Did you ever wonder what makes one company successful and another fail? Two elements (in my opinion) are the root cause of all business success: customer-centrism and differentiation. Customer-centric organizations are built upon the premise that all actions must add value to the customer experience, whereas differentiation is often expressed as a unique value proposition that distinguishes one organization from its competitors. My father was a food salesman extraordinaire and extremely dedicated to his customers. To this day, I can remember the phone ringing on weekends — customers calling with their emergency situations. As a small child, I remember keeping my father company as he visited the freezer warehouse, picked up a case of much-needed shrimp, and delivered it to a customer at a banquet hall in the nick of time before a wedding. Thanks to this “training,” I have been genetically imprinted with the phrase “The customer is king” at a chromosomal level. Like my father, I find myself freely and willingly giving my home telephone number to my clients (a differentiator and an added value).

For many companies, however, this fundamental concept of customer-centrism is not instinctive. Whether training an employee at a fast-food establishment or explaining his/her role to a newly hired industrial engineer, most managers miss the boat entirely, and most company training manuals are flawed. They tend to focus on the “how,” not the “why.” The tasks of frying hamburgers, working a cash register, and mopping the floor, or calculating warehouse capacity and productivity and creating a blueprint, are only the means to an end, not the end in itself. The underlying goal of all these efforts is simply to satisfy the customer’s need.

As professionals in distribution and fulfillment, we often hear the phrase “thinking outside the box.” I have always believed that one must look outside his own industry to find opportunities for improvement, innovation, and newfound wisdom. The unfortunate reality is that most supply chain practitioners are so busy fighting the proverbial fires of the day to get the orders out the door that they rarely see outside their DC walls. On the odd occasion that they do, the tendency is to benchmark themselves against competitors or those in a similar industry.

Sure, honing your key performance indicators a bit is a good thing, but it’s not the kind of initiative that arms your company with a sustainable competitive advantage. To survive on the modern fulfillment battlefield, material movement must be seamlessly integrated with information flow. Systems must be capable of capturing, processing, analyzing, and disseminating real-time intelligence. Material handling infrastructure must be flexible and scalable to quickly adapt to an ever-changing environment. And above all, each and every process must add value to the customer experience. Only then will you achieve a competitive advantage.

Just as companies such as Wal-Mart and Target have changed retailing, other business models have transformed their industries. If we are to truly think outside the box, perhaps looking at extraordinarily successful businesses in other industries and market channels would be a good place to start.


With this in mind, I began to look at companies that are head and shoulders above the rest in their market, so much so that they create a unique value proposition. One that immediately came to mind was Commerce Bank. Just sit back and think about how many decades had passed without meaningful change in the banking industry. Well, now all that has changed.

Commerce Bank bills itself as “America’s Most Convenient Bank” — and lives up to its tag line. It pioneered the concept of seven-day branch banking, virtually doing away with the notion of banker’s hours. Everything about the Commerce Bank experience is different, from the way the branches (they’re called “stores”) look to the way you are greeted by tellers and managers. It is overwhelmingly apparent that the staff is there to serve you and make your banking experience not only painless, but pleasing. From red lollipops and free kid-friendly coin-counting machines in the lobby to the painted murals of historic “Main Street” depicting the towns in which the branches reside, the entire experience has been designed to be “delightful,” according to the bank.

It is apparent that the company has expended great effort to avoid what irks us and to provide what customers really want. Pens are not attached by chains to the counters, for example; buckets of Commerce Bank pens are freely available both inside and at the drive-through. The container of dog biscuits at the drive-up window has even induced a Pavlovian response in our family pet. My dog likes to go to Commerce Bank.

Counters, workstations, and desks are immaculate. The stores are devoid of clutter; there are no post-it notes, notices, charts, or memos taped to the walls. The atmosphere is clean, organized, professional, and extremely civilized. You’ll never hear the word “Next!” shouted to summon you to a teller or desk associate at Commerce bank. Employees actually clear their desks of the previous transaction, get up and walk across the lobby to shake hands, greet the next customer, and escort him to their workstation.

In my experience, this is the antithesis of other banking experiences. These folks get it! They truly understand the importance of serving their customers and they execute flawlessly in this regard.

So how does this commitment to customer-centrism translate into growth and profitability? Can any bank be profitable if it doesn’t chain pens to a desk and does away with cumbersome rules? (For instance, employees earn bonuses for thinking of ways to “kill a stupid rule” that customers may find annoying.)

Commerce Bank (Commerce Bancorp NYSE: CBH) currently has assets exceeding $30 billion and last year achieved a deposit increase of 34% and earnings-per-share growth of 26%. Maintaining an aggressive expansion pace, Commerce Bank is working toward a total asset goal of $50 billion, a branch network of 515 offices, and more than 15,000 employees by the year 2007. It has been recognized for its leadership with awards that include Business Week‘s “50 Top Performing Companies of the S&P 500,” Philadelphia magazine’s “Great Places to Work,” “Best In Remote Banking” by Microbanker, and “50 Best of the Best” for service by Fast Company, among others.

Compelled to find out more about this revolutionary business model, I reached out to the man behind Commerce Bank, founder and chairman Vernon W. Hill. Asked what is different about the customer experience at Commerce Bank and how the bank has leveraged this advantage, Hill responded: “Commerce Bank opened for business more than 30 years ago with a focused commitment to providing quality banking services through every available delivery channel. Since then, the bank has developed a unique and very successful retail model, which has produced dynamic growth.”

