Service Operation Challenges at the Commerce Bank - Case Study Example

Service Operation Challenges at the Commerce Bank Executive Summary The paper addresses the challenges experienced by the Commercial bank, in its efforts to provide services and products that achieve and exceed the expectations of the customers. High quality banking service is important to the customers of the Commercial Bank (Bruce, 2005). The bank has hence adopted the internal systems of cultural training to enhance the commitment to attract and retain the customers. Majority of the customers visit the branches of the bank for services, hence the experience should be positive, despite the busy nature of the banks. One of the major issues adopted to develop the appropriate banking atmosphere involves provision of a juggler, guitar player, and free hot dogs. The entertainment measure has, however, been controversial. Critics wonder if the customers really need entertainment services at the branch. Some customers may consider the branch entertainment as an unnecessary distraction in the banking hall. The core aspects that enhance employee satisfaction at the Commercial bank include; appropriate banking products, superior customer service, reliable and effective distribution networks for banking services, and competent employees who are adequately trained on superior customer service (Jose, 2014). The Commerce Bank has presently adopted competitive advantage strategies that enhance customer satisfaction levels. The bank has extended banking hours, which increase the access levels of the services provided. The bank opens during the weekends and also in the evenings. The growth strategy of the bank involves building banking models from scratch. The mergers and acquisition concept is not desirable because it dilutes business brands. Customers are attracted by a superior business brand, and this is the main reason why the Commercial Bank values independent development of the business model. The value of the bank is determined by the deposit base. A high deposit amount explains the high interest that customers have concerning the banking products. Background The Commerce Bank continually strives to improve service delivery and enhance customer satisfaction in the competitive banking industry in America, and also internationally. Challenges are experienced in the course of meeting customer expectations effectively and efficiently. The main issue entails provision of high quality product and services to the customers. This is because the main priority for the bank involves happy customers. The banks aims at attracting customers, retain them, and exceed their expectations (Murray, 2012). The bank strives to compare its operational performance with the retailers like Home Depot and Starbucks. This is nontraditional, because majority of banks also compare performance with other financial institutions. For example, the bank compares stock price with the power retailers. Commerce wants a positive experience for its customers. The additional banking features provided by the bank are aimed at achieving the appropriate levels of customer experience. These features include; evening banking hours, provision of coffee and newspapers, and providing entertainment. Commerce Bank has the main problem of continuously attracting and retaining the customers. This is through the development of appropriate strategies that aim at exceeding the expectations of the customers. The strategies and programs are responsible for enhancing competitive advantage in the banking industry which has very stiff competition. The banking strategies involve non-traditional approaches that create fun when banking, to achieve an enjoyable experience. Maintaining the high customers satisfaction programs and implementing the appropriate strategies, is a business process that requires a lot of investments. The investments include; staff training, entertainment budgets, superior employee remuneration and financial rewards, and discounts on financial services provided (Ronnie, 2005). Problem Statement Customer satisfaction is a major issue for the Commercial Bank. This is because customer satisfaction directly influences the success of the bank. The bank is presently formulating and also implementing the strategies and programs that aim at improving the customer satisfaction and experience levels. One of the adopted strategies that aim at effectively achieving the customer needs entails retailtainment program. Retailtainment empowers the branch managers to enhance the customer experience, as they wait for services or products to be satisfied. The customers are given unpredictable entertainment, during the process of service provision. The new ideas are required to increase the competitiveness of the Commerce bank. One unexpected enjoyable concept during service provision, involves entertaining customers during the Friday afternoons. To further attract clients, the Commercial bank engages in the human aspects of marketing or advertising programs. The bank improves the customer satisfaction, through paying more attention towards high quality service. This is the main reason why it offers low rates of interests, so as to provide superior banking services (William, 2013). The bank has, however, experienced several challenges in its retailtainment program. This is because the decentralized programs for meeting customer needs, disrupts the brand or outlook of the bank. The general management of the bank stress that the outlook of the branches must be similar. Analysis of Operational Models The operational models are applicable to the main areas of banking industry operations. The operational models covers the areas of; products, service, distribution and employees. Commercial Bank greatly values the financial products provided to customers. The products entail a major approach of growing the bank revenues, and also maintaining a huge customer base (Murray, 2012). The deposit products enable the customers to save money at the bank, in exchange for almost all appropriate payment methods. The payment methods utilized by the Commercial are diverse and include; branches, electronic transfers, and ATMs. The loan products of the bank are also very attractive and diverse. Approximately 90% of the deposit values are loaned to the clients. The commercial bank offers low interests for the loan products. The commercial bank aims at offering the most superior service to the customers. This is through