COMPARISON

Commerce Philosophy:

Industry Trend :

Focus is consumer
business (Deposits)
Best value from both
(conventional &
electronic) channels
Interest income
revenue
Outgoing friendly
service

Cross-Selling products
Preference to
electronic channels
Non-interest income
revenue
Pushing customers out
of store(bank)

Product Category-DEPOSITS
Commerce Bank
Rates need not be the
highest in the industry (only
3% want this)
Longer operating hours allow
for more time for customer
service (62% want this)
Non-interest income revenue
(i.e. ATM charges) must be
used as competitive
advantage to grow and not
simply be an addition to the
bottom line of their profits.

Industry Trend

They are transactionoriented and low growth

Dozen or more types of
checking accounts
$5 monthly fee for
Internet Banking
facilities

Product Category-LOANS
Commerce Bank

Industry Trend

Assigned to customer
service branches that
received credit for
deposits
Loan-deposit ratio low
Credit quality
checks( ability to repay)
Loan officer is also
branch manager
(manages deposits as
well)

Loan delivery is
centralized leading to
customer and loan officer
disconnect
Loans are 90% of deposit
base (2001)
Lower credit quality
loans (i.e. sub-prime
mortgages) get approved
Loans not linked to
deposit

CONCLUSION

Implementation of SERVICE BUSINESS MODEL brought a big

success for commerce.

Commerce Bank grew to $1 billion in deposits by 2001.

While the net income for the industry stood at 20%,
Commerce doubled its net income in the period 1998 -2001.

 Retailtainment gave a set back to

customers, failed to improve overall
customer experience and increased
ACTUAL
number of complaints RESULTS
ORIGNAL PLAN
Improve the
service
experience for
customers
waiting in
branches

Number of
customer
complaints were
going up (focus
on
entertainment
rather than
service)

RECOMMENDATIONS
Discontinue retailtainment programme as it does
not fit with the commerces value.
Back to previous service business model, i.e.
focusing on superior customer experience delivery
rather than providing entertainment to customers
Focus should be given to the effort of improving
quality of service.
Improving brand positioning through consistent
service delivery
Maintaining and improving financial conditions
(deposits growth, net income)

Action plans
Create more effective and efficient
process- Provide several service
zones, i.e. basic service area, quick
service zone, and complaint zone
Launch service guarantee program
rather than continuing Retailtainment
program.
Front line employees are vital for
success.