more than a health club

matters
VOLUME 3, ISSUE 4
®
INSIGHTS FOR BUSINESS & LIFE
Daniel Levin, CEO
East Bank Club
MORE
THAN A
HEALTH
CLUB
plus:
EAST BANK CLUB
GROWS BY
ADAPTING TO
MEMBERS’ NEEDS
IN BIG WAYS
BUSINESS ALL TERRAIN TAKES CLIENTS OFF BEATEN PATH
STRATEGY MITIGATE THE RISKS OF A CYBERATTACK
Legacy
William
*
Family is a top priority for us. Which is why we want to know that the
decisions we make now will ensure a bright future for us, our children
and our grandchildren. Our FirstMerit Client Advisor understands our
aspirations and helped us develop a long-term investment plan. He also
helps us manage our day-to-day banking needs so we can focus on what’s
important. We have peace of mind knowing our legacy will live on.
TO L E A R N MOR E A B O U T
F I R S T M E R I T P R I VA T E B A N K , C O N T A C T :
David Taylor, Senior Vice President,
at 312-775-4909 or [email protected].
Follow the latest market trends
@firstmerit_mkt
*William reflects a composite of clients with whom we’ve worked; he does not represent any one person.
Non-deposit trust products are not insured by the FDIC; are not deposits or obligations of FirstMerit Bank, N.A, or any of its affiliates; are not
guaranteed by FirstMerit Bank, N.A or any of its affiliates; and are subject to investment risk, including possible loss of principal invested.
Member FDIC
4011_FM15
>>>
FIRST WORD
Business concerns
T
he economy across the Midwest
continues its modest but steady
improvement, and I hope your
IT’S GOOD TO
business is feeling the positive effects of
KNOW THAT YOUR
that steady upswing. I also hope you’ve
FINANCIAL PARTNER
been taking advantage of the vacation
season that is winding down, getting
IS THERE FOR YOU
away from the office for a well-deserved
YEAR-ROUND WITH
break and personal battery recharging.
If you’re like me, though, you never
completely disconnect from your work.
All too often, concerns about the
SOLUTIONS TO YOUR
CHALLENGES.
business bubble their way up to top of
mind when you should be out relaxing
and having fun. It’s good to know
marketing officer, useful as she details
that your financial partner is there for
how individuals and businesses can take
you year-round with solutions to your
advantage of our online and mobile
challenges. If cybersecurity and concern
Money Movement services.
about your business’s vulnerability are
We have plenty of other great articles
on your mind, we can offer some food
in this issue, all focused on helping you
for thought. In this issue of MeritMatters,
make the most of your business, your
Scot Pflug, FirstMerit’s chief information
time and your money.
security officer, walks you through
Thank you for reading MeritMatters.
some useful tips for minimizing risk of a
We look forward to working with you to
cyberattack at your company.
help you meet your financial goals.
PAUL
GREIG
Whether you’re sneaking in a little
work while relaxing at the beach,
hiking the trails, having a comfortable
PHOTO BY JESSE KRAMER
staycation or forgoing vacation
altogether, we’ve made it easier than
ever to transfer funds between your
FirstMerit accounts and those at other
financial institutions from your mobile
Paul Greig
Chairman, President and
Chief Executive Officer
FirstMerit Corp.
device or computer. I hope you’ll find
the article with Julie Tutkovics, our chief
MeritMatters® • 3
FIRST WORD
>>>
matters
®
P E T ER
G IL LESPIE
VOLUME 3, ISSUE 4
PUBLISHER
MICHAEL MARZEC
MANAGING EDITOR
TODD SHRYOCK
CONTRIBUTING EDITORS
BROOKE N. BATES, ERIK CASSANO,
SUE OSTROWSKI
ART DIRECTOR
STACY VICKROY
Meeting market
demands
A
s the economy continues to grow,
many businesses are not only
surviving but thriving. In this issue
of MeritMatters, we share the stories of
Chicago businesses that are continuing
to innovate to meet market demands and
making the region a better place to work
and live.
We talk with Daniel Levin, who turned
three acres of former railroad land along
the Chicago River into a health club that
redefined fitness facilities and transformed the surrounding neighborhood.
Today, the 450,000-square-foot East Bank
Club invests in constant improvements
through state-of-the-art equipment,
superior member service and ever-increasing amenities to deliver a firstclass experience that sets a standard of
excellence.
We also speak with Brook Jay and
Sarah Eck-Thompson about how their
roles as marketing executives at the
Atlanta Olympic Games sparked an
idea that became marketing firm All
4 • MeritMatters®
Terrain. Today, the company creates
marketing campaigns that travel below
the big-brand noise, creating personal
connections with consumers.
And we learn how Housing Forward,
formerly West Suburban PADS,
transitions people from housing crisis
to housing stability. Executive director
Lynda Schueler and her organization
provide a continuum of services, from
emergency shelter to employment
readiness.
We hope you enjoy this issue of
MeritMatters and take away some tips
about how to succeed in your own
business. We’d love to hear what you
think.
Peter Gillespie
President and CEO
Chicago Region
FirstMerit Bank
PROJECT MANAGER
KATE CASTROVINCE
COVER PHOTO: SARA STATHAS
IF YOU WOULD LIKE TO RECEIVE FUTURE
ISSUES OF MERITMATTERS®, EMAIL US AT
[email protected].
MERITMATTERS® IS PUBLISHED BY
SBN INTERACTIVE, 835 SHARON DRIVE,
SUITE 200, WESTLAKE, OH 44145,
(440) 250-7000.
MeritMatters® is solely intended for general
information purposes. It is not intended to
provide – nor should it be used in lieu of –
financial, accounting, legal or other professional advice. It does not constitute a
recommendation to buy or sell any security or
adopt any investment strategy. The publisher
assumes no liability for readers’ use of the
information contained herein. The information was obtained from sources believed
to be reliable, but such information is not
guaranteed as to its accuracy. Readers should
seek professional assistance with regard to
specific matters. All opinions expressed in
MeritMatters® are those of the authors or
sources and do not necessarily reflect the
views of FirstMerit Bank or FirstMerit Corp.
