Commerce Bank Case
Executive Summary
Commerce Bank has been a pioneer in the banking industry by returning 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.
An analysis was performed regarding whether their new concept of “retailtainment”, entertaining customers throughout the banking service process, would be beneficial or not. After thorough consideration, it was determined that “retailtainment” was not the best way to improve Commerce’s quality of service. Commerce should focus on their former centralized model and enhance it, rather than change it.
Background
Commerce Bank is a New Jersey-based bank founded in 1973 by fast food franchiser Vernon Hill. Hill took his experience as a fast food business owner and utilized it to operate Commerce Bank. Commerce had branches opening earlier than the competitors and staying open later, 7:30AM to 8:00PM during the week and modified hours on Saturday and Sunday (Frei, 2006). Drive-through windows at busier locations even stayed open until midnight to accommodate customers; however, all branches operated under the notion that they were to open ten minutes before and close ten minutes after the posted time (Frei, 2006).
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, and some years they even achieved growth rates in excess of 40% (Frei, 2006). This was not consistent with the market trend during this period, as other banks were selecting online banking, 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).
Currently, Commerce is feeling the pressure from other banks who want to use their business model to draw
Commerce Bank has been a pioneer in the banking industry by returning 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.
An analysis was performed regarding whether their new concept of “retailtainment”, entertaining customers throughout the banking service process, would be beneficial or not. After thorough consideration, it was determined that “retailtainment” was not the best way to improve Commerce’s quality of service. Commerce should focus on their former centralized model and enhance it, rather than change it.
Background
Commerce Bank is a New Jersey-based bank founded in 1973 by fast food franchiser Vernon Hill. Hill took his experience as a fast food business owner and utilized it to operate Commerce Bank. Commerce had branches opening earlier than the competitors and staying open later, 7:30AM to 8:00PM during the week and modified hours on Saturday and Sunday (Frei, 2006). Drive-through windows at busier locations even stayed open until midnight to accommodate customers; however, all branches operated under the notion that they were to open ten minutes before and close ten minutes after the posted time (Frei, 2006).
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, and some years they even achieved growth rates in excess of 40% (Frei, 2006). This was not consistent with the market trend during this period, as other banks were selecting online banking, 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).
Currently, Commerce is feeling the pressure from other banks who want to use their business model to draw
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