk to our customers … J.D. Power awards … Warranties … Price premiums … Design!!!! (all Divisions winners) (Top names) … Data/market research … Top company to work for … Team development … I just love being a home builder. (LW) … Brand … Emaar Properties (Robert Booth/Intl: They have a tremendous focus on the customer, and that is hugely important to us.)

17. Soft Skills, Hard Dollars Source: Headline, BigBuilder, September 2006

18. A couple of years ago, the Los Angeles division [of John Laing Homes] decided it was going to become the king of Hispanic housing [sarcasm], because our research shows theres a huge demand. They were right to go after that market, but I looked around the room, and its full of white guys. They were telling us how much they know about Hispanic buyers, and they were making it up. … Were getting better now. We hired two smart, young Hispanic managers. … We are working through a partnership with [former HUD secretary] Henry Cisneros. Were learning, but we have a long way to go. Larry Webb

19. We are a life Success Company Dave Linegar, RE/MAX

20. jims group

21. Jims Group : Jim Penman.* 1984: Jims Mowing. 2006: Jims Group. 2,600 franchisees (Australia, NZ, UK). Cleaning. Dog washing. Handyman. Fencing. Paving. Pool care. Etc. People first. Private. Small staff. Franchisees can leave at will. 0-1 complaint per year is norm; cut bad ones quickly. Jims Group : Jim Penman.* 1984: Jims Mowing. 2006: Jims Group. 2,600 franchisees (Australia, NZ, UK). Cleaning. Dog washing. Handyman. Fencing. Paving. Pool care. Etc. People first. Private. Small staff. Franchisees can leave at will. 0-1 complaint per year is norm; cut bad ones quickly. *Ph.D. cross-cultural anthropology; mowing on the side Source: MT/Management Today (Australia), Jan-Feb 2006

22. X.06

23. X.06.23: Whole Foods Markets … Starbucks … Wegmans … Commerce Bank … John Laing Homes … Apple … London Drugs … Griffin Hospital/ Planetree Alliance … The Met School/Big Picture … Carl Sewell … Progressive Insurance … Stanford womens sports … Stanford D-School … HSM … Washington Speakers Bureau … Build-A-Bear … RE/MAX … Donnellys Weatherstrip Service … Jims Group … Cirque du Soleil … (U.S. Grant) … (Horatio Nelson) … (Stew Leonards) … (DeMar Plumbing) … (FBR/Friedman Billings Ramsey)

24. X.06.23: Whole Foods Markets (high-end, experience-design, demographic) … Starbucks (people, experience) … Wegmans (people) … Commerce Bank (nuts about customers, WOW, people, execution) … Apple (design-experience, breakthrough, virus management, resilience, talent, seriously cool) … London Drugs (design-experience, people, solutions) … Griffin Hospital/Planetree Alliance (customer-centric, whole person) … The Met School/Big Picture (engagement, self-control) … Carl Sewell (experience!) … Progressive Insurance (speed, IT) … Stanford womens sports (demographic, Blue Ocean) … Stanford D-School (design-biz-engineering, Blue Ocean) … HSM (execution, experience) … WSB (integrity, broad view of customers, execution) … Build-A-Bear (experience) RE/MAX (people/create success stories) … Donnellys Weatherstrip Service (high end, execution-reliability, simply the best) … Jims Group (imagination- Blue Ocean, demographic, customer-centric) … Cirque du Soleil (talent, R&D, Imagination, resilience, design-experience, partnering) … (U.S. Grant/ execution, delegation, people, K.I.S.S., action-at-all-costs, win, bold ) … (Horatio Nelson/ execution, delegation, people, K.I.S.S., action-at-all-costs, win, bold ) … (Stew Leonards/ people, experience-design, Wow ) … (DeMar Plumbing/ experience, people, Blue Ocean ) … (FBR/Friedman Billings Ramsey/ research, focus )

25. High end. Experience.Design. Crazy for customers! Crazy for Patients! (Whole person). Wow! People first, second, third. Breakthrough or bust. Seriously cool. Virus management. Resilience. Tippy top talent. Solutions, not just satisfaction. Solutions, not just satisfaction.Engagement. Self-control. (Customer/Patient/Student control.) Blue Ocean. Mundane stuff made great. Great demographic. The best. Period. Effective partnering. K.I.S.S. Play to win. (Offense > Defense.) Bold! Action! Always! Integrity-as-strategy.

26. * Focused on growth and revenue and offense, not defense and cost containment. not defense and cost containment. *People-talent obsession. *Provide mind-bending experiences. (Driven by design primacy.) by design primacy.) *Nuts about customers. *Happy to use words like Wow. *Pretty close to the high end of the market. [*Ability to make silk purses filled with gold out of sows ears: Wegmans-Whole Foods-Stew Leonards sows ears: Wegmans-Whole Foods-Stew Leonards and groceries; Jims Group and dog-walking; and groceries; Jims Group and dog-walking; Donnelly and weatherstrip installation; DeMar Donnelly and weatherstrip installation; DeMar and plumbing.] and plumbing.] * Execution!