Introduction

Bankinter, a small independent national bank, has a large presence as an Internet

financial services provider. It was the first Spanish bank to offer telephone,
electronic and virtual banking. Bankinters positioning as a multichannel, online
banking gave Bankinter a major competitive advantage over larger and more
established Spanish banks (see SWOT analysis: Appendix A). However, Ann Peralta,
director of Internet network at Bankinter, needs to evaluate which customer
segments are most profitable for the bank and develop a plan for new customer
acquisition while balancing costs with rate of growth and profitability.
Current Marketing Strategy
Bankinters current marketing strategy involves developing alliances with portals,
partnering with e-collaborators, and maintaining brick and mortar branches. Some
of the strengths and weaknesses of each of these strategies are illustrated in table
below:

Strengths

Alliances
High traffic portals
Co-branding

E-collaborators
Brick and Mortar
High traffic sites More loyal
customers
Low acquisition
Easier to crosscost
sell to
Hard to duplicate
Dramatic results Less priceoriented
High non High cost
formalization
acquisition
rates
High operating
Not very loyal
costs
Lack of targeting

High acquisition
costs
Weaknesses Staff Shortage
High upfront annual
fee
Easy to duplicate
Based on the customer lifetime value of each of the following strategies (see

Appendix B & C), 8700 seems to be the most profitable and advantageous client base

for Bankinter, as it has the highest customer lifetime value for the profitable clients
with 267. In addition, its ratio of non-profitable to profitable clients is significantly
lower in comparison to the other two strategies.
Iberianwines.com Strategy
As noted in the table above, e-collaborators program has dramatic and immediate
results. However, on average only 76% of the clients from this program complete
the online registration process. Therefore, to estimate the lifetime value of an
average customer from IberianWines.com, we need to account for this lack of
customer loyalty.
Based on other assumptions about the clients from this stream of e-collaborators,
we estimate that the customer lifetime value will be about 82, which accounts for
the 100 referral fee that IberianWines.com is demanding. (see Appendix D)
Bankinter should agree to pay an additional 100 referral fee for every customer
that clicks on a Bankinter banner at Iberianwines.com website, as based on our
assumptions the CLV is positive. Bankinter should however insist on paying 60,
similar to what they are currently paying other e-collaborators or should structure
their contract such that they pay 100 for every customer that clicks and completes
the registration process. This way, Bankinter can ensure that they are only bearing
additional costs for the profitable customers. Moreover, Bankinter can incentivize
customers from this channel to use Bankinter for the wine transactions.

Future Strategy & Recommendation

Bankinter should place a primary focus on their profitable segments, Branch 8700
products, and build relationship with Iberianwines.com. Furthermore, they should
emphasize on cross-selling products to eMortgage and eBrockerage customers since
they are active as well as significantly profitable in comparison to other 8700
customers. With respect to ecollaborators and Alliances, Bankinter needs to
increase profitability by:
1. Increasing retention rate of profitable segment
2. Increase volume of profitable segment
3. Decrease ratio of non-profitable to profitable
The above three dimensions had the greatest impact on the expected value based on
sensitivity analysis performed.
Bankinter can also utilize CRM and other tools to do more focused and targeted
marketing by placing banner ads on sites that cater to affluent clientele. In addition,
Ana can leverage Bankinters deep client knowledge to maximize client potential
through cross selling. They should also introduce referral and loyalty programs for
customers. Combining these strategies will help the bank increase profitability by
increasing retention rate of profitable segment while decreasing ratio of nonprofitable to profitable clients.

Appendix A: SWOT analysis of Bankinter

Strengths

Weakness

Multichannel banking and

customer interaction
Early mover into online bankingwell positioned to take advantage
of internet boom
Offers diverse and innovative
services
Used CRM system to store and
track customer information
Customer centric approach

Difficult to cross-sell products

online
High number of non-formalized
clients
Fast-cycle industry
low online customer retention
high customer acquisition costs

Opportunity

Threats

Diversification
Increase its presence in Spain and
other neighboring countries
Partnering up with other financial
services

Online customers are not as loyal

Low barrier to entry
Internet bubble burst

Appendix B: CLV calculations of each of the strategies

Appendix C: Expected Profit

Appendix D: Iberianwines.com Analysis