Securities and Insurance products are:
Not FDIC insured. May lose value. No bank
guarantee. Not a deposit. Not insured by any
federal or state government agency.
matters
®
VOLUME 3, ISSUE 4
table of contents
14
Cover
East Bank Club grows by adapting
to members’ needs
6
13
Ask the Expert
Business Matters
Marketing firm All Terrain takes clients
off the beaten path
Briefs .................................................................. 9
Events, highlights and attractions
Ask the Expert . ................................................10
– Understanding the new chip-enabled credit card rules
– How to mitigate the risk of a cyberattack at your business
Services give businesses financial
convenience and control
Personal Finance .............................................12
Benefits of an expanded FirstMerit
PrivateBank relationship
Investments ......................................................20
Millennials: Smartphones, skinny jeans,
and a $30 trillion inheritance
Community . .....................................................22
Housing Forward transitions people from
homelessness to security
MeritMatters® • 5
BUSINESS MATTERS >>>
BUILDING AN EXPERIENCE
All Terrain has created a niche in the marketing space by taking its clients
off the beaten path BY ERIK CASSANO
A
ll Terrain was born out of a whisper.
In 1996, Brook Jay and Sarah Eck-Thompson were young marketing executives dispatched
to the Olympic Games in Atlanta. For the twoweek run of the Games, they were responsible for coordinating all of the entertainment at the athletes’ village.
“We were on-site for well over a month at Georgia Tech,
near downtown Atlanta, where the athletes’ village was
located,” Jay says. “Obviously, when you’re there for that
long, you become immersed in the environment.”
And that environment was a crucible of marketing
messaging — loud, forceful and relentless. It so thoroughly
saturated their senses that Jay and Eck-Thompson became
numb to it.
“Everywhere, there were really big brands just shouting at you,” Jay says. “McDonald’s, Coca-Cola, Anheuser-Busch, brands like that — all just yelling at you in one
way or another. We were there as both marketers and
consumers, and through both lenses, the level of noise just
struck us. When everybody is shouting, you really don’t
hear anything.”
But through all of the noise, Jay and Eck-Thompson
noticed one company’s marketing campaign. It was small
in scale, quiet in approach and connected with consumers
on a personal level. And it forever changed the way the pair
looked at marketing.
“Champion, the sportswear company, created a unique
interactive experience where they had set up a series of cubby holes with blank T-shirts inside,” Eck-Thompson says.
“They encouraged people to take a shirt, write a message on
it and trade it with someone else.”
People lined up at the Champion stand to take part.
Amid all the noise, Champion had one of the most popular
branding initiatives at the Games.
“It was real,” Eck-Thompson says. “It was a quiet whisper campaign — natural and authentic. People would use
these shirts as an opportunity to interact with the brand and
with one another. It spoke to us about the idea of marketing
as storytelling, and how something so simple could influence
the perception of a brand.”
Jay and Eck-Thompson used their Olympic experience
as the launch pad for All Terrain, the Chicago marketing
firm the pair co-founded in 1998. With All Terrain, Jay and
6 • MeritMatters®
Eck-Thompson set out to create marketing campaigns that
travel below the big-brand noise, creating personal connections with consumers, just as Champion had done.
EXPERIENTIAL MARKETING
From that initial blueprint, All Terrain’s philosophy evolved
into what is now called experiential marketing. It’s an
integrated, channel-agnostic approach to marketing, and
All Terrain has created its unique version. Called Strategic
Experience Design, it is the process for creating innovative
interactions between people and brands that tap into the
deeper meaning of the role a brand plays in people’s lives.
“Many marketing firms approach branding campaigns
from the standpoint of the brand itself,” Jay says. “But as
consumers, we don’t interact with brands like that. That’s
where the idea came to approach branding through the
lens of the consumer and to design messages that can be
integrated across many different channels.”
A branding message has to, above all else, convey
the brand’s value to consumers, and do it within a very
short time frame that must be optimized. It’s up to Jay,
Eck-Thompson and their team to find those opportunities
to win over consumers. When you deal in unique, customized — and often subtle — marketing campaigns, creating
those opportunities can become a challenge — in some
cases, going against commonly held marketing wisdom.
In 2010, All Terrain was hired to help design the launch
campaign for the Cosmopolitan of Las Vegas. But launching the brand was only the beginning.
“We started out by introducing the brand to consumers in
the target demographic,” Jay says. “So for the first year of the
campaign, we sponsored events like the Sundance Film Festival and Lollapalooza, trying to build the brand and connect
it with a consumer set, which was dubbed the curious class.
And we were very successful doing that. After a year, the hotel
was running at a 98 percent residency rate.”
The campaign helped bring in hotel guests, but many
of those guests were departing during the day to gamble at
other casinos and dine at other restaurants. So the Cosmopolitan of Las Vegas came back to All Terrain with a new
puzzle to solve: how to turn the resort’s casino and other
properties into high-performing revenue drivers.
continued on page 8
“WHEN EVERYBODY
IS SHOUTING, YOU
REALLY DON’T HEAR
ANYTHING.”
PHOTOS BY SARA STATHAS
– BROOK JAY
(L to R) Sarah Eck-Thompson
and Brook Jay, All Terrain
MeritMatters® • 7
“It’s an unusual move to come to an experiential agency
instead of a traditional agency to market that,” Jay says.
“But we went through the process and tried to understand
the mindset of a Vegas traveler.”
In researching the typical routine of a Vegas traveler,
the team at All Terrain wanted to find the “white space” in
which travelers were otherwise unoccupied, or represented
a captive audience. One leg of the trip satisfied both criteria
— the plane ride.
“We came up with the idea of reaching consumers in
flight,” Eck-Thompson says. “We began approaching airlines with a strategy in which flight attendants ask passengers if they want a gift from the Cosmopolitan of Las Vegas,
without passengers having to give over any information to
receive the gift — truly no strings.”
The gift package contained small items including Cosmopolitan-branded playing cards featuring Cosmopolitan
factoids, dinner coupons, spa offers and casino credits. The
gift packages are now offered on all inbound Las Vegas
flights from United Airlines hubs.
“It’s something that adds value for the traveler and
connects them with the brand before they’re even on the
ground in Las Vegas,” Eck-Thompson says.
The Cosmopolitan of Las Vegas saw a dramatic increase
in the number of visitors and enrollment in its loyalty
program, directly linked to the cards consumers presented
when they redeemed the offers. The program is also the
highest performing out-of-home advertising campaign the
hotel has done to date.
A BANKING PARTNER
Jay and Eck-Thompson started All Terrain with a wideranging vision but little in the way of resources. The firm
has grown consistently over the past 17 years, which means
it needed to have strong financial partners to align with the
vision and goals of the organization.
