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Your Money

Consumer Confidence

Aired February 24, 2007 - 13:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

FREDRICKA WHITFIELD, CNN CORRESPONDENT: I hope you are not eating lunch because this will make you barf. About a dozen rats caught on tape after hours at a KFC Taco Bell Store in New York City. The place had recently been cited for health code violations including evidence of rodents and roaches. So now here is the proof the fast food chain's parent company says the restaurant was trying to fix the problem by doing a little bit of construction when it kind of stirred things up. So now the spokesman of that restaurant says they'll stay closed until everything is cleaned up. We hope so.
A look at the top stories in a moment and IN THE MONEY comes up next. Here's a preview.

ALI VELSHI, CNN CORRESPONDENT, IN THE MONEY: Thanks, coming up on IN THE MONEY, spending power. Find out what your happiness as a consumer means to the economy.

Also ahead, fire in the engine room. Learn what a business can do to win you back after a disaster.

And gentle giant, see why a growing company doesn't have to lose its human touch. All that and more after a quick check of the headlines.

WHITFIELD: Listen to that. The hail is just part of the vast, rapidly moving winter storm walloping the nation's midsection. There are blizzard warnings for Colorado to Wisconsin and tornado-bearing thunderstorms threaten the south as well.

And police south of Tampa Bay tracking a kidnapping suspect today. He's described as a man in his 30s, dark skin, about 5'7''. Thirteen -year-old Clay Moore is now safe after freeing himself from duct tape. The boy was grabbed at a bus stop yesterday by that suspect who is still on the loose.

We'll update the top stories at the bottom of the hour. IN THE MONEY begins right now.

VELSHI: Welcome to IN THE MONEY, I'm Ali Velshi. Coming up on today's program. It is all about customer service. Your wallet has teeth; every time you spend you're affecting the economy. We'll look at how your happiness as a customer changes the big picture.

Plus, thinking smaller. Companies you love when they're little can get too big for their breaches. See how a firm can grow and still treat its fans like they matter.

And masters of disaster, how companies in trouble can win back your trust.

Joining me today, Jennifer Westhoven and Polly Labarre. This is a week where anybody could have done the business news. It was not about the numbers, it was about the thing that matters, customers were upset and that was the story.

JENNIFER WESTHOVEN, "HEADLINE NEWS" CORRESPONDENT: Right. And Jetblue had a huge apology to make. They really had some, you know, they had to make it up to customers who had spent so much time screaming, they brought in security. That's how upset the were at the counters and behind the counters. That's real damage to a brand.

VELSHI: Everybody now knows about this story Polly, there's nobody in America who unless you were stuck on a plane who don't know what happened to Jetblue, but is this going to be good or bad in the end?

POLLY LABARRE, CNN CORRESPONDENT: We all feel the pain of this kind of experience, but I think actually Jetblue has a little bit of a forgiveness buffer. The kinds of companies that can forge an emotional bond with customers that say we stand for this worldview, these are the values we stand for. We're not just about a good deal, when I walk into a Starbucks and there's a surely employee or they don't have what I want, I'm like OK they're just having a bad day. I still forgive them, I still seek them out. I think it's the same deal with Jetblue.

VELSHI: That is a story that is going to develop and we're going to see if that pans out, but this is going to be an opportunity for us to discuss other companies that have misstepped and how they've turned things around or haven't. Every time you pull your cash out of your pocket you're adding your own brush strokes to the big economic picture. If you're not happy about giving someone that business those bucks are not coming out of your wallet. In other words, consumer satisfaction has a lot to do with whether America is thriving.

Claes Fornell came up with an index for measuring our happiness quotient. He's the director of the National Quality Research Center at the University of Michigan. He's also the founder of the American Quality Research Center. Claws, how do you measure happiness? I mean you know it, you hear it, you know when somebody's happy or in the case of Jetblue, really unhappy. How do you measure it?

CLAES FORNELL, UNIVERSITY OF MICHIGAN: Well, to correct you a little bit, we don't measure happiness. We measure utility or customer satisfaction, which I think is somewhat less general and more specific and there are implications from having a satisfied customer, having a dissatisfied customer, both through individual companies and for the economy at large.

LABARRE: Claes, companies are offering better deals than ever before, pricing performance is better than ever before. What separates one good deal from the next good deal when you're talking about customer satisfaction?

FORNELL: What really matters is companies that -- well, they can do a number of things and there are several that have found the idea that if you treat their employees well, they in turn will treat your customers well. I would put Wachovia, Costco, Whole Foods in that category. Another very important point here is that for service companies in particular, they have to stop behaving as if they think that they are manufacturing companies.

