Target segment

Annual Income

Middle class
Affluent
Most affluent

3000-4500
4500-6000
6000+

Tools
Direct Mail
Take one
FSI
Direct sales
Branch cross sell

Tools

Unit costs

Prospects reached

Direct Mail
Take one
FSI

0.5
0.1
0.05

2500000
2000000
3500000

Direct sales
Branch cross sell

3000/rep
1

60000
50000

Tools

Unit costs

Prospects reached

Direct Mail
Take one
FSI
Direct sales
Branch cross sell

0.5
0.1
0.05
3000/rep
1

1250000
2000000
3500000
60000
50000

All channels
Without direct mail

All channels
Without direct mail

Number of customers
Revenue
Acquisition cost
Direct cost
New customers
Existing customers
Cost: New customer
Cost:Existing customer

Profitability: New customers

Profitability: Existing customers
Total profitability
Less:
Fixed cost: Infrastructure
Advertising expense
Net profit

Break even level

0 = 122.78(X+50000) -(5750000+2000000)-(50000*17.5+36.2*X)
0 = 122.78(X+50000) -7750000 -875000 -36.2X
2486000 = 86.58X
28713

Break even customers

Existing + New
78713.32871

Number of customers needed to achieve ROI of 5 mn

5000000 = 122.78(X+100000) -(6500000+2000000) -(15*100000+33.7

5000000 = 122.78X + 12278000 - 8500000 - 1500000 - 33.7X
5000000 = 122.78X + 4046000 -33.7X
2722000 = 89.08X
30557
Total customers

130556.8029

Number of customers
Revenue
Acquisition cost
Direct cost
New customers
Existing customers
Cost: New customer
Cost:Existing customer

Profitability: New customers

Profitability: Existing customers
Total profitability
Less:
Fixed cost: Infrastructure
Advertising expense
Net profit
Break even level

0 = 163.31(X+50000) -(5750000+2000000)-(50000*17.5+35.81*X)
0 = 163.31X +8165500 -7750000 -875000 -35.81X

459500 = 127.5X
3604
Break even customers

Existing + New
53603.92157

Number of customers needed to achieve ROI of 5 mn

5000000 = 163.31(X+50000) -(5750000+2000000) -(50000*17.5 + 35.8

5000000 = 163.31X + 8165500 - 7750000 - 875000 - 35.81X
4540500 = 89.08X
50971

Total customers

100971.0373

REVENUE AND COST ANALYSIS

% of potential card holders

Potential card holders

Interest revenue

18.20%
15%
12.90%

3385200
2790000
2399400

37.13
86.63
148.5

Total potential cardholders

18600000

Average revenue per cardholder

122.7752928

Average revenue per cardholder

(affluent + most affluent)

163.3145161

(given in case)

Unit costs

Cost estimates (in euros)

Prospects reached

Response rate

0.5
0.1
0.05
3000/rep
1

2500000
2000000
3500000
60000
50000

3%
2.50%
1.50%
25%
50%

Conversion rate of customers

85%

(given in case)

Sales representatives needed

10

(given in case)

Response rate
3%
2.50%
1.50%

Customer acquisition costs (Middle and affluent)

Qualification rate
Conversion rate
60%
30%
30%

85%
85%
85%

25%
50%

Response rate
3%
2.50%
1.50%
25%
50%

60%
90%

85%
85%

Customer acquisition costs (Affluent customers)

Qualification rate
Conversion rate
60%
15%
15%
60%
90%

85%
85%
85%
85%
85%

Break even analysis (Middle and affluent customers)

50000
122.78
18.7
20
50000
0
38.7
0

100000
122.78
18.7
17.5
50000
50000
36.2
17.5

150000
122.78
18.7
15
50000
100000
33.7
15

4204000
0

4329000
5264000

4454000
10778000

4204000

9593000

15232000

5000000
2000000

5750000
2000000

6500000
2000000

-2796000

1843000

6732000

X+50000) -(5750000+2000000)-(50000*17.5+36.2*X)
X+50000) -7750000 -875000 -36.2X

122.78(X+100000) -(6500000+2000000) -(15*100000+33.7X)

122.78X + 12278000 - 8500000 - 1500000 - 33.7X
122.78X + 4046000 -33.7X

Break even analysis (Affluent customers only)

50000
163.31
18.31
20
50000
0
38.31
0

100000
163.31
18.31
17.5
50000
50000
35.81
17.5

150000
163.31
18.31
15
50000
100000
33.31
15

6250000
0

6375000
7290500

6500000
14831000

6250000

13665500

21331000

5000000
2000000

5750000
2000000

6500000
2000000

-750000

5915500

12831000

X+50000) -(5750000+2000000)-(50000*17.5+35.81*X)
+8165500 -7750000 -875000 -35.81X

163.31(X+50000) -(5750000+2000000) -(50000*17.5 + 35.81X)

163.31X + 8165500 - 7750000 - 875000 - 35.81X

Other Revenue

Annual revenue

Total revenue

23.5
36.75
61.25

60.63
123.38
209.75

205244676
344230200
503274150

Potential card holders

4000000
3500000
3000000
2500000
2000000
1500000
1000000
500000

Qualification rate

0
Middle class

60%
30%
30%
60%
90%

Affluent

Effective hit rate

Number of customers

Total Cost

1.53%
0.64%
0.38%

38250
12750
13388

1250000
200000
175000

Most affluent

12.75%
38.25%

7650
19125

30000
50000

91162.5
52912.5

1705000
455000

Effective hit rate

Number of customers

Total Cost

1.53%
0.32%
0.19%
12.75%
38.25%

19125
6375
6694
7650
19125

625000
200000
175000
30000
50000

58968.75
39843.75

1080000
455000

200000
122.78
18.7
12.5
50000
150000
31.2
12.5

4579000
16542000
21121000

7250000
2000000
11871000

(given in case, economies of scale)

200000
163.31
18.31
12.5
50000
150000
30.81
12.5

6625000
22621500
29246500

7250000
2000000
19996500

card holders

Potential card holders

Most affluent

Cost per customer

32.68
15.69
13.07

3.92
2.61

18.70
8.60

Cost per customer

32.68
31.37
26.14
3.92
2.61

18.31
11.42