That’s why Jay and Eck-Thompson have partnered
with FirstMerit Bank. Unlike a manufacturing business, All
8 • MeritMatters®
Terrain doesn’t have a lot of the more traditional, physical
assets or inventory that a financial institution might require
to make a lending decision. Their assets mainly are the creative and intellectual qualities they apply to create marketing solutions for their clients. That type of output calls for a
unique understanding by the bank of All Terrain’s product.
Partnering with All Terrain takes a willingness to develop a
deep understanding of the business, and that’s exactly what
FirstMerit did.
“They’ve taken the time and made the effort to truly
understand our business,” Jay says. “Every business has its
own nuances, and you can’t understand a business just by
looking at the balance sheet.”
“They had meetings with us, they came on site and
learned about what we do,” Eck-Thompson says. “They
understand the importance of building a good relationship,
and our experience is that not all banks are going to invest
in their clients in that way.”
All Terrain utilizes a number of services from FirstMerit,
but the biggest benefit the bank provides is the financial
flexibility to react quickly, no matter when clients pay their
invoices.
“Our growth (now over 40 full-time employees along
with thousands of brand ambassadors nationwide) was
heavily fueled by a couple of clients that allowed us to scale
and expand quickly,” Eck-Thompson says. “But the trouble
is, those larger clients can negotiate pay structures on their
terms. It just comes with the territory — you want their
business, you accept their terms.
“That can be difficult for a smaller agency, because
you’re doing work up front and sometimes you won’t get
paid until months later. That’s where the revolving line of
credit we got from FirstMerit has been so critical. It allows
us to have cash on hand when we need it. That’s a huge
example of how they worked to understand our situation
and help us keep growing.” u
For more information, visit www.allterrain.net.
>>>
BRIEFS
CHICAGO EVENTS, HIGHLIGHTS
AND ATTRACTIONS
KITE FESTIVAL
Aug. 8-9 / 10 a.m. to 3 p.m.
Free
Chicago Botanic Garden,
1000 Lake Cook Road Glencoe
www.chicagobotanic.org/
calendar/event/kite_festival
(847) 835-5440
Enjoy soaring stunt-kite
performances set to music by
members of the Chicago Fire Kite
Team and members of the Kite
Society of Wisconsin & Illinois.
These high-flying professionals
demonstrate awesome feats of
beauty and great skill.
TASTE OF POLONIA
Sept. 4-7 / 5 p.m. to 10:30 p.m. Friday, noon to 10:30 p.m.
Saturday and Sunday, noon to 10 p.m. Monday
$7, kids 12 and younger free
Copernicus Center / 5216 W. Lawrence Ave., Chicago
(773) 777-8898
http://topchicago.org
Polish food, all-day music on four stages and family fun reign
at this Labor Day weekend event that includes an arcade, kids’
stage, vendors and Polish beer.
SAM ADAMS LAKEVIEW TACO FEST
Sept. 19-20 / noon to 10 p.m.
Southport between Addison and Roscoe, Chicago
www.chicagoevents.com/event.cfm?eid=291
The glorious taco gets the spotlight it has long deserved
when the tortilla-wrapped favorite is celebrated at this food
and music festival.
CHICAGO TURKISH FESTIVAL
Sept. 2-5 / 10 a.m. to 6 p.m.
Free
Daley Plaza, 50 W. Washington St., between Clark and State
streets
www.chicagoturkishfestival.org
This festival features folk dances and music, whirling dervishes,
a traditional fashion show, arts and handicrafts, Turkish cuisine,
kids’ activities and more. Stage performances noon to 2:30 p.m.
MeritMatters® • 9
ASK THE EXPERT >>>
IN THE CARDS
D ALE R. FI T Z
Vice President,
Bankcard Product
Manager
T IM ROM I CK
Vice President,
Merchant Bankcard Risk
Operations Manager
A
round the globe, the credit card industry has been
working to find ways to reduce fraud through technology improvements and new industry rules that
may encourage faster adoption of the new technology.
The technology switch is toward the adoption of Europay, MasterCard and Visa (EMV) cards — cards with an
embedded chip on the back that replaces the magnetic strip.
“While it’s easy to copy information from a magnetic strip
card and rewrite it to another card, the same is not true for
chip cards,” says Dale Fitz, vice president, bankcard product
manager. “Chip cards are encrypted and can’t be copied.”
EMV cards are already widely used in Europe, Asia and
other parts of the world. But while the rest of the world
has made the shift, the U.S. has lagged behind, with only
about 20 million chip cards in use out of about 400 million
accounts. Now, as a result of several recent data breaches at
major retailers, the U.S. is making the switch in an attempt
to reduce fraud. “We are the last major country in the world
that is not EMV ready,” Fitz says.
The majority of U.S. credit card issuers still issue cards
with magnetic strips, and most merchants still accept them.
But starting in October 2015, issuers and merchants that
continue to do so assume liability for counterfeit transactions with the payment network’s liability shift, says Fitz.
Issuers and merchants aren’t required to make the
switch, but if they don’t, they will be liable for fraudulent
charges. If an issuer has issued chip cards and a merchant
doesn’t have chip card readers, the merchant is responsible
for any fraudulent charges. Alternatively, if a merchant has
a chip reader and the issuer hasn’t issued chip cards, the
issuer is responsible for any fraud.
10 • MeritMatters®
“Whoever has the highest level of security wins the
dispute,” Fitz says.
In both situations, either the merchant or the issuer, not
the user, is responsible for fraudulent use.
With chip cards, consumers insert the card into a reader,
where it stays until the transaction is completed, and enter
a PIN number to confirm their identity, says Susie Brindza,
senior vice president and director of the Merchant Bankcard
Division at FirstMerit Bank.
“The chip performs a risk assessment, the terminal does an
assessment and the issuer has an encryption cryptogram that
validates the card,” she says. “Chip cards add two new authentication elements, carrying their own verification code and also
generating a dynamic cryptogram, a digital signature so the
issuer can make sure the card and the transaction are valid.”
And if fraud is detected, the terminal can lock down
the card.
While the system offers a much greater degree of
security for card-present transactions, the change will be
expensive for both the issuer and the merchant.
“The issuer’s costs more than double, because not only
do they have to buy the plastic, they also have to buy the
chip that is embedded in the plastic,” says Fitz.
