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Customer Profitability and Customer Relationship Management (Abridged) RBC FINANCIAL GROUP
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Ankush Gupta

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To Be Cont

RBC Group: RBC Royal Bank, RBC Insurance, RBC Investments, RBC Capital Markets, RBC Global Services. RBC Royal Bank is accounted for 50% of RBCs cash net income. 20% of RBC customers are responsible for 100% profit of RBC. CRM to gain competitive advantage and to increase customer profitability.

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Situation

Bank has adopted CRM in early 90s to gain competitive advantage. the time of installation, it keeps on upgrading the program. of worry is: Though fresh CRM program is more effective but on revenues, previous one scored better.

From

Point

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Lets go
Bank

Started with the basic mode of upon:

CRM.
Emphasizing

Self Service Hours

Convenient

Accessibility Reach

ability

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CRM at Royal Bank

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1997, A study was conducted to find out what aspect of banking, customers value most. Involving 2000

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Marketing Study Results

Reorganization around CRM

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Primary customer segmentsKey, Growth, and Primewere used to realign Royal Banks business . This friendly competition was designed to foster close collaboration between functional areas, product and segment managers, and centers of expertise (such as marketing, CRM, and SMR&A).

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CRM, then what?

Through CRM, one can get customer profitability data, personal details like needs, expectations and preferences. Now what to do?

What How

do we do with this information?

can the Bank derive value from CRM and customer profitability?

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Bank

to centralize sales lead generation, locating the sales and marketing groups. and future customer profitability to determine targeted direct marketing campaigns, levels of

current

customer service other customer-oriented decision-making.

Customer Profitability & Potential Measurement @ Royal Bank

To find out the potential customers, Royal Bank segmented its customers into 3 buckets 1. A Most Profit Generating Customers 2. B Some Profit generating customers 3. C Broke even or lost money It helps the Royal bank to align the sales force & to fish out the New

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Value Analyzer (developed by NCR group)

To manage huge database and maintaining good processing , even when the transactions were on. This problem is solved by adopting Value Analyzer, which it is used to calculate the customer profitability as fast as it required

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Output From Value Analyzer

By

using Value Analyzer, bank found profitability ranking changed at least 70% of rankings changed by 1. More accurate separate information 2. Customer specific risk assessment 3. Transactions based fee 4. Cost element

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Nexus (for potentially profitable customers)

Profitability model designed by using 1. Detailed & accurate data of customers 2. Activity Based Costing (ABC) of customer

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Activity based costing

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Lifetime Value Personal direct marketing

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Bank Client Card

SMR&A comes with a smart card for all account holders with Royal Bank. It includes all the client information such as 1. Age 2. Address 3. Who product the customer holds. 4. Targeted for particular lone of credit product. It emphasis branches to make better

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Comparision

Based on how people rate on each model they are classified into 14 categories, for which banks have a specific objective: 1. Retain 2. Grow 3. Manage Client Risk 4. Optimize Cost These categories are used for 1. Marketing Effectiveness

Customer profitability for Customer Decision

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Customers decision depends upon 1. Customized marketing campaign 2. Alignment of pricing discretion 3. Alignment of level of service Based up on the depth & potential of a relationship. Customer decision refer to customer strategies that are build in decision engine. Engine contains a multitude of

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