High-energy consultant on mission to transform community banking

Roxanne Emmerich

When Patrick Alexander, then president of Landmark National Bank in Manhattan, Kan., first attended a seminar presented by The Emmerich Group, he could not believe his eyes — or ears. This was no boring slide show presentation on the ABCs of community banking. People were standing, shouting and laughing. And these were bankers. He immediately started checking for early flights home.

As the seminar progressed, however, Alexander became intrigued. At the first break he started talking to those in attendance, from front line staff to CEOs. Everyone had positive things to say about their experience with the Emmerich Group, from bottom line performance to employee and customer satisfaction. By the end of the day he was sold, and he returned to Kansas convinced they needed to bring the Emmerich Group into their banks.

“The first morning back, Pat sat down in front of my desk and explained what happened,” says Michael Scheopner, current president and CEO at Landmark, “and I was kind of shaking my head. I don’t know what they fed you down there, I told him, but that sounds outside my comfort zone.”  He also was convinced it was outside the comfort zone of the bank’s team members. That was about five years ago, and it turns out that Scheopner’s comfort zone — and that of his employees — was bigger than he thought. Landmark has been working with Emmerich ever since.


Success feels good, so celebrate

The Emmerich Group, a Bloomington, Minn.-based consulting firm, was founded by Roxanne Emmerich more than 25 years ago to improve the performance of community banks. And “improving” only begins to describe the firm’s goals. Emmerich and her team say they mean to wholly transform banks and everyone who works in them — from receptionists to CEOs — and in so doing measurably improve the bank’s bottom line. The firm’s motto states: “Taking ambitious community banks to a level of performance they never dreamed possible … and keeping them there.”

Emmerich and her team have caught the attention of community banks around the country, some initially skeptical of promised results and many leery of the high-energy training system that Emmerich employs.

Part of Emmerich’s system is to set challenging goals for individuals and institutions, and to celebrate the attainment of those goals. Success feels good, Scheopner says, so why not celebrate it? And it’s more than just parties to mark progress; it’s also about transforming a bank’s culture. “I no longer shake hands with associates, I high-five them,” Scheopner says. “And they expect it.” That’s a small example of the big changes that he says have taken place across Landmark’s 29 Kansas locations.

Emmerich has many stories like the one Scheopner tells about his banks. But not everyone gives it a chance, she says. “There’s a belief system by some of the banks that we haven’t worked with that we’re the party people and we’re all about fun, and that’s uncomfortable for them,” Emmerich says. “They don’t get us.”

Jill Burnett, CEO of Libertyville Savings Bank in Fairfield, Iowa, got Emmerich right away. Burnett was running a strong bank but suspected they could do better. “The first thing we worked on was culture,” Burnett said — everything from phone standards, to greeting and treating customers, to dress codes. And those just aren’t changes for appearances sake, Burnette said. Her bank’s efficiency ratings have more than doubled and her bank is consistently rated as a top-100 Iowa employer.

One technique employed by the Emmerich Group is mystery shopping, and Lynn Byrd, chief financial officer of Legence Bank of Eldorado, Ill., says there is no better way to ensure that everyone in the bank is focused on customer service. “Everyone is out shopping for your customer,” Byrd says, and it’s easier to lose a customer than to gain one. Byrd says they have initiated a morning huddle to start each day at each of her bank’s six locations. It’s a very brief meeting that may focus on a good experience that someone had the day before, help that someone may need on a particular issue, or just something funny that happened. “We end the meeting on a positive note,” Byrd says. “It’s a great way to start the day.”


Moving needles

“Moving needles” is the term Emmerich uses to describe what happens when banks meet their goals. And under Emmerich’s system, they hit those goals quickly and then move the needles forward. She says 100 percent of her client banks will triple their customer service scores within six weeks. “We know this will happen because it always happens,” she says. “This has an immediate and huge financial impact.”