Merchants need to consider purchasing EMV-capable
terminals and software that can accept the change to a
smart-card format in order to protect themselves in the new
card-present environment.
In every country that has converted to chip cards,
card-present fraud has been reduced 80 to 85 percent, says
Tim Romick, vice president, merchant bankcard risk operations manager at FirstMerit. But the use of chip cards won’t
eliminate fraud.
“Fraud will go into the card-not-present space,” says
Romick. “Fraud will be rerouted to mail order, phone and
ecommerce, and we’re going to see an exponential increase
in that space. It is incumbent on merchants who accept
transactions to understand the risks in those other channels
and take steps to protect themselves.” u
Contact Susie Brindza at (330) 849-8965 or
[email protected], Dale Fitz at (330) 996-6439 or
[email protected] or Tim Romick at (330) 849-8910 or
[email protected].
PHOTOS BY JESSE KRAMER
Understanding the new EMV (chip-enabled)
credit card rules
>>>
ASK THE EXPERT
PLAYING IT SAFE
How to mitigate the risk of a cyberattack at your business
SCOT
PFLUG
Chief Information
Security Officer
PHOTO BY JESSE KRAMER
N
o matter the size of your company, it is vulnerable
to cyberattacks, says Scot Pflug, chief information
security officer at FirstMerit Bank.
“Mid-sized and smaller companies are generally easier
to infiltrate because they typically don’t have sophisticated
prevention and detection capabilities, but that doesn’t mean
that larger corporations aren’t at risk, too,” says Pflug.
Cybersecurity is not just an IT issue; it is an enterprise
risk everyone must understand.
“This is a business risk like credit, liquidity and operational risk, and it takes a full understanding of the potential
impact of the risk to get the right level of attention to fund
and identify mitigating activities to combat it,” says Pflug.
The most effective way to mitigate risk is education.
“Most attacks are attempted through social engineering
and phishing to trick unsuspecting users into providing information, data or passwords to hackers by clicking on a link
that grants access,” says Pflug.
Here are steps to mitigate the risk of a cyberattack at your
business.
• Educate employees about unexpected email
or telephone requests. For example, an employee
receives an invoice via email. She doesn’t remember
ordering anything but clicks on a link or opens the
attachment because she wants to be helpful. “She has
just inadvertently let the bad guys in,” says Pflug.
• Install virus and malware protection, and keep it
current. Too many companies install it and forget about
it, but it’s critical to stay current on virus and malware
protection updates, and operating system security patches.
Older versions of software are particularly vulnerable
because vendors are no longer releasing new patches.
• Limit administrative rights. Businesses commonly grant these privileges to employees, but that’s a
mistake. “Not allowing users to log in with administrative privileges reduces the capability for malware to be
installed,” says Pflug.
• Use a dedicated machine for Internet banking
activities. If you receive email or perform other browserbased activity and have clicked on a malicious link or
attachment and then go to a banking site, a lurking hacker
can steal your user name and password or take over the
session with the financial institution. A dedicated machine
reduces the likelihood of this type of an attack.
• Create a phishing campaign. A vendor can create a
fictitious phishing email and then monitor clicks. Employees who click on it are notified the activity is indicative of
a phishing attack, and had this been real, a hacker would
now have access to data. The user is then instructed to
take a short online training course. Repeated tests should
result in declining click-through rates.
• Restrict the flow of outbound information from
the network. If an attacker gets into the environment
but doesn’t have an easy way to steal valuable information,
it reduces the hacker’s effectiveness and adds to the methods in which detection of activity is possible.
In addition, FirstMerit offers IBM’s Trusteer, allowing customers to connect to its online banking with monitoring that
alerts the user to password stealing, malware, session hijacking
and other malicious activity. The service is free to FirstMerit
e-Connect® customers and is available by clicking through the
pop-up on our website or downloading from IBM directly at
https://www.trusteer.com/support/rapport-installation-links.
“Security is never perfect; that’s impossible,” says Pflug.
“The goal is to minimize risk and mitigate the impact by
being secure and vigilant and having the right resiliency.” u
Have questions on this topic? Call (888) 554-4362.
MeritMatters® • 11
PERSONAL FINANCE
>>>
A NEW WAY TO BANK
Benefits of an expanded FirstMerit PrivateBank relationship
uccessful relationships require a financial partner that offers
flexibility — specifically,
the ability to adapt to
your changing needs
and provide customized solutions to assist
you in achieving your
goals. Working with our
FirstMerit PrivateBank
Advisors, you can select
the perfect suite of
products to address your
situation, whether you
Lorrie Shaffer,
have simple day-toSenior Vice
day banking needs or
President, National
require a more complex
Private Banking
financial solution.
Practice Lead
We spoke with
Lorrie Shaffer, senior
vice president, national
private banking practice
lead, to understand the
benefits of developing a
private banking relationship, as well as some recent changes
to the FirstMerit PrivateBank product suite.
What are the benefits that come with an expanded
FirstMerit PrivateBank relationship?
One of the key benefits of a relationship with the FirstMerit
PrivateBank is the relationship with our advisors. We get
to know you, including your short-term banking needs and
long-term financial plans. With that knowledge, we help you
select the right products to address your individual needs
without overcomplicating the relationship. Depending on
the product selections, there may also be tangible benefits,
like higher interest rates for select checking and savings accounts, and relationship-based credit pricing on select credit
products. Many clients have taken advantage of our flexible
construction and mortgage products to secure their dream
home, quite often with lower down payments than they
anticipated.
Whether it’s banking, trust and estate planning, investment management or loans, each client advisor and private
banker has immediate access to a team that can cover all
financial areas of your life. Our goal is to make life simpler,
more convenient and less stressful for our clients by providing them with personalized service and expert advice gained
from years of experience working with clients that have
similar financial situations and needs.
12 • MeritMatters®
What products have changed and what are the
new benefits?
We have enhanced our Consolidated Financial Management Account (CFMA) the exclusive FirstMerit PrivateBank checking account, which offers a sweep option and
consolidated statement — all with no minimum balance
requirement. Your FDIC-insured CFMA checking is an
interest-bearing account with the flexibility to sweep idle
account balances (taxable and nontaxable) into your choice
of noninsured investment options. CFMA account holders
also receive one consolidated statement, allowing them to
see their total FirstMerit account relationships at a glance
instead of on multiple statements. Additionally, this account
has no minimum balance requirement, making it ideal for
clients who choose not to keep a large balance in their dayto-day checking account. Along with the CFMA, FirstMerit
offers the Premier Savings account, which allows FirstMerit
PrivateBank clients to take advantage of the best rates,
earning a higher interest rate on all balances.
