How Commerce Bank lost its niche… and its heart

There’s a lot of talk in the world of coaching about “finding your niche.” A niche is what lets a coach, or any business, set itself apart from the pack. Find your niche, and do it better than anyone else, and you’ll have more business than you know what to do with.

In banking, there was one bank that created a niche truly unique from all its competitors. They created a model based on creating not just good customer service, but the best. They found out what the customers not only wanted, but dreamed of. The result was a bank open seven days a week that offered such amenities as free coin counting, free checking, and no surprise fees. Walking through the door, you’d be greeted personally, and often offered a free piece of candy. Blue “Commerce” pens were plentiful and soon gained wide circulation among the cognoscenti of the 9-5 set in Manhattan. When you opened an account, even for a nominal amount consisting of just the change you brought in for counting, you’d get a personal, handwritten card from the person who opened your account. With these sort of practices, for a number of years, Commerce Bank was a shining example of what happens when a commercial entity has a strong mission and purpose and combines it with leadership in the art of customer service.

Somewhere in the last year or so, this once-great bank lost its bearing. Without warning, the bank instituted draconian “monthly cycle fees” that rivaled that of their biggest and worst competitors for fee gouging. Closing an account became a process of trickery and deception that would not allow a customer to leave without incurring months of miscellaneous fees that were never on the statement. Stories of branches “losing paperwork” that would then cause even more fees became common knowledge. The same type of petty, nickel-and-dime thinking that plagues much of the banking and credit card industry replaced the powerful vision of customer care that made this bank one of the fastest growing in the country. Perhaps it is the concerns of a steep recession, but clearly, this bank has lots its mission and purpose.

My mother had a great expression for this. “You’re being penny-wise and pound foolish.” (The “pound” gives away the origins of this expression as an old British one.) It means you’re more focused on the small picture, not the larger one. It’s like hiring an accountant for $150 to examine your $75 cell phone bill.

Let’s look at this from a coaching perspective. If you were coaching the CEO of Commerce Bank, where would you start? My first questions might be, “Has the vision and mission of the bank changed in the past five years? Are the benefits attained from these fee strategies worth the cost to the bank in customer loyalty, goodwill, and future business?

I invite your coaching questions or provide your own approach.

April 4, 2008

13 Responses to “How Commerce Bank lost its niche… and its heart”

  1. Aaron Wakling Says:

    Good Blog. I will continue reading it in the future. Nice layout too.

    Aaron Wakling

  2. Success Coaching Says:

    Hi Andrew.
    Another ICA Alumni here!
    The qs I’d pose to the Bank CEO would be:

    Ricardo Semler wrote that “Success is not measured only in profits and growth”. What say you?

    And take it from there…

    mark mcclure

  3. Len Rapoport Says:

    Hi Andrew:

    I too had a very poor experience with Commerce Bank in Hazlet, NJ. I am president of International Press Association and have been a consultant and photojournalist for years.

    Not only did Commerce deactivate my checking account due to inactivity these past few months, but they also deactivated my ATM card. I found out they did this two days before leaving on a trip to Europe where I intended on using my ATM card to withdraw cash in each country visited.

    The only way I found out it was deactivated was by making a deposit to this account prior to my departure. I was informed by the teller that they do this as a security measure and the deposit I made would reactivate the account. She told me I would be OK in Europe but to call their office in a couple of hours to make sure the account was good.

    Not once did they tell me that the ATM card was canceled and needed to also be reactivated. Go to my blog and read the horrid story and how Commerce Bank handled my complaint on my return. They have no asked me to close my account because I am not happy with their resolution (which was an apology and nothing more) and because I have written about this incident on my blog.

    I will link to your blog, as it confirms my belief too that Commerce Bank has lost their mission and their heart. Feel free to link to my blog as well.

  4. Sarah Says:

    Well I work at Commerce Bank, so my response is going to be biased, but I completely disagree with this post. You have to understand that there is a merger going on between Commerce and TD Banknorth, so obviously some things are going to change – what do you expect? The fact that we are still able to keep our culture during the integration says a lot about what Commerce has built up.

    For every one customer complaint, you probably have at least 1000 praises. Commerce would ever deactivate a checking account if there was money in it. Maybe people should get their facts straight.

  5. Andrew Says:

    Sarah, you might be too close to the scene to even see the fire! You may not be aware of the daily, imperceptible changes that are transforming Commerce Bank.

