Commerce Bank

Analyze Commerce Bank’s service model prior to Retailtainment. How well does the company's operations design support its competitive position? Which decisions in particular do you find critical to the bank’s success? For example,

• What is Commerce bank's service excellence? How does it fund this excellence?
• How does its human resources strategy (e.g., recruiting, training) support its service excellence? How do these choice compare to those of Citibank and Bank of America?

Commerce bank was established, and attained unequivocal success, on the premise that customers could be attracted, and retained, by providing superior service. In all the strategic and operational decisions that Commerce Bank made, the comparison was with what a retailer would or would not do in order to delight its customers. This was a striking difference from how other banks operated and hence, proved to be a valuable differentiator for Commerce Bank. The bank continued to keep customers at the forefront of all its moves and believed that through retention, customers could serve as reliable revenue sources. Irrespective of the touchpoint, Commerce bank strived to provide the best user experience to its customers. As other banks lost their customers, Commerce bank gained and retained them successfully, thus surpassing industry averages in all metrics. Their success could be attributed to the following core decisions:

• The bank provided longer working hours, with the senior management advocating for the 10-minute rule
• Commerce Bank followed SMART principles and treated customers with outgoing and friendly service, including free gifts on opening of new accounts
• Customers were encouraged to visit branches and at times it was a part of the operations, e.g. for loans, customers needed to meet with branch managers as a part of the process
• Commerce Bank constructed all branches from scratch maintaining a similar look and feel. This promoted the feeling of consistency and dependency which added to the comfort level of the customer.
• The bank offered lower deposit rate but justified it by the higher amount of money they ploughed back into operations and better service.
• In spite of a move to electronic channels in the industry, Commerce bank did not penalize customers for not using electronic channels and kept encouraging the mix that worked best for customers.
• Heavy focus was maintained on training and retaining employees who identified with the bank’s culture. The employees were kept motivated with awards and rewards.

Commerce Bank’s service excellence was modeled and inspired by the retail industry. Enthusiastic customer service, free ATM transactions, walking customers under umbrellas in rain, Penny Arcades, etc. – each initiative was targeted at pushing the customer satisfaction level to another new level. The operations of the bank followed a self-sustaining cycle where lower deposit rates allowed them to spend more money on improving their services, and these improved services, and associated conveniences, attracted more customers to provide their deposits to the bank. Besides this mechanism, careful selection of branch locations, sound policies around loans, and the correct motivation to employees also strengthened their bottom line.