Our new offerings provide increased flexibility. With the
FirstMerit PrivateBank credit card, our clients have the ability to make purchases worldwide and have one of the lowest
interest rates available. In addition, clients earn reward
points on all qualifying purchases and are able to redeem
points for travel, merchandise, tickets and much more. The
new Signature Line of Credit also offers flexibility when clients need access to funding for special projects or purchases.
Finally, FirstMerit PrivateBank lending solutions are
tailored to fit each individual’s needs. With a wide array of
lending options available, we can create customized lending
solutions, including secured and unsecured lines of credit.
Our goal is to fully understand the big picture for our clients
because, oftentimes, the right solution is a combination of
products, and by knowing our clients, we are able to provide
options better suited to their needs.
How can clients take advantage of these
enhancements?
If you are a Commercial Client, please contact your banker
and ask for an introduction to a FirstMerit PrivateBank
Client Advisor. Private banking is a journey with our client,
not just a moment in time. A private banker should be your
go-to person, the first call you make when you need banking
advice, guidance and solutions. u
Reach Lorrie Shaffer at (330) 849-8754 or
[email protected].
Banking and deposit products are offered by FirstMerit Bank,
N.A. Member FDIC and Equal Housing Lender. Lending products are subject
to credit approval.
PHOTO BY JESSE KRAMER
S
>>>
ASK THE EXPERT
MONEY MOVEMENT
FirstMerit online services offer businesses financial convenience and control
JULIE
TUT K O V I C S
Executive Vice
President and Chief
Marketing Officer
TOP LEFT PHOTO BY JESSE KRAMER
K
eeping track of financials is a key function for
successful businesses. With a variety of important
banking functions available online and via mobile
devices, banking availability has expanded outside the
walls of a building and beyond traditional business hours
for consumers and business owners alike. “Transactions
such as check deposits, paying bills and transferring money
between financial institutions can now be done on the
go — saving both time and money,” says Julie Tutkovics,
executive vice president and chief marketing officer at
FirstMerit Bank.
“A wave of technology has enabled individuals and businesses to have their financial information at the tips of their
fingers, and with online and mobile banking, they can have
complete control over their finances. It also allows them to
optimize their relationships with banks to make sure they
understand their full financial picture.”
The below services help businesses operate seamlessly,
providing business owners with convenience and control.
• Online bill pay allows you to pay an unlimited number
of bills online, saving you the time and expense of writing checks, paying for stamps and making trips to the
post office. With online bill pay, you can view and pay
bills from any Internet connection, schedule monthly
payments and stay in control of your finances with
account alerts.
• Mobile deposit allows you to deposit checks from your
smartphone rather than making a trip to a branch or
ATM. You can also access account balances and transaction history and pay bills from the palm of your hand.
• Transfer funds between your business and personal
checking, savings and money market funds using
business online banking.
“FirstMerit is adding functionality to both online banking
and mobile banking to deploy services throughout multiple
channels to create additional accessibility and efficiency for
our business customers,” says Tutkovics. “The goal is to create
convenient and seamless access to meet the business owner’s
financial needs.”
In addition to doing their banking online, businesses can
also easily move money both among their FirstMerit Bank
accounts and between FirstMerit accounts and those at other
financial institutions through the bank’s external transfer
service. Once you establish a link with an external account,
you can transfer money either on a one-time basis or set up recurring transfers. For example, if a small business has multiple
banking relationships, it can link all of those accounts using
FirstMerit as a hub and seamlessly manage cash flow to pay
bills, move a large deposit or transfer money to savings.
“This is a secure environment and the wave of the future
for businesses to do the vast majority of their banking online
or via a smartphone,” Tutkovics says. “It makes routine transactions more convenient and less time consuming.” u
Contact Julie Tutkovics at (330) 384-7009 or
[email protected].
MeritMatters® • 13
caption here
14 • MeritMatters®
MORE
than a
HEALTH CLUB
EAST BANK CLUB GROWS BY
ADAPTING TO MEMBERS’ NEEDS
IN BIG WAYS
BY BROOKE N. BATES
PHOTOS BY SARA STATHAS
W
hen Daniel Levin submitted his first plans for what would
become East Bank Club, lenders scoffed. In 1976, his real
estate development firm, The Habitat Company, acquired
control of three acres of former railroad land along the
Chicago River. He planned to put apartment buildings at the north and
south ends of the property, connected by a health club in the middle.
At that time, the land was not in a safe area of Chicago. Empty lots
and abandoned industrial buildings invited vagrancy and crime, giving the
neighborhood a bad reputation. No financial institution thought it would
work for a residential development, so the planned development program
could not proceed.
Refusing to give up, Levin adjusted his plan, dropping the residential
buildings to build a much bigger health and social club that would redefine
fitness facilities and transform the surrounding neighborhood.
MeritMatters® • 15
“WE DON’T SAY, ‘IF IT’S
NOT BROKEN, DON’T
FIX IT.’ THE ATTITUDE
WE HAVE IS, ‘DON’T
WAIT FOR IT TO BREAK.
KEEP MAKING IT
BETTER.’”
– DANIEL LEVIN, CEO,
EAST BANK CLUB
“There was a need for a club that would
be much bigger than anything that existed,”
Levin says. “I felt the need because in
Habitat’s apartments, we had swimming
pools, a few bikes and very little other fitness
equipment. It was anonymous in the sense
that people came down, swam or biked, and
went back to their apartments. There wasn’t
a social aspect because there weren’t enough
people to create a community. So we
decided to make our health club so big that
it would attract the critical mass necessary
to create a social environment.”
Levin built a big vision for East Bank
Club as the city’s premier facility for fitness,
wellness, socializing and dining. But with his
big vision came big financing hurdles.
“It was very difficult to get financing;
the club didn’t fit in any category because it
wasn’t an office building, it wasn’t an apartment building, it wasn’t a factory, it wasn’t
a retail center,” Levin says. “It was a health
club, and the potential of financing health
clubs was difficult, and certainly for one the
scale of the proposed East Bank Club.”
Finally, Levin secured financing and East
Bank Club opened in December 1980. As
soon as construction started, he was already
making enhancements to meet the needs
demonstrated by interested members.
