Essay on Commerce Bank Case

Words: 1586
Pages: 7

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
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This is unique from other banks who sometimes charges fees for customers if they visit the branches or talked to a real person. “Customers enrolled in Bank of America's e-banking account pay $8.95 a month for the privilege of accessing branches and talking to tellers when you need to make a transaction or deposit”(

Commerce bank was certainly the winner on the ground, but they felt threaten by some competitors who copied there models in the New York area, namely ING and Washington Mutual. In fear of losing it’s hold on the ground, Commerce implemented a decentralized program called “Retailtainment”. This program would allow branches to come up with their own ideas, even wacky ideas, to entertain members on Fridays. For starters this is a break from the model that has worked so far and that is standardization. Commerce had built the brand name using this philosophy, and moving away from this will hand the control over to the branch. With the bank industry ratings on the decline this strategy may back fire severely and hurt the brand down the road. “In October 2010, the number of Americans expressing a "great deal" or "quite a lot" of confidence in banks fell to an all-time low of 18% -- lower than its level at the height of the global financial collapse. Gallup analysts find this to be a continuation of a free fall that began in 2006”