When NationsBank Corp. completed its acquisition of MNC Financial Inc. this fall, management began to undertake the usual steps of renaming branches and standardizing products.

But even before the new NationsBank signs were hung on what had been MNC's 250 branches in Maryland, northern Virginia, and Washington, executives were already looking at ways to retain customers.

"When we acquired MNC, they had close to 900,000 customers, and our main objective was to maximize retention and make the transition a positive experience for customers," said Tom Myrick, NationsBank's senior vice president of customer community marketing. "Our goal was to instill a good feeling about our bank, so that customers would be willing to stay with us as well as deepen their relationship."

From previous acquisitions, management had learned the best way to keep customers was to present account holders with concise, easy-to-read information about the transition.

"By definition, when you go through this type of change, you run a high risk of losing customers during the process," said Mr. Myrick.

Executives began to think about easing the transition last February, when NationsBank announced its intention to exercise its option to purchase MNC under an agreement signed in 1992.

At the time, Hugh McColl Jr., NationsBank's chairman and chief executive, said the acquisition was "of enormous strategic importance, giving the institution a franchise in a vital and growing market" in Maryland, Virginia, and Washington.

Nancy Bush, a Brown Brothers Harriman & Co. analyst in New York, said it was "a bridge acquisition" that gave the bank a strong foothold for expansion in the Northeast.

She added, "So far they have done everything right from retaining customers and holding onto deposits to disposing of nonperforming assets. "

But bank executives said they not only had to please Wall Street, but former MNC customers as well. Since the acquisition of $16.7 billion-asset MNC, NationsBank has touted itself as "the most convenient" bank in the region with its 500 automated teller machines and 332 branches.

"What we wanted to do was to put together a communications program for our customers that would put us in the best possible position for the future."

The bank hired New York-based Wilcox & Associates Inc. to design and help implement a strategy.

"We decided that the best way to get our message across was to communicate with the customers through a single package of information," said Mr. Myrick.

Wilcox developed a package that boiled down essential information so it fit on the inside cover of a 20-page booklet dedicated to introducing customers to NationsBank and the products and services it offers.

"If a customer did nothing more than read the first page of the booklet, they had everything they needed to know for the transition," said Mr. Myrick. "The critical changes in their accounts and all the pertinent information was literally at their fingertips and if that was not enough, there was customer service line available for questions."

"Basically, the booklet enabled us to move the conversation with the customers to the next level, so people knew who they were dealing with and what we were offering," said Mr. Myrick.

The package was initially sent to 650,000 savings and checking account customers.

While it is still to early to gauge long-term retention rates, managers said follow-up research shows the bank's approach was well received.

"Customer responses showed that the packet provided a good, clear picture of who we were and what services we were offering," said Mr. Myrick.

The company also established a toll free line to handle merger- related questions. Approximately 2% of the former MNC customers called with questions, said Rusty Rainey, executive vice president


The bank's research found that 30% of those calls were questions regarding existing products. Some 20% of the callers were interested in purchasing new products. The remaining calls were routine questions about recent transactions, ATM locations, branch hours, and so on.

"When you go through this type of transition and you got the customers on the line talking about products in a positive way, and when you get responses where they are not complaining, you know you have been successful," said Mr. Rainey. "From the experience we have to date, we know we have hit a home run and we look forward to using the same products and strategy with future acquisitions."

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