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Capital One is a US based financial corporation founded in November 1994. In 1998 Capital One
opened its first overseas service at Nottingham, UK. Within a span of 6 years of its inception, its
stock price increased by 1000 percent with an average annual growth of 40 percent.
Success behind such a phenomenal growth is through the vision of its leader Richard Fairbank
and Nigel Forris.
 Vision that transcends myopia: To develop a information-based company rather than a
financial company.
 Core strategy: To tailor their service and product as per individual customer requirement so
that the “right product (credit card) can be provided to customers at right time and right
price”. Such an offer was a unique proposition in a market which lacked customisation and
one to one marketing.
Marketing & Analysis Operations Information Technology Human Resources
 Segmentation  Processing Supports Business issues  Managing associate
 Proposal Testing  Customer Relations and decision through selection
 Analysing data  Sales application & software  Supporting and
 Collections engineering developing culture

Drivers of success:
CRM is viewed as a key strategic process in Capital One. Capital One show cased that CRM can be
translated into strategy, organizational design, hiring, marketing processes, and IT infrastructure
of a company .Different depts. work in an integrated fashion towards understanding and
satisfying customer.

 Intensive Primary research:

− Pre purchase: Information based strategy (IBS) facilitated collecting information and
utilising it to understand customers need and risk profile for tailoring the offering.
− Post Purchase: It facilitates to reactivate dormant customer through customised
benefits or incentives design. This provide base to frame retention strategies.
 Proper Segmentation:
− Clearly categorised each customer under Low Risk Transactor or High Risk Revolver
− Targeting all types of risk profiles and offering different prices and products.
 Beta testing: Full proofing the offer before launch by test running it on 36000 -40000 odd
customer. This further helps in fine –tuning the offer for better acceptability (Test and
 Aggressive pricing: Offered lowered interest rate, low fees and low-cost balance transfer
 Effective upward communication: Inputs from front end associates are given due
importance in crafting strategy for customers.


 Efficient Associate Man-power management: Providing training to associates (not linked to
customer interface) inorder to handle customer during peak time (flexibility). This negates
the inefficiencies during exigencies.
 Assuring associate satisfaction: It is done through weekly review and feedback, rewards
recognition and highlight for good performance, personal development action plan (DAP)
coaching and mentoring. This instils motivation and sense of responsibility.
 IT enabling cohesion: In house IT provision provided the competitive edge for quick
customisation and sustain data secrecy. It is an enabling departments to improve their
efficiencies like
− Maintaining real time data of each customer so that each employee can deal with
customer at any time without any repeat propositions.
− Provide immediate statistics of customer transaction for facilitating cross –selling or re-
structuring the offer without wasting time. (Known as SALSA system).
− Automated decision algorithms has helped in making quick and decision and alarming
future fraud probability.
 Capital One as Adviser during adversities: A fraudulent customer is also treated with
sensitivity. It analyses the root cause and support through revised terms, patching them with
recruiting agency etc.

Potential Threats:

 Individual based customisation is a hurdle for revenue forecasting and sustenance.

 Entering new markets will be time taking as most of the activities self-driven and developing
same type of infrastructure for each market will not be economically viable.
 With increasing consumer base, also demands for higher capital investments in IT in
managing the data. This will affect the profitability in the risk driven market.
 Customer may get confused if somebody starts comparing offering with other customers. A
feeling of differentiation may arise which may lead to distraction.


 Should try to avoid customisation for low profitable customer, otherwise it leads to over
expenditure on manpower and technology cost in handling such customers.
 Must outsource few of the activities related to fraudulent customers which consumes more
time with least return.
 Should to look for new avenues for attracting customers other than just revising plans,
incentives and rewards.
 Must refrain from regular mailings about new products which usually leads to customer
 Should look for a set of standardised products that will be applicable to a cluster, which
indeed could reduce their transaction cost. Attending all may not be sustainable.