Commerce Bank Case Essay

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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
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One author in the New York Times is quoted as saying “The locations also feature colorful change-counting machines and upbeat employees, who every Friday are decked out in red, often to hilarious effect” ( . This contributed to the customers overall experience, and was used to great effect to bring traffic in the door.

The customer central model, was the springboard for what Commerce believed was the “value of the bank”, customer deposits (Frei, 2006, p.5.) Hill believed that by focusing on “non-rate” reason deposits, that he could build a deposit base. “Banks had given up on growing all together because theu thought you had to pay the highest deposit rate to get growth” (Frei, 2006, p.5.). Hills’s philosophy was just the opposite, the bank provided customers with an unforgettable experience in exchange for a deposit rate, half a point less than the competition. This lower rate enables Commerce to stay open later and have more additional benefits for its members. These benefits include no fee banking and even ATM fee refunds to high balance members.

To ensure this experience was the same for all the members of the bank, Commerce standardized it’s branches, down to the nuts and bolts, “We know every screw in the model“(Frei, 2006, p.7.), this Cunningham the chief marketing officer, felt would make life
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