In the sense that manufacturing typically looks at activity increases and not so much in terms of customer service. And when connectivity trumps service, which is often the case because we can clearly, now distinguish between bad activity and good activity. It's the same like cholesterol; it's bad and good. Some of it is good but it is only good if it doesn't do damage to customer service. And I think they have to get out of this mindset of improving the activity all of the time. A good example I think of a company that was actually punished quite severely is Home Depot. A great focus on efficiencies for activity, but at the expense of customer service.

WESTHOVEN: I think it is so funny that you're saying that customers are just realizing or companies are just realizing they've got to treat their employees really well for them to turn around and treat the customers really well, it is kind of sad. One of the things that came out of your recent survey is that people really found that value often was more important to them than their experience that they had, and I wanted to ask you, Costco did so well. Isn't that an experience, too? Having your big card and going through those cement floors and going through the palettes. You're kind of on a bargain- hunting adventure there.

FORNELL: For Costco, it has done really well on customer satisfaction over the years and you're right. That is somewhat of a different situation, but I think it is important to realize that what has happened for the whole retail sector this time, most of the satisfaction increase actually comes from price discounting, and that, just ask Detroit, it's not going to be sustainable. We know why it happened because everybody was predicting weak consumer spending for the fourth quarter of 2006, so a lot of companies, a lot of retailers went out with heavy discounting early on and that contributed to the rising satisfaction.

Now, it's unusual that it has this big effect; usually service has a much greater effect on satisfaction than price has, but in this case the discounting was deep and it had this effect and I don't think it's sustainable. At least it's going to be more difficult to keep that up in the future.

VELSHI: It's a question if you're running a business or you are a consumer. What's the value proposition? Is it the discount? Is it the fantastic service or is that magic point right in the middle? I don't share Jennifer's view about how Costco is a fun adventure for discounting, but I also know that Americans love getting a deal. To me, Costco is only a value proposition. I'm not looking for service and I'm not looking for someone to help me. Where is the magic point in the middle?

FORNELL: Well, if everybody knew this or if companies knew this they would all do a lot better, but I can tell you this, it depends whom the customers is just like you implied. Take Wal-Mart, for example, hardly anybody goes there to have a great experience and to them it is not so important to have the highest level of customer satisfaction.

There, clearly, price is dominant. Now Costco is a little different. It's still about value, but it is also about the selection that they offer their customers in terms of the types of products, the lines they offer which is much more limited, let's say than Kmart. So they're doing part of the customer's job in essence, at least what we economists call service costs.

VELSHI: Clase great discussion, thank you so much for joining us on this. Claes Fornel joining us is the director of the University of Michigan, National Quality Research Center and the founder of the American Quality Research Index.

WESTHOVEN: When we come back, spinning out. Ford and Firestone are among the companies that have faced big PR emergencies. See how Chrysler's experts can take a firm out of the dark and back into the light.

Plus, too little, too soon, Jetblue didn't have the infrastructure for a major storm and now it's paying. Learn how a business can expand without losing touch with its customers.

And later Dr. Yes. Most doctors' offices treat you like a patient and not like a customer. Find out how former AOL boss Steve Case is doing to change all that.

(COMMERCIAL BREAK)

WESTHOVEN: Public relations nightmares can strike any company, but how a CEO reacts to the crisis can often mean the difference between a forgiving public and a going out of business sale. Our next guest insists there are some simple rules all companies should follow when dealing with a PR disaster. Joining us now is Rhoda Weiss, CEO of the Public Relations Society of America for today's "What Works" segment.

Welcome to the program. I've got a question. You say there are some rules for companies when they have a big mistake. Aren't they almost the same rules for all humans when they make a mistake? Right, clean up, say you're sorry and take responsibility?

RHODA WEISS, PUBLIC RELATIONS SOCIETY IF AMERICA: You need to do it fast, you need to it factually and you need to be forthcoming. This has been a week of disasters for many companies. The fast food industry, airline industry, retail industries have been faced with crisis communications. What people need to do, a CEO needs to get up and respond as quickly as possible, tell what the situation is and how are they going to solve it and how quick it is going to be.

Next, you have to reach your customers, the customers that were affected by it. If you were one of those customers sitting on the plane, I promise you that you are going to be telling all your friends about what happened and how it happened. You need to reach those customers quickly and finally, you need to communicate very quickly in every medium possible.

