Changing workers' habits may be the biggest challenge for a bank in adopting a sales culture. But a successful cultural change will not count for much if customers find the bank's offices uninviting. Few bankers know this as well as Raymond P. Davis of Umpqua Holdings Corp., the $340 million-asset parent of South Umpqua Bank in Roseburg, Ore. After taking the bank's top job in 1994, Mr. Davis set out to improve the bank's also-ran status among the banks serving Douglas County, South Umpqua's home market. He concluded that one thing the branches needed was a facelift. With the help of Stern Marketing Group, Berkeley, Calif., Mr. Davis transformed 10 bank branches into homey-looking "stores" - sort of like Starbucks meeting Ikea. Customers can drink the bank's special blend of coffee while reading the newspaper, checking a stock quote, or talking to a customer service representative about a financial product. And branch employees do not sit behind desks - they engage customers throughout the store. Mr. Davis says that this new-age retailing has paid off over the past four years. Since the bank created its stores in 1995, it has jumped from third to first place in deposit market share in Douglas County. "We leapfrogged over Wells Fargo and U.S. Bancorp,'' he says. The bank has experienced revenue and earnings growth of more than 20% per year over the past few years, well head of the average community bank. The stores have also attracted attention from large and small banks across the country, and even outside the United States. Mr. Davis says he receives as many as two or three visits a month from people based as far away as South Africa. "Citibank has been here, and one large bank send its entire architectural team.,'' he boasts. "I have had banks come in and they shake their head saying, 'No, I couldn't pull this off,' " he says. "One of the problems that banks have is their failure to execute. You have to take a chance, you have to do something.'' Ms. Stern says that the stores, which she helped Mr. Davis create, are part of a philosophy of enhancing sales by making a bank branch a fun, interesting place for customers to be. "Retail is theatre,'' she says. "You have to understand what the customer wants and gets excited about. Money is sexy, it leads to terrific things in people's lives, yet when you walk into most banks, there's very little that's exciting.'' - John Kimelman

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