Change Management Paths
Ignore change Perish rapidly as the operations performance gap between you and your competitors widens.
React to change Fight fires; apply proverbial Band-Aids, bubble gum, and duct tape; manage crises; wither slowly and painfully.
Plan for change Smooth operational turbulence and mitigate risk.
Drive change Achieve strategic advantage and tactical superiority.

From its inception in 1973, Commerce has expanded from its original base in Marlton, NJ, to more than 300 locations throughout New Jersey, Pennsylvania, metro New York and northern Delaware.

Commerce Bank’s internal training aids tout that they wish to create “fans” (not just customers) so passionate about their experience with Commerce that they tell friends and family. According to Hill, Commerce Bank employees are committed to “wow” the customer. He defines this company mantra as “exceeding customer expectations … creating surprise and delight” in each and every customer interaction.

“At the heart of Commerce’s success is a unique business strategy that incorporates the best practices of the nation’s leading consumer-focused retailing companies,” says Hill. “Commerce looks different, thinks different, and provides a truly different banking experience. The bank’s ‘have it your way’ approach emphasizes the importance of providing customers with convenient, quality financial services, whenever, wherever, and in whatever way they may want them.”

Perhaps it is the word “different that is most important here, particularly in industries and market channels that are ripe for change. After all, this is the first time I have ever been excited about going to a bank, much less writing about one. There is a corporate culture here that values the customer experience as something sacred, and Commerce has made it fun by inviting every employee to a “WOW! the customer” gala event in Boardwalk Hall in Atlantic City where employees are honored in the presence of their peers for their customer service accomplishments. We’re talking singers and dancers and specially choreographed stage shows complete with Commerce Bank lyrics, with some tellers and managers wearing feathered plumes in the chorus line, and even appearances by Donald Trump and the Radio City Rockettes!

At the 2004 Warehousing Education & Research Council national conference, held in Atlanta, Wal-Mart CEO Lee Scott said that the success of Wal-Mart, the world’s largest retailer, is largely due to its people. When asked about the importance of people and training to the success of Commerce, Vernon Hill says, “Commerce has built one of America’s unique retail cultures. At the start, Commerce had a staff of nine people. Today we have 11,000. Encouraging the ‘wow’ spirit among employees clearly is critical to our ongoing success. We also offer orientation and continued education classes for career growth at Commerce University.” But perhaps more telling than Hill’s answer is the fact that he spends the entire month of December touring all 300 stores to spend face-to- face time with customers and store workers. The bank’s commitment to people and training starts at the top.


Just as Vernon Hill did with Commerce Bank, we at OPSdesign Consulting began to examine the things that clients disliked about consulting firms and specific consulting experiences, and we engineered our firm to match the customer wish list. As a result, nearly thirty percent of our 2004 revenues were the result of finishing projects that other consulting firms had started, and virtually all of our business came from referral and client reengagement. We became more efficient and our income-to-expense ratios improved, allowing us to provide greater value to our clients.

Concurrently, we have made a conscious effort to identify and recruit extremely talented people with a prerequisite that they be of the “glass-half-full” variety. We seek to hire people who wake up with a smile and a sense of purpose in their lives, enjoy and share humor, and take pleasure in both personal and team accomplishments.

We focused on helping our clients achieve strategic advantage and tactical superiority by using our formula of adding value, reducing cost, assuring quality, and compressing time. We created a means to measure our client’s “operations performance gap,” which we defined to mean the gap between current supply chain performance and that which is possible.

We reaffirmed our commitment to help our clients rid themselves of operational pain. This pain can be driven by business volume (growth, regression, acquisitions, or mergers), shifts in market channel, increasing SKU counts, changing order profiles (smaller orders, more often), different SKU cube and weight characteristics, rising operating costs, shorter order cycle time requirements, increasing inventory levels, customer requirements for value-added services, unacceptable order accuracy measurements, an inefficient distribution network, poor visibility of real-time operating data, or new compliance or regulatory requirements.

As a result of our ongoing efforts, we helped our clients avoid pain by designing flexible, scalable systems that smooth operational turbulence, mitigate risk, and contribute to high levels of customer service. The combination of these qualities in our service has proven to be a significant differentiator for our consulting organization.

No matter what your industry or market channel, the lessons learned here can be effectively cross-pollinated to your business model. A focus on customer-centrism and differentiation is a proven formula for success.

Lawrence Dean Shemesh is president of OPSdesign Consulting, which specializes in the design of warehousing, distribution, and fulfillment operations. Shemesh can be reached at (856) 866-9944 or by e-mail at

Partner Content

Hincapie Sportswear Finds Omnichannel Success in the Cloud - Netsuite
For more and more companies, a cloud-based unified data solution is the way to make this happen. Custom cycling apparel maker Hincapie Sportswear has leveraged this capability to gain greater visibility into revenue streams, turning opportunities into sales more quickly while gaining overall operating efficiency. Download this ecommerce special report from Multichannel Merchant to more.
The Gift of Wow: Preparing your store for the holiday season - Netsuite
Being prepared for the holiday rush used to mean stocking shelves and making sure your associates were ready for the long hours. But the digital revolution has changed everything, most importantly, customer expectations. Retailers with a physical store presence should be asking themselves—what am I doing to wow the customer?
3 Critical Components to Achieving the Perfect Order - NetSuite
Explore the 3 critical components to delivering the perfect order.
Streamlining Unified Commerce Complexity - NetSuite
Explore how consolidating multiple systems through a cloud-based commerce platform provides a seamless experience for both you, and your customer.