Peapack-Gladstone Financial Corp. CEO Doug Kennedy is convinced one of the surest paths to improved profitability for his wealth-focused company lies in elevating its already solid reputation for customer service.
The Bedminster, New Jersey-based Peapack-Gladstone routinely achieves net promoter scores that are significantly above the banking industry's average, according to Kennedy, its president and CEO since October 2012. Still, Kennedy is determined to boost Peapack-Gladstone's customer service to a level commonly associated with five-star hotel brands such as Ritz-Carlton or iconic resorts such as Disney World.
To get there, Kennedy had Peapack-Gladstone's entire workforce of nearly 500 people take a hospitality course offered by a trainer — also named Doug Kennedy — who has spent his career teaching hospitality to staff at some of the most recognizable names in the hotel industry. For Peapack-Gladstone's Doug Kennedy, training bankers in the finer points of high-end hotel customer service is a logical step toward his goal of wielding elite, differentiated service as a competitive tool. The other Doug Kennedy, CEO of the Kennedy Training Network in Davie, Florida, is still a little shocked that the head of a $6.3 billion-asset bank hired him.
"I don't know of many hotels committing to this level of hospitality excellence," Kennedy said. While he has conducted training for several non-hotel clients, typically senior housing facilities, theme parks or other tourism-related businesses, Kennedy said he had never been contacted by a financial institution.
"This was really a first," Kennedy said.
Still a market for service
Kafafian Group CEO Robert Kafafian, who has been working in and around banks since the 1970s, said he, too, is unaware of other banks sending employees en masse for hotel hospitality training.
"I'm not seeing a plethora of this with other banks," Kafafian said. "Every banker does sales training, but that's usually to sell. Then there are bankers that do service training. That's not unusual. However, Peapack-Gladstone is going outside the industry, which is interesting."
However unorthodox, the move appears well thought out, given the leading role that wealth management plays in Peapack-Gladstone's business model, Kafafian said. "It makes sense they would want this concierge-type service," Kafafian said.
Peapack-Gladstone's Peapack private wealth management division reported assets under management or administration as totaling $10 billion at the end of 2022. Peapack Private generated income of $54.5 billion, amounting to about 23% of the company's total revenue for the year.
The wealth management cash flow definitely benefited Peapack-Gladstone on the bottom line. The company earned $74.25 million in 2022, up 31% year-over-year. Its return on assets of 1.28% topped the industry average of 1.12%, according to Federal Deposit Insurance Corp. statistics.
Peapack-Gladstone's Kennedy said his goal is leveraging elite-level customer service to differentiate his bank from competitors. Though Kennedy is looking to improve service across the board, the biggest opportunities are wealthy clients who can move the needle on deposits and assets under management or administration. Generate enough referrals and word-of-mouth buzz and the bank stands a good chance of bringing more higher-level clients into the fold, he said.
"There's a segment of the market that still values good service," Kennedy said. "How do you reach them…It's not about catch phrases or eye contact. How do you distinguish what sets the Ritz Carlton or Disney apart? We're trying to cover all that."
By any other name
Peapack-Gladstone's Kennedy said he had been weighing a commitment to hotel hospitality training for some time but couldn't find a program that satisfied him. He might have bypassed Kennedy Training Network if not for the fact it shared the same name, Kennedy acknowledged.
The initial contact came on a flight to a banking conference in Boca Raton, Florida. "I googled white glove service and sure enough, a guy by the name of Doug Kennedy comes up," Kennedy said. "I downloaded his book on the plane. I realized this is the guy who trains the Ritz Carlton and Disney."
When Kennedy realized Kennedy Training Network's office was a short drive from the conference site, he called asking for Doug Kennedy. Eventually the two connected via a phone call which marked the first in a series of conversations that resulted in the bank retaining the Kennedy Training Network.
Kennedy Training Network CEO Kennedy said he continues to be impressed by Peapack-Gladstone's commitment to improving the service it provides customers. He said his initial face-to-face conversation with the bank's Doug Kennedy at Peapack-Gladstone's headquarters in Bedminster lasted four hours. The first training class, which included Kennedy and other Peapack-Gladstone senior executives, went on for six hours; the typical duration is closer to three-and-a-half hours, Kennedy said.
"I did have my doubts, but they went away once we started and I was in the room and felt the vibe," Kennedy said.
A philosophical attitude
For Peapack-Gladstone's Kennedy, the thing that sets Kennedy Training Network apart from other hotel hospitality options was its focus on the human component, establishing deep, genuine links with customers, relating on a personal, as well as a business level.
Hospitality "is really more of a philosophical attitude," Kennedy Training Network's Kennedy said. "It's caring about as well as caring for. Bringing out the best in others brings out the best in ourselves."
Banking interest in hospitality training is not entirely unprecedented, according to veteran financial services industry consultant Dave Martin, founder of bankmechanics. Ritz Carlton and Disney have offered training courses that bankers have taken. Where Kennedy and Peapack-Gladstone are on the right track is aligning so closely with a people- and service-oriented strategy, Martin said.
"Technology is great but it's table stakes," Martin said. "Technology will not differentiate you…The one thing that moves the needle, the one differentiator we have are our people."
Customers respond to service excellence, but only when it's consistent, Martin added. "If you look at some of the institutions we associate with great service…the reason they are able to generate customer loyalty is not that they continually surprise you, it's that they are consistently excellent," Martin said. "You know what you're going to get. It's avoiding the roller-coaster."
For that reason, follow-up training can often be more critical than the initial sessions, according to Martin. Peapack-Gladstone's Kennedy appears to agree. He has pledged to have Kennedy Training Network and his namesake back for refresher courses and to train new employees.
"I said to Doug, `You're not going anywhere. You'll be back,'" Kennedy said.