This isn't like Tylenol was 30 years ago when there were few newscasts out there. We have Youtube and Myspace and whatever happens is going to appear. So fast and factual is the answer.

LABARRE: So, Rhoda, this is fundamentally about leaders taking responsibility, not throwing blame around. One constituency you didn't mention was the company's employees. So if you have to communicate with your customers, don't you also have to heal the rift with your employees and communicate with them?

WEISS: The biggest mistakes that the companies in crisis make right now is they're not communicating with the front-line employees. The front-line employees are the people that have to deal with the customers and we often forget about them. They're the ones that need help; they need healing and need the information before anyone else. They're on the front lines.

VELSHI: Rhoda, it brings to mind Home Depot. Home Depot's sort slow leak wasn't a catastrophe like Jetblue's it happened over time. But the workers didn't like what was going on at Home Depot and that sort of filtered through. I'm holding up the apology that was in the back of major newspapers today from Jetblue. I got to say I can be pretty critical about what business does. The apology reads well. I don't know if it is sincere, it seems to be sincere.

WEISS: I think it is sincere, most likely. Also if you're a customer of Jetblue, in the last couple of days you are getting an e- mail from Jetblue saying we're sorry, this is what we're going to do. You look at what happened to Northwest in '99, they had the same situation as Jetblue. They're doing well now and one of the reason is they promised their customers that nobody would be sitting on any plane on any tarmac for more than three hours and that came through loud and clear. That's what anyone that is going through a crisis has to do. React quickly and tell people what you're going do and be truthful; you need to turn the visions of the visionaries into the reality of the realists as well. One of the challenges CEOs have is they want to give a quick answer and say we're going solve this and it takes a long time to solve things sometimes.

VELSHI: We started the week talking about Jetblue and we ended the week with something that wasn't nearly the same in scope but it was a pretty bad picture. Rats running around a KFC.

WEISS: I saw them on Youtube.

VELSHI: This is the thing. We tried very hard. We wanted to talk to the company and they sent us a response about health and safety and they said we've talked to the franchisee who is actively addressing this issue. It reads differently than the Jetblue apology. It's a piece of paper as opposed to "The Boss," and you know, I don't know. Maybe time will allow them to handle that better, but this is a company that's faced crises a few times in the last few months. What would you tell them?

WEISS: I would tell that CEO if he heard about it in the middle of night to jump out of his pajamas and start making calls and respond to the media as soon as possible. You can't say no comment, you need to respond and talk about the issue and what you're going to do to solve that issue. We have a very unforgiving public. Companies are not on a pedestal blindly admired by a grateful public, people are chopping away at it and you're going to see it on Youtube like I did and most other people did this morning.

WESTHOVEN: Rhode, do you think a letter like this or these kinds of responses that this is a great time for you to measure a CEO, really, their character and their integrity, how they stand up in a crisis like this, whether or not they say wow, I'm sorry. We broke our word to you or whether or not they point the finger at some small business owner?

WEISS: CEOs today have to demonstrate leadership, have to take responsibility, have to -- the buck stops at the CEO and the CEO needs to be sincere. He needs to be quick. He or she needs to be quick with the answer, talk to the employees. You don't get the message out right away; people are going to mistrust you. There was an interesting study done in the late '09s by Oxford Executive Research Center saying those CEOs that took care of crises quickly and well saw their stock increase by 7 percent, those who didn't respond well saw their stocks decrease by 11 percent. So the CEOs have to show courage and stamina and leadership and if they don't, there's no witness protection program for them. Everyone's going to be watching them.

WESTHOVEN: All right. Rhoda Weiss, thank you very much for joining us from Los Angeles today.

WEISS: Thank you.

VELSHI: Coming up after the break, return your seat back to the upright position. After a rough week for Jetblue, we'll see if the turbulence hit Wall Street.

Also ahead a bank where they don't keep bankers hours. Commerce Bank has a schedule that is about convenience not tradition. We'll speak to the president.

Help wanted waiting to be waited on is one thing to that drives customers crazy. Stick around for some common problems and ways you can solve them.

(COMMERCIAL BREAK)

WESTHOVEN: So we know how passengers reacted to Jetblue's problems last week, but what about Wall Street? We're going to go now to Susan Lisovicz who is at the New York Stock Exchange to find out how Jetblue's stock performed and what happened to its competitors over the week amid this awful story of people getting stuck and a big apology. Susan how did it play out there?

