Commerce Bank Case Analysis

GROUP 7
Tarini DM15163
Mudita Bhandari DM15130
Vishvender Singh DM15167
Shubham Sanghal DM15155

Situational Analysis

The following differentiators provided a competitive advantage to Commerce Bank
Tangibles- Coffee and newspaper in waiting lobbies, helpline phones at ATMS, Standardized
ambience in the banks, Uniformity in terms of infrastructure, Lollipops and biscuits at drive thru
windows.
Reliability- Quick Updating of ATM transactions in online statements. A Check View feature on
Commerces website
Empathy Multiple roles played by one individual. For example the Branch manager advices
customers on loan applications and helps them manage deposits.
Assurance Commerce bank assured its customers by providing 24 7 customer service and also
opened the branches at busy location at midnight. Weekend banking facilities were provided to
allow customers to bank on Saturdays & Sundays.
Responsiveness - Commerce decided to use live agents over the phone instead of Voice
Response Unit (VRU) to talk to customers.
Commerce bank was ready to reduce the listening gap by rightly understanding the customers need and
competing on convenience, service and other such intangible service differentiators.
Another differentiator between the Commerce bank and its competitors was the Employee to Branch
Ratio.
As per Exhibit 1b and 3b we can interpret the following:-
The Employee to Branch ratio at Commerce Bank was approximately 28 employees per branch.
On the other hand the employee to branch ratio in the industry was 26 employees per branch.
This shows that Commerce bank clearly understood the customers as revenue generators and
not cost centers.
Customer Oriented services
Commerce Bank worked in a different manner when compared to the industry.
Its branches were closely located to the competitors.
The design of the branches was inviting, open windows and ample parking space.
First time customers were given a free gift for opening an account.
Loan applicants were encouraged to open deposit accounts first.

These factors enabled Commerce bank to grow in the industry without considering mergers and
acquisitions. Commerce bank also introduced the program known as Wow aimed at evaluating the
impact of the framework implemented for teaching folks service.
Problem
The current problem being faced by the bank is to whether continue with the retailtainment
concept or not. Jacovelli was not sure of the fact that whether the customers wanted
entertainment while they banked.
Commerce bank should also focus on its core products such as providing loans to the customers.
Currently Commerce bank has been limiting itself too much on the deposits when compared to
the industry standards.
It should focus more on the sustainability in the long run by considering the expenses involved
in standardizing all the branches.
The increment in the salaries and benefits provided to the employees exceeded the increase in
revenue in 2001. While a 36% increment was witnessed in case of the former, the latter
increased by 19%.

Solution
Commerce bank should continue with the retailtainment concept as banking is not all about
accepting deposits and providing loans but also providing an experience to the customer.
Commerce bank has been successful till now compared to its competitors because it has
managed to focus on the customer needs. 62 % of the customer wanted banks to provide
services and convenience. So commerce bank should continue with its services such as long
working hours, assistance in loan applications, friendly staff, and midnight banking hours in busy
locations.
Commerce bank should curtail on some of the entertainment aspects which do not add any
value to the customers in terms of banking experience. Instead they should allocate these
resources in the core banking area and should deploy the deposit money in providing loan to the
customers and increasing its customer base. Currently a lot of wastage of resources is being
done by Commerce bank in providing some unnecessary services to the customers.
Commerce bank aims at standardizing all its branches in terms of not only experience but also
the infrastructure. This seems less sustainable in the long run as it would add to the expenses of
the immensely. The Commerce bank should focus more on standardizing the experience. It
would add value without creating a cost burden on the bank.
Commerce bank should continue with its core competencies but in a manner which balances
efficiency along with meeting the customer expectations. The customers standing in a busy
queue would rather prefer a helping hand behind the counters rather than over dosage of
entertainment without any saving in time.