PHOENIX -- Commerce Bank has forged success by building locations while its competition has been discarding theirs in favor of online and telephone banking. Commerce Bank is run like a retail store, according topresident of retail banking and operations Dennis DiFlorio,with longer hours and Sunday access.
The MGM Grand in Las Vegas was by every standard a top performer$170 million in profits. Every standard but those of president Gamal Aziz, who took over and instead of seeing what was focused on what could be. If a restaurant could seat 100 but was half full and making [image-nocss] money, he described the operation as losing 50 percent. All the hotel's 16 restaurants were remodeled, the property was divided into mini-hotels, and the employee culture was revamped. Room rates now average 70% higher.
Jones Soda CEO Peter van Stolk runs a company that goes against the grain in several ways. For example, the product's packaging is chosen and created by customers, and there is real cane sugar in Jones Sodas, not high-fructose corn syrup, like most of the carbonated beverage industry.
The three mavericks chatted at The WigWam Golf Resort & Spa on Monday, the first full day of The Convenience Retailing Conference 2007, in a roundtable that included Bill Taylor, co-author of Mavericks at Work: Why the Most Original Minds in Business Win,and founding editor ofFast Company magazine. The theme of the three was, as Aziz said, "How do we lead, not follow?"
[See CSP TV Convenience Retailing Conference Video Coverage in this issue of CSP Daily News.]
DiFlorio championed fearlessness in spending. "No company has ever saved their way to prosperity," he said. Commerce Bank wants foot traffic, but it doesn't attract with low rates or cheaper loans. It provides free coin-counting, making it a game with prizes600,000 customers used the service in a recent month; it has Red Fridays for employees and customers, who wear red, the company color, again with prizes. It wanted brand loyalty, it wanted market share takeaway.
"At our core, we modeled ourselves after you guys," he said to the crowd.
Aziz immediately cut parts of the MGM experience, like the theme park bleeding millions of dollars. "It's better to do less and stick to your brand promise," he said. Next, he observed that while the hotel's rooms were 95% full, its guests were only "sleeping there, but partying elsewhere." Sticking to his philosophy that change has to be "radical and rapid," lest colleagues try to dissuade, Aziz ordered the restaurant remodeling, including The Brown Derby, owner Kirk Kerkorian's favorite restaurant. The large risk paid offit's still Kerkorian's favorite, and it's making more money as a steakhouse.
Jones Soda does not compete with the giants, Coke and Pepsi, and after that foundation, many things are possible. Its marketing budget is slimmer because of its Web-based call to customers to provide photos, which are then voted on and selected to adorn bottles. It is available in more and more retailers, it has survived such risks and Turkey and Gravy Soda, and has seen its share price rise from $2 to $15 in three years.
"We'll never be successful playing by their rules," said Van Stolk.
[For more about Commerce Bank, look for the February issue of CSP.]
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