“In the course of building the club, we
16 • MeritMatters®
made changes because we realized that we
needed to make changes in our plans for
various uses and the facilities desired. Since
the club opened, we have made many more
changes and will continue to make changes
to accommodate the new preferences of
members. The club just keeps evolving.”
By investing in constant improvements
through state-of-the-art equipment, superior
member service and ever-increasing amenities, East Bank Club strives to deliver a
first-class experience that sets a standard of
excellence.
“One of our slogans is that nothing has
to be broken in order to make it better,”
Levin says. “We don’t say, ‘If it’s not broken,
don’t fix it.’ The attitude we have is, ‘Don’t
wait for it to break. Keep making it better.’”
ADDING WHAT
MEMBERS WANT
East Bank Club opened with 10 tennis
courts, quarter-mile indoor and outdoor
tracks, two swimming pools and small
facilities for weights, racquetball, squash,
food and drinks. Today, the 450,000-squarefoot facility looks much different, as does the
surrounding neighborhood.
Chicago wind and weather limited the
popularity of track and tennis courts on the
deck. And members requested more space to
sunbathe. The club decided to eliminate the
tennis courts and track on the deck, making
room for a much larger open deck and an
outdoor grill and other additional amenities. The club also later added a second
and much larger outdoor pool, creating a
rooftop resort where members can enjoy the
60,000-square-foot sundeck from more than
500 lounge chairs. Today, East Bank Club
still has seven indoor tennis courts, three
racquetball courts and one squash court.
“Some of our decision-making process is
based on what’s happening in the industry,
and even more is what we learn from our
members,” says Levin, who uses a third-party service to poll members biennially for
feedback. “We saw things happening at other clubs, but the members made it clear to
us that, for example, they wanted a sundeck
that could serve their needs in the summertime. They wanted larger pools because the
small pools were not adequate for serious
swimmers.”
Another example is East Bank Club’s
growing cardiovascular room. The club
opened with just a few bikes and rowing
machines, and no treadmills, which were
only found in doctors’ offices for stress tests.
And there was only a very small 800-squarefoot weight room. In the last 20 years, Levin
says, the market for exercise equipment
has exploded, and with it, the demand for
variety has increased, enough to now fill
a 25,000-square-foot cardio space and a
7,000-square-foot weight room.
The club also boasts a 7,200-squarefoot performance center for functional and
high-intensity training, a 60-bike indoor
cycling studio, two regulation-sized basketball courts, volleyball and soccer, a 90-foot
long indoor driving range with a simulator,
Pilates and yoga studios.
But East Bank Club’s services aren’t restricted to fitness. The club keeps expanding
amenities, making the facility more of a
full-service destination than just a gym.
“We wanted to serve our members
in a variety of ways so they would more
likely spend hours at a time here with their
friends,” Levin says. “Different members
have different needs, and the more we can
do to accommodate more needs, the members — and the club — are better off.”
The food options have expanded indoors
and out, as the casual dining grill quadrupled in size. The club also added a gourmet
deli, a juice bar and a fine dining restaurant called Maxwell’s at the Club. Other
convenience services include dry cleaning,
car wash and detailing, a full-service salon
and spa for men and women, a daycare and
a business center.
“We happen to have a facility that’s big
enough that we were able to take tennis
courts away and put other things in,”
Levin says. “We happen to have quite a big
building with over 450,000 square feet of
space, and we can keep doing a lot with it
to accommodate new services and exercise
facilities. We want to be the best experience
people can have in a health club.”
Dale McCarrell, CFO
and Daniel Levin, CEO
East Bank Club
GROWING WITH THE CITY
Constantly adapting to members’ needs
drives steady growth. According to gross
revenue, it consistently makes the industry’s
Top 100 List as the highest-ranking single
club facility. With nearly 700 employees —
and more during the summer — East Bank
Club serves more than 11,000 members,
MeritMatters® • 17
who have included the likes of Oprah
Winfrey, Billie Jean King and then-professor
Barack Obama.
With annual revenue of $58 million,
the club spends about $2 million on capital
improvements each year as part of its
budgeting process.
“Even today, with the industry being
substantial, it’s still not easy to get long-term
financing for a health club,” Levin says.
“Chains with hundreds of clubs can get
financing because of the large number of
clubs they have in different locations. But
it’s unusual to be able to attract a financing
source when it’s only one club, because it’s
vulnerable to whatever happens in this area.”
Fortunately, as East Bank Club has
grown, the surrounding River North
neighborhood has transformed — perhaps
revitalized, in part, by Levin’s developments.
As the city naturally expanded beyond
the central downtown business district, it
brought more residents and workers toward
the club. Levin says the revitalization likely
started less than a mile away from the club
at Presidential Towers, a four-building
apartment complex he developed through
The Habitat Company.
“People say that Presidential Towers
changed the whole West Loop,” Levin says.
“I think it was going to happen anyway, but
Presidential Towers was an important factor
in motivating a lot of changes. Now there
are office buildings and apartment buildings, buildings have been rehabbed, and the
whole neighborhood has changed. We’ve
benefited from the growth of downtown
Chicago and all the new buildings.”
In that way, Chicago’s growth has
fueled the growth of East Bank Club
by supplying people who can afford
membership at the club.
“We could not build East Bank Club
in the suburbs. The market just wouldn’t
support it,” Levin says. “Because of our size
and the size of our membership, we are able
to do all kinds of things that other clubs
simply can’t afford to do. We are very lucky
to have our location in downtown Chicago.”
East Bank Club now relies on FirstMerit
Bank as a lending partner to ensure that
18 • MeritMatters®
“DIFFERENT MEMBERS
HAVE DIFFERENT
NEEDS, AND THE
MORE WE CAN DO TO
ACCOMMODATE MORE
NEEDS, THE MEMBERS
— AND THE CLUB —
ARE BETTER OFF.”
– DANIEL LEVIN, CEO,
EAST BANK CLUB
it can afford to continue making improvements for members.
“They offered us a more attractive package than the other banks did, with a longer
maturity period and enough money to do all
the capital work we wanted to do and still
have a handsome amount to distribute to
investors,” Levin says. “We were delighted
to work with FirstMerit to customize the
loan so it worked for them and it worked for
us. Our investors were happy, and we were
able to spend millions of dollars to continue
to upgrade the club.”