Most banks double their cross-sells within six months, Emmerich says, and continue to improve those numbers over time. Efficiency ratios improve, ROIs increase, and these goals are met without adding resources. “We tell struggling banks that they can become a top-25 performer, and we get them there,” Emmerich says. “And if they are already a top-25 bank, we will push them even further. We push them to set big goals, and we help them get there.”

It would take a book-length article to describe the Emmerich Group’s system (and Emmerich has written books to describe it), but it broadly incorporates the integration of marketing, sales, service, accountability, and professional development, while keeping focused on the bank’s strategic plan. “We ask banks to give us a picture of utopia and tell us the top three things that are in the way of getting there,” Emmerich says. They then assess the financial impact of each one and rank them accordingly, addressing the biggest payoffs first.

Burnett’s banks are now in their 11th year of working with Emmerich. The first five years were the most intense, she says, with new processes to learn and implement, and with consistent goals to meet. After five years or so, the emphasis shifted to strategic planning and regular coaching sessions to keep skills sharp.

When it comes to employees, job descriptions are rewritten and people’s skills are reassessed so they can be placed in positions where they can best succeed. This takes time, Emmerich says. “We don’t set goals for people until they are ready to go,” she says. “We set people up for success. Staff are eager to have their production measured and to meet their goals,” she says.

Schoepner agrees. It’s important that team members embrace the new culture, he says, but it’s also important that they own it for themselves. Whenever he hears someone say, “This is what Emmerich suggests,” he responds: “No, this is what we suggest. This is the Landmark way. This is how we do things.”

Like many bank leaders, Betsy Flynn, president and CEO of Community Financial Service Bank of Benton, Ky., had exposed her employees to training opportunities over the years and believed that they were doing a pretty good job. “But good is the enemy of great,” Flynn said, and she wanted her team to be great. “We take pride in our client services and meeting their credit needs, but we did not really have our staff trained to meet those needs.” Flynn said she plans to send every member of her bank — including the bank’s board — to at least one Emmerich session by the end of 2018.


A cross-sale by any other name

One of the areas that the Emmerich Group often aims to improve is a bank’s cross-sell numbers. Banks average about 2.2 cross-sells per customer, according to Emmerich, a rate she considers hardly worth a bank’s time. Most of Emmerich’s new clients double their cross-sells within six months or less, and many do better than that over time. However, given the recent attention drawn to cross-sells by the practices employed at Wells Fargo, the idea of opening new accounts for existing customers has drawn scrutiny from politicians, regulators and others.

To address this concern, Emmerich and her team have added new elements to their training systems to ensure that banks stay above reproach. For example, they have added a question on their bank employees’ survey that asks whether bank management is clear that staff should never sell something that a client doesn’t need or want. They have also added a seminar on “cross-selling in a post-Wells Fargo world,” and Emmerich may also add a certification that authenticates a bank’s cross-sales practices.

Legislation may be coming that will limit bank cross-sales or otherwise proscribe business practices, but until then bankers need to show they are addressing this issue, Emmerich says. Even so, that should not prevent them from providing services that customers need. The average financial consumer has more than 12 relationships with various institutions, she says, and there is no reason a bank should not provide as many of those as makes sense.

Cross-sales and the need to grow are just one challenge facing community banks, Emmerich says. She says the industry is approaching a flex point when the number of community banks will fall sharply and only the best will survive. She calls this a VUCA moment: Volatility, Uncertainty, Complexity and Ambiguity. The taxi industry faced this when Uber hit the scene, she says, and community banks are about to feel increasing pressure from competitors that will challenge their survival.

Many banks — even good ones — will be out of business in three years, she says. “I can see the handwriting on the wall. And when that happens, what happens to those communities?” This question motivates a great deal of Emmerich’s work. Just like the bankers who she partners with across the country, she believes that community banks play a vital role in the towns and regions that they serve. Without those banks, something important — a core fabric of the country — will be lost. Helping banks thrive is not just good for business, it’s good for America, she says. And she’s made it her mission to ensure that community banks are part of America’s future.