    A big part of what creates a great customer experience is perspective and perception. When Commerce was “hungry,” an upstart offering (gasp!) excellent customer service and beyond-excellent hours, personally greeting customers, no fee banking, and of course the coin counting machines, the customer service was immediately that of being rolled back into a time when banks actually worked to get accounts of the small savers and investors. At some point in the past two years, something shifted. Perhaps it was this merger with TD Banknorth, which might have more of an “old school” banking model. If that’s the case, then this merger bodes ill for Commerce customers.

    These facts are straight and based on personal experience, both mine and Mr. Rapoport’s. We are both former customers who previously had nothing but high praise for Commerce, and have experienced personally its transformation into mediocrity.

    What do I expect? Bear in mind that when I found this bank in 2002, when I walked in I thought I died and went to bank heaven. I extolled its virtues to anyone who would listen, and every person who acted on my invitation thanked me and justified my enthusiasm. So I do take it a bit personally that I can no longer recommend Commerce for anything but cashing your pennies. I expect a niche business being true to its message and promises; I expect excellent communication; and I certainly expect not to be hit with usurious charges like the “monthly cycle charge” that were not part of the deal I signed up for in 2002. Think about it. A 15-dollar fee for going under $100 for even one day during a month: At minimum, that’s a 15% fee. If there’s $50 in the bank, it’s now a 30% fee. Does that sound like a fair banking practice to you? More to the point of my post, is that in the spirit of how Commerce marketed and continues to market itself?

    I can’t think of anyone I know who has been with Commerce before they changed their policies who is not greatly disappointed with them now.

    I recommend reading “From Good to Great” by Jim Collins for an excellent analysis of how companies have made that transition, as well as what takes down companies that go in the opposite direction.

    — Coach Andrew

  6. shana Says:

    Commerce bank has very poor practices. if you have one transaction that causes your account over drawn they go back two or three transactions and decide where the problem was and charge NFS’s but the big kicker is they hold and hold and hold pending items too long and cause you to overdraft. I put $65.00 in and it took 4 days for CASH! the Robotic response is Cash is available next day. sure its available if you want an overdraft fee! the sign on the wall is “all transactions will be available in 2 days” that means no matter what form is it (even cash) ha! I found a better account.

  7. terry Says:

    i also was thrilled with the commerce experience at first. at first. i ended up with them attempting to collect over $250. worth of bogus fees incurred because they neglected to do their job and fully inform me EVEN THOUGH I ASKED all necessary and pertinent questions. when informed of what i “owed” them, i responded with a pointed letter and promise of my lawyers information. i heard nothing in return, but a month later when i inquired into this account i was told it had been closed many months prior and there was no negative outstanding balance. commerce lured consumers in with the promise of a kinder bank, but sunk into the poor practices found in many large banks these days. i switched to sovereign. so far customer service is good and interest checking is free with direct deposit. the only other alternative might be under my mattress.

    to sarah i say: the merger has nothing to do with it. you are working for a large corporation who, like may others, is fee gouging and (for lack of a classier way to say it,) taking advantage of and screwing it’s customers. don’t take it personally. or if you do, maybe you should find another job where you can be proud of the company you work for.

  8. Phil Says:

    My Commerce (TD Americtrade) check card was stolen form me and more than $2600 were run up on it in less than 4 hours, at more than 10 different locations. Commerce is not reimbursing me because this is part of my “normal spending pattern”. They have pretty much told me they think I am trying to scam them.

    If TD Ameritrade isn’t going to protect its cardholders, as all banks do, their customers should simply carry all of their cash in their back pockets!!!!!


  9. Chris Says:

    Being a local supervisor for Commerce and TD Bank for over 7 years, I find some remarks on your blog that are completely incorrect. For starters, there are no such thing as “hidden fees”. We do not “hide” fees from statements. Fees, just like any other transaction, excluding holds, are posted the next business day on your statement and can be viewed when mailed, online, or whenever you come into any branch. Not to mention all of these services are for free.

    Furthermore, I would like to point out the fact that most people do not understand banking. If you deposit your check drawn from another bank into your TD account – of course it takes a business day to collect the funds and have them clear into your account – but this again depends on the check itself. A check is a check, is a check, is a check. It is not cash. This is why on the bottom of your receipt clearly states that all deposits may not clear the next business day. Not to mention that TD Bank is only closed 4 days in an entire year, so there aren’t any excuses for not being able to check up on your accounts and deposits.