MAINTAINING SERVICE
THROUGH GROWTH
As the city has grown and shifted, so have
East Bank Club’s membership demographics. In 1994, only 18 percent of members
were 55 or older. Now, with people living
longer and staying active, that age group is
40 percent of total memberships.
Meanwhile, Chicago’s downtown
business and residential growth has brought
more families toward East Bank Club’s location. More than 1,200 children under age 5
are members with their families.
“It’s always a challenge dealing with the
guidelines we need to control activity in the
club,” Levin says. “We have to accommodate the parents and the children, and find a
way to harmonize servicing the families with
children and the adults without children.”
Part of that is scheduling services, classes
and programs appropriately to serve both
adults and children.
Providing the right programming is only
one element in creating a great experience.
“It’s also very important how our employees treat the members,” Levin says. “When
they come here, they want to be treated with
respect, appreciation and friendliness. From
East Bank Club, they expect the same level of
service as a five-star hotel, so it’s terribly important to train, and retrain our employees.”
As such, East Bank Club regularly invests
in employee training. Years ago, the club
created a series of service training videos
for staff, and those will be updated this year.
The videos were modeled after programs
from Disney and Four Seasons but customized to capture the club’s character and
service standards.
Besides training, the club’s leadership
creates a culture that encourages employee
development by bringing in motivational
speakers and honoring employees of the
month and year.
“The culture of the club comes from
our employees and how they treat the
members,” Levin says. “If our members
don’t have a positive experience, they won’t
stay, and they won’t recommend it to their
friends.”
Word-of-mouth referrals serve as the
main source of new members at East Bank
Club, which has a retention rate of more
than 80 percent. As a result, the club spends
less than 1 percent of its budget on advertising, focusing instead on improvements for
existing members.
“We’re dedicated to doing the best
job possible to serve members, while still
honoring our investors with returns on
their investment,” Levin says. “It’s always
a balance, but frankly, we believe that by
making service to our members the primary
obligation, that translates into better results
for our investors.” u
How to reach: East Bank Club,
www.eastbankclub.com or (312) 527-5800
EAST BANK CLUB
BY THE NUMBERS:
• 60 trainers, with certifications
and degrees related to fitness
• 450,000-square-foot facility,
which includes:
• 90 certified class instructors
–
60,000-square-foot sundeck
with 500 lounge chairs
• 162 employees work in food and
beverage, which accounts for
$10 million in revenue
• 17,000 towels washed in-house
per day
• 268 employees have worked at
the club for 10 years
• 94 employees have worked at
the club for 20 years
• 10-pound turkey given to each
employee every Thanksgiving
• 124 seats in Maxwell’s at the
Club restaurant
• $500 initiation fee and monthly
membership dues of $185
• 190+ classes offered each week
• 95 degrees – average
temperature of hot yoga class,
controlled by new state-of-theart HVAC system
–
4 swimming pools
–
25,000-square-foot
cardio room
–
7,200-square-foot performance center
–
Weight room
–
60-bike cycling studio
–
2 regulation-sized basketball
courts
–
7 indoor tennis courts,
3 racquetball, 1 squash
–
90-foot indoor driving range
–
Women’s spa
–
Salon
–
Car wash
–
Dry cleaners
MeritMatters® • 19
INVESTMENTS >>>
MILLENNIALS:
Smartphones, skinny jeans, and a $30 trillion inheritance
“COMPANIES HOPING TO OBTAIN
THIS GENERATION’S LOYALTY IN
BOTH THE MARKETPLACE AND
WORKPLACE MUST DEMONSTRATE
SUPPORT FOR CAUSES IN WHICH
MILLENNIALS BELIEVE.”
– DAN CRAWFORD, CHIEF INVESTMENT OFFICER
FIRSTMERIT PRIVATEBANK
Millennials are continuously in the news on many
different topics. But who are they?
Millennials, the cohort of Americans born between 1980
and 2000 (roughly speaking), are the largest generation in
the U.S., representing one-third of the total U.S. population in 2013.1 Millennials’ formative years were shaped by
9/11, the decade-long War on Terror, the Great Recession
and all things Internet.
Most came of age during a very difficult time, as the
oldest were in their mid-20s when the Great Recession
began. As unemployment surged, many struggled to
find decent work, while the younger ones were deciding
whether and where to attend college. Today, although the
economy is well into its tepid recovery, the Great Recession
continues to affect the lives and behavior of Millennials
and will do so for many years to come.
While still in the early phases of their careers,
Millennials have the following distinctions:
• Greatest number of college and post-graduate degrees
• Oldest average age when first married (if at all) and first
child born
• Least likely to own a home
20 • MeritMatters®
Are Millennials financially savvy?
Contrary to popular belief, Millennials are the best savers
because they have witnessed firsthand not only the Great
Recession but also their own parents’ struggle to save for
retirement. They have seen the dotcom bubble burst, witnessed the failure of many large banks and watched housing values tumble. They have developed a more conservative investment profile than professionals might assume for
those so young. Despite the decades of savings in front of
PHOTO BY JESSE KRAMER
Dan Crawford,
Chief Investment Officer,
FirstMerit PrivateBank
What drives Millennial behavior as consumers
and employees?
Like Missouri, the Show-Me state, Millennials want to see
it before they believe it. Some companies advertise the
environmentally friendly nature of their products, and this
generation expects companies to deliver and practice what
they preach. Additionally, Millennials make it a point to
purchase from brands whose values are similar to their own.
Companies hoping to obtain this generation’s loyalty
in both the marketplace and workplace must demonstrate
support for causes in which Millennials believe. A recent
survey of more than 1,200 American adults found Millennials to be the generation most focused on corporate social
responsibility when making buying decisions.2
Millennials as employees have quite a few demands.
They desire their daily work to reflect their societal concerns. The vast majority of Millennials want their employer to contribute to and support the social or ethical causes
they feel are important, such as economic development,
poverty and hunger, and the environment.
>>>
them, they are not comfortable with financial risk.
For those Millennials who have started their careers,
we are starting to see an emerging generation of retirement super savers. Millennials have benefited from the
widespread adoption of 401(k) auto enrollment, automatic
contribution hikes and target date funds. Seventy-one percent of Millennials who are offered a 401(k) join their plan
and start saving for retirement at an unprecedented young
age, just 22. By contrast, the average Boomer began saving
at age 35, while Gen Xers got started at 27.3
Of course, most young adults have plenty of shorter-term financial worries. Twenty-seven percent say their
top priority is covering basic living expenses, and 27
percent say they want to pay off debt. Student loan debt
has had an immense impact on Millennials. The economy
has long relied on recent graduates to make major life
purchases such as cars and homes, but a growing number
of younger consumers have had to shift priorities in order
to keep current on their student loans.
