Customer Relationship Management

1
Customer Relationship Management

• Capital One (UK)

2
20 Earnings growth and 20 ROE growth for 8
years in a row
35
30
30
Earnings per share
20
20
30
20
30
39.8
23.3
22.9
23.0
25.3
25.8
27.5
24.5
ROE
21.6
3
Definition of CRM

• CRM is the strategic process of selecting the
  customers a firm can most profitably serve and
  shaping the interactions between a company and
  these customers. The goal is to simultaneously
  optimize current and future value of customers
  for the company as well as satisfaction for the
  customer.

4
Testing revealed a profitable opportunity
Solicitation Results (1 year after booking)
16
14
Pre-Nov
. 91 Solicitations
12
10
of Managed Loans 60 Days Delinquent
8
6
4
2
0
0
10
20
30
40
50
60
70
80
Credit Line Utilization
5
Which can then be exploited
Solicitation Results (1 year after booking)
16
14
Pre-Nov
. 91 Solicitations
12
10
of Managed Loans 60 Days Delinquent
8
6
4
2
0
0
10
20
30
40
50
60
70
80
Credit Line Utilization
6
Integration of Analysis and Interaction
Automation
7
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Application to another industry/company

• -Top management orientation
• -Integration of organizational processes
• -Technology alignment and information capture
• -Implementation
• Analytical, Operational

-Customer behavior -Customer attitude -Learning
about the customer -Profitability -Product and
service adjustment
-Degree of customer heterogeneity (LTV, cost to
serve, risk) -Level of interaction
(granularity) -Directness of contact
(channels) -Information richness -Type and
frequency of category purchase -Nature of product
(customizability, hedonic vs. utilitarian
attributes)