    Learn about your accounts, fees, and transactions before pointing fingers. TD Bank has its shares of mistakes. I’ve seen them, I’ve made a few myself – for to err is human. But for every mistake I’ve seen on our end, I have seen another 10 mistakes wrongly accused by customers toward us. 90% of the mistakes I have seen is planning and organizing. Some customers do not keep registers for organizing there daily transactions (which we offer for free, again). Some customers do not plan ahead – save extra cash in your accounts so when bill time comes and you make that minute dash to the bank to collect your funds from a check, you have a backup plan.

    • mentorcoach Says:

      Chris — first of all, for all intents and purposes, Commerce Bank no longer exists. While TD has continued many of Commerce’s policies, there is no longer a Commerce Bank, making your points moot at best. But let’s deal with the fact of the egregious “cycle fee,” which can only be described as not being hidden if one is to be very generous in describing it as such. It took some doing for me to figure out what on earth Commerce was charging me for, and why. This is one onerous fee, tantamount to usury, and it caused me to close my account. Think about it — if your account goes under $100 for even one day out of the month, being charged a $15 fee means a minimum 15% fee relative to the balance. What if your balance for that month was only $5? That fee now becomes a 300% fee. Remember, I walked into that bank with the promise of free checking. You can defend the right of the bank to do this to your last breath and justify it with all the other things Commerce did (and TD still does) that is right, and it does not take away from the central argument of this post — that Commerce, once a bastion of the best of banking, a stand for value and customer service for the little guy, had moved away from that niche and has drifted toward the middling mediocrity of other banks — it truly lost its heart. This view is supported by other complaints of how the bank “used to be.” That being said, it’s perhaps unsurprising that there is no longer a Commerce Bank.

  10. Martin Says:

    Since we’re talking about the picture here, let’s do just that. This blog should not only be about Commerce Bank or TD Ameritrade. It should be about the banking practices of this great Nation. Yes the Banking Institutions make BILLIONS on fees alone. Their programs are designed to FEE to the max when at all possible. Their employees are trained not to return those fees as this is the mean for profit.
    When looking at the big picture and the Greed of said lending institutions and the rather large payoff to lobbyists and politicians, it can get rather sickening. Wall street controlling petroleum products and not demand should send up red flags to everyone. Morgan Stanley is one of the largest OIL companies around. Most of these banks had it handed to them and now they must make up that money. These bank have abused their power and have been allowed to gouge the American to the MAX without serious penalty. I’ve been in these meeting, I’ve heard the mentality of these people and their lack of compassion for America and it’s citizens. America has turned into a corrupt society and only 1 thing can change that.
    A punch in the face at the gym is only the beginning as Americans wake up and realize that they have been duped. I truly expect some serious payback to some of these executives to are too arrogant to think that they are untouchable. This goes much much deeper than anyone would like to admit, but since we’re talking about the big picture.
    A meetings where large Bank CEO’s are chuckling about sending Marines into caves only to find no-one at the cost of lives and America pocketbook as they make Billions off of the war. Setting up a game plan to offer high risk loans knowing that consumers would not be able to payback the loan to take their home and make ten of thousands on selling the home creating made up fees upon the completion of the sale. Buying and selling oil futures to jack the price well above 140 per barrel and blame it on Product and demand when in fact the demand decreases. However, the plan has backfired. The real estate market has crashed and they are now losing their ass. It has all come crashing back down at the expense of the sole American. The market crashes and continues to crash. Banks continue to fold up, file for BK or merge with our tax dollars. And as these Markets crashes, oil comes back down to a respectable level. I’ve been in these meetings and you would not believe the greed and arrogance that come with them.
    So the Bankers want to control America!!! Soon, Americans will take America back. Millions are tired of being tired and it’s getting old rather quickly. More and more liberties are taken from us everyday from the twisted Government whom ignores our Constitution. This is the plan. Stand up and be counted or take cover. No longer will Greed and Corruption run this Country. I pray that it can get turned around while the people are held accountable for their actions before it’s too late.
    Since we are looking at the big Picture!

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    Robert Shumake Fifth Third

  12. Says:

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