SUSAN LISCOVICZ, CNN CORRESPONDENT: It played out predictably, Jennifer. Jetblue shares plummeted, they were down 6 percent on the week, but I should also say that the airline sector was also grounded as well. Down about 1 percent because among the many things that you have to deal when you're running an airline, not only the ferrous competition, not only the high fixed labor costs like your personnel, pilots, unionized crews, but also oil prices and they were at $61 this week and that is the high for the year. So, that is something, obviously that hurts airlines so Jetblue is taking the brunt of it, but most airlines were getting hit, too.

WESTHOVEN: Well aside from the higher oil prices, you know Jetblue now is promising that they're going make changes and this isn't going happen again. They might have customer refund policies and all of the airlines are saying they'll try to work on a passenger bill of rights. They don't want Congress to do something on their own. Is there any word from analysts that they may end up costing us more? I mean if they put a lot more infrastructure in, it might be harder for Jetblue to offer such low prices.

LISCOVICZ: That is right, I mean that's a very good point. In fact, Raymond James was one of the analysts who says they can't really just figure out how much it's going to cost Jetblue, not only for the refunds, the lost money from cancellations, but also all the additional personnel that they say David Neeleman said we have to hire to make sure this never happens again and that we'll pay if it does, if there's anything like it we're going give you full refunds. We're going get you off the plane and we'll cancel it much quicker and so on and so forth.

Yes, that's one of the things, I think it was Richard Branson who is a billionaire who said the quickest way to become a millionaire is be a billionaire and start an airline. It's ferocious between the competitions, all of the security, the constantly changing security. Your oil prices and so on, it's very tough these days and I think that while Jetblue gets high points for its crisis management, it was out there and it takes responsibility, it says it's making changes, if it happens again we all know that's going really hurt it, but even so, how does it get back into profitability? We know this quarter is a wash in terms of losses.

WESTHOVEN: Right. We know that Jetblue, maybe they do have a forgiveness factor there because they did have such high marks before this happened. Airlines, you know, in our show we talk about so much customer satisfaction, they've been in one of the lowest areas in terms of pleasing their customers. We've all seen that at the airport, long lines, and no service.

LISCOVICZ: Some of it's understandable in the post 9/11 world, but I think the Valentine's Day meltdown was a completely different realm and to its credit, Jetblue has taken responsibility for it.

WESTHOVEN: All right. Susan Lisovicz from the New York Stock Exchange. Thank you so much.

LISCOVICZ: You're welcome, Jen.

WESTHOVEN: Nice to see you.

Goliath, meet David. We'll show you why big box stores like Home Depot maybe losing business to the mom and pop and here is the hint it's all about service.

Plus we'll show you which big companies are getting it right. Polly is going to listen to your gripes and tell you where to get the service you deserve.

We want to hear what you think about the show. Send us an e-mail our address is INTHEMONEY@CNN.com. Drop us a line and tell us what's on your mind.

(COMMERCIAL BREAK)

WHITFIELD: Hello. I'm Fredericka Whitfield in Atlanta. This just in out of Iraq out of the Anbar Province outside of Baghdad. We understand that a truck has exploded, this taking place as people were leaving a Sunni mosque. It has now lead to the deaths of at least 39 people and the injuries of 64. We're all on top of this story checking out our sources to find out more about the circumstances that have led up to this truck explosion in the Anbar Province of Baghdad, leading to 39 people killed, 64 injured all people who were leaving a Sunni mosque there.

Meantime, here in this country, a search in southwest Florida for a kidnapping suspect. Thirteen-year-old Clay Moore, told authorities that the man kidnapped him at gunpoint from a school bus stop. The boy says he freed himself after being driven to a remote area and tied up.

Coming up at the top of the hour, the latest on severe weather in the U.S. midsection. Now back to more of IN THE MONEY.

VELSHI: The passenger nightmare at Jetblue last week infuriated customers of the airline. In some cases were trapped on planes for more than eight hours. That was an extreme case, but Allan Chernoff reports that satisfaction with customer service in many businesses is running low and consumers are fighting back.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN CORRESPONDENT (voice over): Plumber Linden Price tries to avoid shopping at Home Depot because he says sales people often can't find parts he needs.

(BEGIN VIDEOTAPE)

LYNDON PRINCE, PLUMBER: I have to go and search it off myself. Here, you know, I always get great service from these guys.

CHERNOFF: These guys Victor and Richie Wishnie have been in business longer than Home Depot. They say their store; Orange Valley Hardware in Orange, New Jersey is taking customers away from the giant competitor.

