Commerce Bank Case
MFS Group 5
1) List the unique or differentiating aspects of Commerce Bank in each of the 4 sets of activities of
marketing:
a) Determining Customer Value – Market research on consumer preference and competitor research
for finding opportunities were conducted. It was shown that 62% of people choose banks with better
services, 34% of customers leave banks because of unsatisfactory service, 15% want extended
hours, and competitors ignore customer business.
b) Creating Customer Value – In a highly competitive industry like financial banking, Commerce Bank
used a unique strategy to assess its rivals. They referred to their locations as "stores," and tried to
give customers an experience that was distinct from that of the "bank next door." Phones were
installed in ATMs which could be used to reach the call centre in case of emergency. Bank’s website
was upgraded with check view feature.
c) Communicating Customer Value – The company launched a WOW programme in which it offered
incentives, prizes, and various compensation plans to its employees for performing successfully.
Employees made several efforts to raise the standard of service provided to clients as part of the
WOW initiative. Commerce bank effectively conveyed and promoted its business by running their
vans with the company's name, logo, and brand colour. The Red Friday events and Penny Arcade
campaign were very successful.
d) Delivering Customer Value – Commerce offered checking accounts which were free for the first
year, regardless of the balance. Customers were also given a free gift for opening the account.
Commerce bank gave lower returns on its deposits in exchange for giving better customer service
than its competitors.
2) How do Commerce Bank's income statement and balance sheet compare with that of the industry?
a) Balance Sheet - Deposit growth (1996-2000) in the case of Commerce bank increased by 30% while
industry increased by only 20%. Deposit growth in 2021 for Commerce bank grew by 40%
outgunning the industry which saw an increase of only 5%.
b) Online usage increased by 34% which was much higher than Wells Fargo.
c) Income Statement - Net income for Commerce bank increased by 200% during the period (19962001) whilst net income of the industry increased only by a meagre 20%.
3) In general, what is good quality service in retail banking? Explain.
a) Ease of access: Multiple channels for customers to access their accounts, make transactions etc.
should be provided (eg: mobile banking, internet banking, etc)
b) Responsiveness: Any queries raised by customers must be quickly responded to, whether over
customer care calls, in-person queries in a bank’s branch, etc.
c) Transparency: Accurate information regarding fees, charges, interests, etc. of the products and
services sold must be clearly communicated to the customers in order to mitigate consumer
complaints.
d) Security: Security of consumer data, transactions executed and safety of funds is of utmost
importance.
e) Personalisation: Retail banks must tailor the services and solutions in order to meet individual
customer requirements.