Commerce Bank Case

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  • Topic: Bank, Cheque, Customer service
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  • Published : August 17, 2012
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Commerce Bank
Executive Summary

Commerce bank has been a pioneer in the banking industry by reverting to customer service. This has driven customers to the bank, but in order to stay ahead on the curve they want to move away from the model that has worked for them. They should focus on the current model and enhance it, rather than change it.


Commerce bank also known as Commerce Bancorp is a New Jersey based bank founded in 1973 by fast food restaurant franchiser Vernon Hill. Hill took his experience as a fast food business owner and used it to operate Commerce bank. “The world”, he reasoned, “did not need another ’me-too’ bank” (Frei, 2006, p.4.)

Hill created a retail franchise with branches openening earlier than the competitors and staying open later than the competitors, 7:30AM to 8:00PM during the week and modified hours on Saturday and even Sunday (Frei, 2006, p.4). Drive through windows at some busier locations even stayed open till midnight to accommodate customers, however all branches operated un the notian that they were to open 10 minutes before and close ten minutes after the posted time, calling it the “ten-minute rule” (Frei, 2006, p.4.).

Commerce used this model to get customers in the door and made their primary focus customer service. This focus allowed them to increase customer deposits, by an average of 30% per year from 1996 to 2001, some years they even achieved growth rates in excess of 40%. This was not consistent with the market trend during this period. Other banks where opting for internet banking, literally pushing customers out the door. Hill felt that this was a model for failure, because “You can’t name one retailer in this country that has pushed people where they don’t want to go and succeeded” (Frei, 2006, p.4.).

Currently Commerce is feeling the pressure from other banks, who wants to use their business model to draw new customers. Washington Mutual for instance launched “un-bank”, with roaming tellers, a children’s play area and no desk. ING a new entrant in the market opened a café style branch that served espresso to customers at seated tables (Frei, 2006, p.11). To combat this Commerce launched a new customer experience called “Retailtainment”. Retailtainment is the incorporation of entertainment into the various branches. Essentially each branch can come up with their own wacky ideas for entertaining customers every Friday (Frei, 2006, p.11). This was to ensure that Commerce, who offer lower rates, stay ahead of the competition.

Problem Statement

Commerce bank is losing track of what the sole purpose of banking is and what the customers really want in a banking experience.


“Many banks attribute their growth to their successful transformation to a sales culture” ( .Commerce has used old school banking to carve out a niche in the banking industry.

When you look at other banks, you’ll notice that they are moving towards internet banking, focusing less on the person to person interaction. This could have catastrophic implications, “I am referring to the turn-off of poorly trained, new employees. What's worse is seeing this person struggle and look in vain for help from someone else in the branch” ( Commerce on the other hand have embraced this by training employees in the art of customer service.

At the Commerce bank University, new employees undergo intense introduction to Commerce’s culture, and traditions. The class is actually called “Traditions”, were employees are taught to smile, shake hands and greet customer (Frei, 2006, p.9.). This training leads to good service, and this framework is called “WOW”. WOW is a program that was developed in 1994 to teach employees service. To drive this program even more, employees are awarded when they “WOW” customers, by getting little red C’s for every instance. These C’s...
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