RICHIE WISHNIE, OWNER, ORANGE VALLEY HARDWARE: Someone comes here and they don't have to search a warehouse like Home Depot to find someone to help them. We'll be able to accommodate them, prepare them and more of a personalized situation, and we'll take care of the business with them and they will come back. CHERNOFF: Home Depot this week reported its first annual profit decline. The home improvement retailer says it hears the complaints and is working to improve.

JOSE LOPEZ, HOME DEPOT: The service is something you just can't take for granted and a little bit of slippage can have a huge impact on your brand.

CHERNOFF: Home Depot is not alone. At many retail stores it's become harder to find sales help. At the airport, too many passengers suffered through nightmare delays not just on Jetblue. On the phone, it's tough to reach human help without navigating through voicemail hell.

UNIDENTIFIED FEMALE: Press three. I'm sorry. I don't recognize your selection.

CHERNOFF: Why is it that good customer service is so hard to come by these days? Many companies under pressure to boost profits have been cutting service staff figuring they can let customers do more of the work. Increasingly, we're becoming a self-service society.

UNIDENTIFIED FEMALE: Please scan your next item.

CHERNOFF: It's not all bad, at supermarket scanning and even bagging your own groceries can save time as can checking in by yourself at an airline kiosk, but in service businesses, those who still provide real service are thriving. Commerce Bank one of the fastest-growing banks on the east coast is open seven days a week and in the evening. One reason Florence Benjamin switched to Commerce.

FLORENCE BENJAMIN, COMMERCE BANK CUSTOMER: You get here by seven or eight and they're open to you. Everyone is always friendly, available to you, ready for you.

KATHLEEN PETRONIS, COMMERCE BANK BRANCH MANAGER: It's all about customer experience when they walk inside the doors. That is our motto.

CHERNOFF: A growing number of customers are willing to pay upscale prices at service oriented Nordstrom's Department Stores where profits are soaring.

Consumers are fighting back, not just by switching to competing stores, they're doing more shopping online and if they're unhappy with their shopping experience or their purchase they can easily let the world know. Everyone is a critic at Epinions and other online review sites. Consumers may still get frustrated but these days they are empowered, able to fight back as never before.

UNIDENTIFIED MALE: Thank you very much.

CHERNOFF: Allan Chernoff, CNN, Orange, New Jersey.

(END VIDEOTAPE) VELSHI: Now, Allan is talking about customer service and customer service is a natural offshoot of running a business well. Polly Labarre has made a career out of following companies that are well run and there's a very tight correlation between a well-run company and a company whose customers are happy with them.

LABARRE: I just spent a couple days at the Ritz-Carlton for research; it was not just for fun. They're really the gold standard when it comes to customer service. They have a simple idea; it's like being at home with mom. So if something goes wrong she just takes care of it. They don't call the manager, it just gets done and that's what the hardware store experience is about. They're taking care of me personally.

VELSHI: We obviously went to the streets of New York, a fantastic laboratory to ask people what their beefs are and what their concerns are. Let's listen to this one.

UNIDENTIFIED MALE: I think going into retail stores and not being approached at all or looking for help and not getting help, I think is disgusting.

WESTHOVEN: I don't know. I like being approached necessarily, but when I want help, I want to be able to find someone.

LABARRE: They have to be able to gauge it. Great example is the Apple Store and these are dazzling emporiums for computers and ipods but they figured out two things. They have this genius bar in the help where you have free Mac help and line up without an appointment and people are willing to wait for that because it is a great experience. The other thing is they bring the checkout counter to you. So you're walking around with an ipod, thinking maybe I will checkout, they come up to you with this easy pass system, wireless, paperless.

VELSHI: It freaked me out. I thought this woman was trying to steal my identity because she came up and said do you mind if I just check you out here and I can e-mail you the receipt. No, you freak.

LABARRE: You're not part of the Internet generation, are you?

VELSHI: Clearly this is working because they've made the Apple Store a destination.

WESTHOVEN: I loved it. It was near my old apartment.

VELSHI: You feel cool. You feel like they care about you.

WESTHOVEN: The cool thing about that too is they collect your e-mail address right there on the spot because they e-mail you a receipt. Not only are they collecting e-mail addresses, but you get a receipt an hour later and you're sort of impressed by the whole experience.

VELSHI: Let's take another listen to someone else we talked to on the street about what bothers them. UNIDENTIFIED MALE: There have been situations when I'm at a restaurant and if it takes too long or service is bad I'll just walk out immediately.

