Banks aren't brands -- the people in them are

397612 07: Pressman Bruce G. Brzozowski inspects the printing process of the new Series 2001 one-dollar bill notes, which contains the signatures of U.S. Treasury Secretary Paul O''Neill and U.S. Treasurer Rosario Marin November 21, 2001 at the Bureau of Engraving and Printing in Washington, DC. (Photo by Alex Wong/Getty Images)
Alex Wong

(MoneyWatch) I've known Bob, my banker, for nearly 20 years. He moved from Merrill Lynch to Citibank which then became MorganStanleySmithBarney. I'd started at Merrill Lynch because that's where my father had banked. When Bob became disgusted by the way that bank was being run, he moved hoping for better. When his part of Citi turned into MorganStanley he hoped for better again. Now he's moved to UBS where it looks -- fingers crossed -- as if finally he's encountered a management that will let him do what he has always wanted to do: look after the interests of his customers.

Everywhere Bob has gone, I've gone with him. Because I trust him and I trust his dedication, I don't care where I bank; I care who I bank with. The banks can waste all the shareholder money they want advertising; none of it moves me. Great service moves me.

Like the time I flew to New York without my wallet and Bob ensured I didn't end up sleeping on the street.

Or the time my son got his first bank account and Bob's sharp eyed assistant Michelle noticed he was about to go over his limit.

Or all the times they've given me good advice, reduced my tax liability and expressed no exasperation over the complexity of paying two a-synchronous tax bills.

Companies that have dispensed with service have also dispensed with loyalty. Once you put everything online and make your customers do all the work, you may hope to keep them by erecting barriers to exit but you can never make them love you. And as consumers get smarter, those barriers get easier to clear every day. Banks waste a fortune building what they imagine to be brands. But the only brands left in these companies are the people who work there. To my family, Bob is the brand.

The same can be said of many industries. Doctors, lawyers, accountants, personal shoppers, hair dressers, furniture retailers, personal trainers, agents of all kinds build meaningful businesses when they care about their clients. When companies treat customers and employees as cost centers, they have lost track of value: people are the reason customers come and the reason they stay. The true value of service businesses lies in the creativity, intelligence, integrity and dedication of the people in them. Without that, it's just a shell game. Why is it so hard for companies to recognize that it is, and always has been, only ever about people?

The Internet has made this more true than ever. Any idiot can cut costs, use technology to eliminate people and offices along with any semblance of service. But the software is commoditized and all the competitors copy each other. Meanwhile, it may be years before the cost of those cuts may appear but they'll show up sooner or later in lost innovation and loyalty. Companies don't have ideas; only people do. And no one is loyal to businesses any more -- only to the people in them. Bob has ideas and inspires loyalty too. He just has to hope that this time he has found a company that remembers what business is all about.

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    Margaret Heffernan has been CEO of five businesses in the United States and United Kingdom. A speaker and writer, her most recent book Willful Blindness was shortlisted for the Financial Times Best Business Book 2011. Visit her on