providing the most enjoyable service atmosphere to the client; for instance, providing entertainment in the banking lobby area, and also snacks or refreshments. Customer satisfaction is significant for the growth of a financial institution. The distribution of banking services provided by the Commercial Bank is very numerous and diverse. The bank has branches and ATM networks in major towns across the United States. The bank believes that many customers value actual branch banking. The banking has also invested in other services such as internet banking. The diverse distribution channels enable the bank to earn high revenue amounts, in addition to enhancing customer experience through several alternative service access platforms. Employees are also adequately involved in the operational models. This is because they are responsible for direct customer relationship and service provision (Ronnie, 2005). The employees are adequately trained on all financial services provided by the Commercial bank. This helps them to adequately address the queries that customers may have. The staffs are training on effective customer service processes that aim at understanding client needs and providing the appropriate solutions for those needs. SWOT analysis is applied in the problem identification process, and also in illustrating the strategies involved in addressing the challenges. SWOT analysis illustrates the strengths, weaknesses, opportunities and threats that the Commercial bank has in the competitive banking industry. The main strength of the Commercial Bank lies in its highly competent staff base and it high branch network (William, 2013). Employees of Commercial Bank are trained on effective service delivery. This involves understanding the needs of the customers, and then providing the most appropriate product, service, or solution. The branches of the branches are adequately spread closer to customers. The design of the braches is also attractive to the customers, due to the ample parking place, and the floor to ceiling windows. The weakness of the bank entails minimal usage of internet banking products. Online banking usage is just 34%. There is huge potential for internet banking. This is because many customers live or work far away from the bank branches. Online banking is also used 24/7; therefore, customers can access services at any time. The opportunities for the bank entail the huge banking potential of the New York City. This is the reason why the bank should continuously invest in promotion, which is presently valued at $500,000 for every branch. The major threat that the bank faces is the stiff competition in the financial services sector. The bank must continuously implement competitive advantage measures, for it to be successful. The dynamic customer needs illustrate another threat. Hence, the bank must strive to understand the needs and achieve them. Recommendations and Conclusion The main recommendation on achieving higher levels of customer satisfaction entails integrating all the appropriate strategies involving the operational models. Effective training of employees will effectively realize higher levels of customer satisfaction (Bruce, 2005). This is because competent employees are adequately capable of understanding the expectations of the customers, and also appropriately achieving those expectations. Increasing the number of branches and ATM network is also effective in enhancing customer satisfaction. The increase in branches takes banking services closer to the customers. Accessing services through the branches is very enjoyable and entertaining, due to the retailtainment program at the branch. Customers are provided with snacks or refreshment and newspapers, as they wait for banking services. The braches also have additional features like adequate parking space. The staffs of the bank also accompany the customers using umbrellas to their cars when it rains. Another strategy that should be integrated involves utilizing extended banking hours during the weekend and public holidays. This increases the contact of the bank staffs and the customers. Adequate adoption of the online banking platform should also create competitive advantage. The platforms enable the clients to access customized banking services at all times. It is very easy to understand the symptoms of declining customer interest in the financial services provided by banks. One key symptom entails the reduction in the deposit value. This illustrates minimal savings by the customers, and hence declining interest in the products offered by financial institutions. Reduced loan applications also illustrate declining customer interest in the services provided by the financial institution (David, 2012). Banking hours also negatively affect the retention levels of customers. People seeking financial services always prefer banks that have long banking hours; for instance, weekend banking. The main critical factors that will ensure high customer service and customer satisfaction involves; long banking hours, enjoyable banking services, personalized customers experience, and customized customer service. On the contrary, retailtainment empowers the branch managers to be unique and also creative. The branch managers effectively understand the branch customer base. But, experience illustrates that it is not appropriate to completely leave managers to their personal views and devices. However, with adequate training, the retailtainment can be a success. Sticking to the present banking model also has supporters. This is because the present system concentrates on only one brand, which is responsible for ensuring competitive advantage. References Blaylock, William. (2013). "Banking Takes a Beating". Time. Lynch, David. (2012). "Big Banks: Now Even Too Bigger to Fail." Bloomberg Businessweek. Meltzer, Allan. (2011). A History of the Federal Reserve: 1913–1951. Chicago: University of Chicago Press. pp. 442–446. Phillips, Ronnie. (2005). The Chicago plan and New Deal Banking Reform. Armonk, New York: M.E. Sharpe, Inc. p. 37. Porteous, Bruce. (2005). Economic Capital and Financial Risk Management for Financial Services Firms and Conglomerates. London: Palgrave Macmillan. Rothbard, Murray (2012). A History of Money and Banking in the United States: The Colonial Era to World War II. Auburn, Alabama: Ludwig von Mises Institute. pp. 36–37. Viñals, José. (2014). "Finish the Job on Financial Regulation". iMFdirect. International Monetary Fund. Read More