WESTHOVEN: Yes.

LABARRE: The dining out is about the service experience as much as it is about the food. If you don't get both right you're toast as a restaurant chain. One that firings it out on both levels is cheesecake factory. If you can spare the calories, not only are waistlines growing quickly, but they're growing and they manage to keep this friendly, fun, engaging service no matter how busy their restaurants are.

VELSHI: They're often busy. This is quite an interesting value proposition because you always have to wait. They don't take reservations.

WESTHOVEN: But they tell you how long you have to wait and it's true.

VELSHI: They give you the little electronic thing that lights up and buzzes.

LABARRE: And with a smile and in good spirit and it's a really simple thing. Companies that fill their organization with happy people have happy customers.

VELSHI: I took someone on a date there.

LABARRE: You took someone on a date there?

VELSHI: You know why? Because the value proposition at the cheesecake factory is it feels like a much bigger experience. You know the average check there is $16 bucks.

WESTHOVEN: Did you talk to her about value propositions?

VELSHI: I did. That's how I got a second date. OK. Moving on. Let's listen to one more person.

UNIDENTIFIED FEMALE: When you're making a phone call and you have a simple question to ask, it would be great to have someone answer the question and not have to go throw a whole rigmarole to get to a person.

VELSHI: That's got to be the top of everyone's list.

WESTHOVEN: My favorite is when you put in your information and then the person says will you tell me your information.

LABARRE: You have to be a personal detective, for my bank it's pound, seven, sir, star and for the airline it's zero, zero, six, seven and companies are spending billions of dollars to it's automate their support. Have you heard an executive saying we'll get better by listening to the voice of the customer? Memo to the boss, answer the phone, right? It's absolutely aggravating.

VELSHI: There are ways to figure out, some people have done work on -- there's a website.

LABARRE: Gethuman.com.

Paul English, an Internet entrepreneur just out of his own rage against the machine started this cheat sheet. So basically you can look on and see, American Express, press zero, zero, zero and ignore the prompts and that's how you get through. All of the cheat sheets are up there, but it's become this clearing house of blogs and complaints and all kind of tips on how to get around really bad customer service on the phone.

VELSHI: One of our producers Jake gave me one yesterday that I never heard before. He said just yell into the phone. Apparently that triggers.

LABARRE: The louder you yell and the harder you press the buttons. That helps, too.

VELSHI: That will help my rage.

We have a lot more to come on this topic on IN THE MONEY. Up next, change agents. Commerce Bank will count your change whether or not you're a customer. We'll speak with the president about how moves like that have been boosting business at that company.

And later there's a reason they call it a waiting room. Find out how a former online mogul is making medicine more customers friendly.

(COMMERCIAL BREAK)

WESTHOVEN: We're talking a lot about customer service today, the good, the bad, and the ugly. Well, there's one company that keeps popping up in the good category, it's Commerce Bank. We are joined by its president Dennis Daforio. Welcome to the program. I couldn't help, but noticing the literature that your commitment at Commerce Bank is to wow the customer and that you even give out wowee awards to employees who are being wowee. What are you talking about?

DENNIS DAFORIO, PRESIDENT, COMMERCE BANK: Well, for us it's all about service. It's all about service and convenience, in our business in the banking industry, for years, banks has been back on their heels. It's been a low growth, low cost, low service operation and from the get go we looked to reverse the trend here and kind of bring humanity back to banking and create a great customer experience around the utility of banking.

LABARRE: Dennis, you have all kinds of great customer-focused innovations. Your store hours, you're open seven das days a week, sometimes twelve hours a day, you got these great coin-counting machines like arcades. What's the secret to becoming a service cult as you call yourself? Your people, every time you walk into a store you meet with someone with such energy and such enthusiasm and such knowledge. What's the connection between brand and culture? DAFORIA: Well that is one of the cool things that we do and I have to tell you I have one of the coolest jobs in the world because I get letters from customers every day and it's amazing, when you read the letters and these customers are passionately pouring their heart out saying I love your bank and it's never about the hours. It's never about the products; it's never about the pricing. It's all about the people, and it's all about what our people do day in and day out to wow our customers with service and that really speaks to the culture of on our organization.

This is something that we didn't just wake up some day and wave pixie dust and we're all of a sudden turn into this customer service machine. We're built from scratch this way. It's baked into our DNA. So everything that we do centers around the customer and, believe me, we have a cult it's just an amazing thing to see and to experience.

