Stopwatch Marketing Blog

Commerce Bank has been sold to Canadians! TD BankNorth, leveraging the surprising strength of the loonie, anxious to get secure a bigger footprint in the US, and interested, no doubt, in learning about this strange “customer satisfaction stuff,” has purchased one of the exemplars we describe in the Recreational Quadrant chapter of Stopwatch Marketing.

The marketing story, as told by others as well as by AnnaMaria and me, is simple in its conception and extremely challenging in execution: Make the branch an inviting, pleasant place to visit, then people will visit it, and then (here’s the trick) capitalize on that time to sell them something!

There’s plenty in the book about Commerce, so I won’t belabor and repeat it all here. But, I thought I would share my response, below, to a financial newsletter writer who was publicly bemoaning the departure of a company he loved and a stock on which he’d made real money:

First of all, a disclaimer – as a personal investor, I did, indeed, make some nice money on CBSH stock over some of the period in your chart. I sold about a year ago.

Anyway, as noted, I write on marketing and my book, Stopwatch Marketing, includes a chapter on Mr. Hill’s brilliance in taking a heretofore Reluctant or Impatient consumer experience and turning into a Recreational one. We literally compare what Vern wrought with John Mackey’s accomplishments in making supermarket shopping equally exciting – Recreational, in our terms – at Whole Foods Market. Getting rid of the forbidding bars at teller windows, staying open long & weekend hours, including a change machine, presenting a generally appealing, inviting, convenient experience were all, seemingly, innovations (!) on Vern’s part. As a marketing consultant, I would argue, of course, that the great profits and skyrocketing stock price resulted from such a well-executed retail consumer satisfaction strategy. We aren’t the first, of course, to write about Commerce Bank in this vein, many commentators on marketing strategy have directed their readers to benchmark Commerce.

Herewith, however, something that isn’t in our book, but you may feel free to use it, or the logic behind it, in your own investments newsletters, etc.: While consulting on marketing to other retail banks throughout the nineties, I found myself often terribly frustrated, sputtering at them – and I am, indeed, quoting here – “this is the only retail category in the country that celebrates closing down branches, getting people out of the stores!” This was, of course, a period when “bricks and mortar” branches were considered cost centers not profit centers and everyone was ga-ga over the electronic future when branches would simply fade away entirely. I would shriek at my clients of the time that I couldn’t imagine top retailers (think Home Depot, Barnes & Noble, Payless ShoeSource, Wal-Mart, and Target) celebrating how many branches they shut down, how many customers (!) they transitioned over to a remote interface, or “handled” via a call center rather than a store employee. “Why don’t you put in an espresso machine and some cookies?” said I. The response from my clients would invariably be that customers might then spend too much (!) time in the branch. I would continue with “And then maybe someone in the branch can SELL them something…like a car loan or mutual fund or credit card!”

So, the investment opportunity in, say, 1995, was the retail bank that acted like a retailer, not like a banker.

   

 

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