Is it too early for businesses to market to Millennials?
No. This is the perfect time. Millennials have the greatest
overall lifetime consumption value of any generation today. They are the youngest consumers and therefore have
the longest future as consumers. There are massive market
opportunities as Millennials are entering the life phase in
which they’re selecting investment advisers, Realtors and
the like for the first time. Whoever gets them now wins —
and has the potential to win big.
While this generation may only currently control assets of
roughly $2 trillion, it’s estimated that they will have $7 trillion
by the end of the decade, only five short years away. To
further emphasize the point, Millennials stand to inherit $30
trillion from their Boomer parents over the next few decades
in North America alone.4 This is a historic opportunity for
many businesses and even some entire industries.
How can businesses turn Millennials into
customers?
Millennials have emerged into adulthood with low levels
of social trust. According to a recent study, just 19 percent
of Millennials say most people can be trusted, compared
with 31 percent of Gen Xers, 37 percent of Silents (born
between the mid-1920s and early 1940s), and 40 percent of Baby Boomers.5 The lack of trust is a significant
headwind businesses face when trying to attract and retain
Millennial customers.
One way to gain Millennials’ trust is by being more open
about the products, services and associated costs. They
1
INVESTMENTS
expect openness as they’re sharing so much of their lives online, and they expect companies to be equally forthcoming.
They require information to be readily available and online;
otherwise, they’re going to turn it off.
It sounds as though the Millennials are a
demographic force to be reckoned with.
Absolutely. The power of this generation was first felt at
the beginning of this century as Millennials focused their
attention on consumer brands and fashion, helping fuel
the explosive growth of companies such as Apple and
Abercrombie and Fitch. Millennials have now shifted their
attention to using government and corporations to create a
healthier and more equitable society.
This can be witnessed firsthand as consumer preferences are shifting from McDonald’s to Chipotle. Chipotle
developed a reputation for corporate responsibility by
making careful decisions about the ingredients on its menu
and how those ingredients would be sourced. Millennials
responded in kind by patronizing businesses like Chipotle
while avoiding the McDonald’s and Coca-Colas of the
world, which are perceived as less healthy.
Organizations that lose touch with the changes taking
place in society will be left out of the economic benefits
this generation has to share. Companies that dedicate their
future to making the world a better place will be rewarded
with the loyalty of Millennials as customers, workers and
investors for decades to come. u
This message does not constitute individual investment, legal, or tax advice.
All opinions are reflective of judgments made on the original date of publication and do not constitute a guarantee of present or future financial market
conditions.
Census Bureau, 2 Cone Communications Social Impact study, 3 TransAmerica Survey, 4 Federated report, 5 Pew Social Trends
MeritMatters® • 21
COMMUNITY >>>
A PLACE TO CALL HOME
How Housing Forward helps transition people from homelessness to stability
22 • MeritMatters®
beds in our shelter. About half of our agency’s $3.5 million budget is devoted to getting people housed.”
Housing one homeless person saves the community
at least $10,000 in associated costs, according to the U.S.
Interagency Council on Homelessness. By transitioning 153
people to service-supported housing last year, Housing
Forward saved taxpayers more than $1.5 million.
Chronically homeless individuals with medical or behavioral issues require more intense, long-term services,
and to meet these needs, Housing Forward partners with
community-based organizations to provide services such
as medical and behavioral health care.
Housing Forward maximizes its resources through
volunteers and community partners, including FirstMerit
Bank, which has provided grant funding and event sponsorship since 2006. FirstMerit Commercial Real Estate
Lending Manager Jon Gilfillan is serving his second term
on the Housing Forward Board of Directors and has
chaired the annual fundraising gala since 2011.
“Like most nonprofits, demand is always exceeding
supply,” Schueler says. “There’s always a need for more
housing and resources to address homelessness, so we
stretch a shoestring budget a really long way by building
partnerships. By bringing together the private sector
and the not-for-profit sector, we’re showing that we can
have an impact on the community to solve an issue like
homelessness.” u
How to reach: Housing Forward,
www.housingforward.org or (708) 338-1724
PHOTOS COURTESY OF HOUSING FORWARD
W
ith a mission to
“transition people
from housing
crisis to housing stability,”
the Chicago-area-based
nonprofit Housing Forward
provides a continuum of
services, ranging from emergency shelter to supportive
housing. The only social
services agency in western
Cook County offering a
comprehensive “housing + services” solution, the organization recently changed its name from West Suburban
PADS (Public Action to Deliver Shelter) to encompass this
broad reach.
“The PADS name no longer reflects the scope of services that we offer,” says Executive Director Lynda Schueler, who revealed the new name in April. “When people
hear PADS, they think of pads on a church basement floor.
We’re so much more than that.”
Housing Forward’s emergency shelter, which now uses
the PADS name, serves more than 500 people annually,
making it the agency’s most-used service. But it only
accounts for 10 percent of the operating budget.
Most people stay in the shelter less than a week. Those
who stay longer meet with case managers to formally
address their needs and plug into other services. Last year,
Housing Forward’s support center assisted more than 350
people by providing necessities such as shower and laundry
facilities and access to medical care, as well as life skills and
wellness classes. About 40 participated in Career Passport,
its five-week employment readiness program.
The ultimate goal of these services is stable housing,
which may take a few months, a few years or longer. The
organization provides immediate, short-term options
through rapid rehousing, 24-month transitional housing
and permanent supportive housing in units leased from
private landlords.
“We actually provide more nights of housing in a given
year than we provide nights of shelter,” Schueler says.
“We have many more units of housing than we do nightly
As your business expands,
so does your need for
proactive advice.
Comprehensive Services for
any size business from FirstMerit
Increased demand for eco-friendly solvents meant exponential growth for Lisa—
and a conversation with FirstMerit Bank. With their Treasury Management,
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the help of FirstMerit, Lisa’s business no longer qualifies as “small.”
TO L E A R N MOR E, C O N T A C T :
Pete Gillespie, President and CEO, FirstMerit Chicago Region,
at 312-429-3600 or [email protected].
Follow the latest market trends
@firstmerit_mkt
firstmerit.com
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