VELSHI: Dennis, cults tend to be to have limited membership. If I had one bank, one branch I would run it spectacularly and if it became ten I would run it pretty well and if it became a hundred now you have close to 500 branches. At some point, name me one company maybe you or Polly can that has made it all the way, it keeps growing, it keeps getting customers, we would like you to grow.

DAFORIA: Yes.

VELSHI: At some point you can't. Can you? Can you keep the cult going?

DAFORIA: Absolutely. People said that when we had ten branches and when we had a hundred branches and 200 branches, 300 branches and particularly in the banking community said this convenience thing is a cool thing, it is a cute thing, but it will never last. We see this going on forever and a day. One thing about size, it breeds momentum and for us, it's about, you know, having enough people on a lunatic fringes, we call it who are really passionate and believe that what we're doing is very cool and we truly believe that we're building a company that's very, very special and with that growth people see the opportunities and they pour their heart and soul into it and, you know, someone mentioned earlier about having fun and that's what we tell our guys and even when we interview people is bring your sense of humor to work because we want you to have fun.

If you wake up in the morning and you say this is cool and I can't wait for what I'm doing. Life is too short, get out. It's all about having fun and creating a great environment and actively engaging the employees in the business.

WESTHOVEN: Dennis I love that you said you have one of the coolest jobs out there.

DAFORIA: I do.

WESTHOVEN: There aren't too many people on the program who come right out and say that.

VELSHI: And really, who were bankers? DAFORIA: Bankers typically aren't cool, but --

WESTHOVEN: I want to ask you. Your call center in New Jersey, I'm originally from New Jersey, I love that idea, but as you get larger and larger, how can you possibly keep up that call space, because there is much as you are having fun, you're publicly traded, right? You have stockholders to please.

DAFORIA: But this is all about creating fans not customers. This is about building brand loyalty. You've got to remember in our industry, the banks are looking to cut costs. They didn't sit around and say here is a way we can enhance the brand or here is a way that we can really surprise and let our customers by having our customer service phones answered half way around the world. I'm proud to say when you go to human.com we were the only bank to receive an A in the report card there.

That's because our phones are answered by human beings and those human beings are in America. People appreciate service. The consumer is willing to pay a premium and slightly higher prices to get great service. You know that from your everyday experiences. I see it every day in just things that I try to do outside of the banking business. My wife reminds me that not everybody wants to work for me but I want to go ahead and fix everything because they make you crazy.

LABARRE: Dennis so this is really the difference between a is service-based company and all the rest that you look for opportunities to strengthen the bond with the customers as opposed to cut costs. Tell us a little bit about your penny arcade innovation? I think this is the greatest thing to do.

DAFORIA: It was so cool, I mean, banks typically do not take coins. They hate it when you give them coins, it's like you're bothering them and they force the customer to kind of put the coins in these ridiculous sleeves and roll it and put your name it and everything there is to know about you and maybe, maybe you'll get credit for those coins in a day or two or a week or two after they count it. We looked that the and said we're in the money business. So shouldn't we basically be taking care of that need and that utility? People have jars and jars of coins. What do they do with it?

So, obviously we went ahead and found a way to mass produce these machines and get these machines in production in every one of our stores, it's a free service to provide for customer and non-customers. When I talk about the fun factor here, beyond the basic utility of providing free coin counting service, we made an experience out of it, we made it a fun experience out of it and there's a screen and a character called penny arcade that actually interacts with the customers. One of the things we learned as we spoke to our customers, they never know how much money they have in the jars so we made a little contest, can you gets how much money is in there, if you can guess within a few bucks we you win a prize and then we saw the moms and dads holding the kids up. Let's put a kids counter so the kids can work the machines. It's amazing. We have somewhere between 5 and 600,000 customers come in and use the penny arcades machine. Each one of them leaving with a smile on their face and a lot of them leaving with prizes and little kids, their hearts are content. They want to take mom and dad back to the bank.

VELSHI: Jennifer, ask him what the prize is.

WESTHOVEN: Well?

VELSHI: What's the prize?

DAFORIA: What's the prize? It's not free money, but it's these handy dandy pens that we give away and things like this.

VELSHI: Can you believe that?

DAFORIA: You got to remember most banks chain their pens down. We'll air drop these guys, you know?

WESTHOVEN: All right. Well pens, lollipops, and dog biscuits they still make banking sound fun. So thank you very much, Dennis Daforio the president of Commerce Bank. I know I'm sure a lot of our views are thinking why doesn't my bank stay open late?

VELSHI: You are actually from New Jersey, the best customer service thing about New Jersey, by law someone has to fill your gas for you.

WESTHOVEN: Yes and it's not more expensive.

VELSHI: There's a value proposition.

WESTHOVEN: All right.

VELSHI: All right. Coming up next on IN THE MONEY, medicine gets a 0convenient implant. Find out about Steve Case's idea for making basic care as easy as walking in. And it is time to dig into our e- mail bag. We'll read some of your e-mails from last week's question of the week. How much money do you think you need to make each year to be part of the middle class? Stick around.

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WESTHOVEN: In 1985 Steve Case co-founded America Online. Less than two decades later at its peak the service boasted 27 million subscribers. Case has since moves on, this weeks "Life after Work" finds him turning his entrepreneurial spirit to a new challenge, tackling the problems of America's healthcare industry.

UNIDENTIFIED FEMALE: You've got mail.

(BEGIN VIDEOTAPE)

STEVE CASE, CO-FOUNDED AMERICAN ONLINE: I just love building businesses that can change the world.

VALERIE MORRIS, CNN CORRESPONDENT (voice over): Steve Case co- founded America Online and eventually spearheaded the mega merger of AOL with Time Warner, CNN's parent company. But no matter how large his company's become, it is the creative process, which drives Steve Case.

CASE: AOL was a 20-year journey. In the first ten years it started with dozens of people when we merged with Time Warner and suddenly it was tens of thousands of people. It was a whole different scale. And I think I work more effectively in the pioneering stage.

MORRIS: Amidst the bursting of the dot com bubble AOL-Time Warner's share price plummeted. Under pressure, Case resigned as chairman of the company nearly four years ago, still defending the merger, despite its disastrous consequences for stockholders and the bottom line.

CASE: There's no question strategically the merger was a good idea for both companies and the execution was difficult particularly in the first few years.

MORRIS: Today Case is focusing his zest for innovation on a new challenge, hoping to revamp the healthcare industry.

CASE: It's 20 years for AOL and other companies to make the Internet more of a mainstream phenomenon and it will probably take 20 years to revolutionize healthcare and make it more consumer centric.

MORRIS: Case is the principle investor in RediClinic, a string of small health care facilities set up at high-traffic areas like drug stores. They're staffed by nurse practioners who provide preventive care and treat common medical conditions in sessions averaging 15 minutes. There are no appointments and fees are moderate.

CASE: It's a way to provide a higher level of convenience and a higher level of affordability than presently exist.

MORRIS: As Case demonstrated, he is not afraid to taste his own medicine.

UNIDENTIFIED FEMALE: Didn't hurt at all!

MORRIS: Valerie Morris, CNN, New York.

(END VIDEOTAPE)

WESTHOVEN: Ow! We'll keep our eye on that company and we'll be back with more IN THE MONEY.

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WESTHOVEN: Now it's time to read your answers to our question about how much money do you think you need to make every year to be considered middle class?

Well, Stephen wrote, "The idea of middle class America really took hold in the 1950s and to live like that in America today, you need to make $125,000 to $200,000 a year, but the official range for middle class income is probably some ridiculously low number set by someone in the government." I believe that.

LABARRE: Yes, I do, too. Robert said, "It's not about a number. If you can't afford the things your middle class parents could, then you are no longer middle class. That's what's happened to a lot of us since the Reagan years. If you aren't a business owner or Wall Street success or a big corporate executive, then you are dirt in America today."

WESTHOVEN: And Pam in Lincoln, New Mexico writes, "You need to make at least their $150,000 a year to be in the middle class. Most of us who considered ourselves middle class in the 1980s are now the working poor. God help any of us with manufacturing or teaching jobs." She has a good point.

VELSHI: Interesting that everyone seems to feel that the trend is what's affected them. You have to earn more today relative to what your parents did or you did in the '80s.

LABARRE: It's the status treadmill you're measuring yourself against other people, too.

WESTHOVEN: Although someone said they want the same as their parents did, which isn't more than their parents.

VELSHI: We're all earning, theoretically, more money, but -- so we have to earn more than more. Is that a business term?

WESTHOVEN: I guess so.

All right.

Next week's e-mail question of the week, if you're treated poorly by a company what would it take for you to come back and give it a second chance? Send your answers to us at INTHEMONEY@CNN.com.

VELSHI: Thank you for joining us for this edition of IN THE MONEY. Thank you to Jennifer Westhoven and Polly LaBarre. We will see back here next week Saturday at 1:00 and Sunday at 3:00. See you then.

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