Customer Profitability and Customer Relationship

Management at RBC Financial Group

Group 9
Aniruddha Majumder Kodaru Sai Rahul Rajat Magotra Sayan Bhattacharya
Contents
01 About the company

02 Events Leading to the Change

03 Implementation of CRM

04 After effects of the change

 About RBC Financial Group
5 Major Lines of Business

1 Largest Canadian financial RBC Banking : Personal and

2 institution 1
12 million clients commercial banking
worldwide
2 RBC Insurance : Insurance

3 700 products
3
RBC Investments : Wealth
60,000
employees 4 4
management

RBC Capital Markets : Corporate

and investment banking
5 C$270 billion in
assets RBC Global Services :

6
1.6 billion spent on IT 5
Transaction processing
in 2003
 RBC Banking
Capital
Markets
17% Global
S ervices
6%

1. 54% of Net income from Banking Investment

15%

2. 1300 branches, 4800 ABMs

Insurance
8%
3. 1.4 million online customers
Banking
Insurance
Banking
4. 300 offices in 30 countries Inve stme nt
Capital Marke ts 54%
Global Se rvice s
 Changes in the Industry
Nature of Competition Regulations
Pre-1990’s 6 largest Banks enjoyed friendly competition The deregulation and lowering of domestic protections of 1986 &
1987 led to the Market being opened up to outside players

Technology Changes Need to stay competitive

The Industry became more focused on technology with traditional The market that had been largely undifferentiated till date had
bank tellers slowly being replaced become bustling with smaller and more focused players. The time
had come for large existing players to reinvent themselves or
become obsolete

Major Findings from the 1997 Study

01 CUSTOMER INTIMACY
Trust, reassurance, a feeling that the bank knows them,
understands their needs, recognizes who they are and
value their business

02 Differentiation
Differentiation among the leading Canadian banks was
highly sought after. Conventional methods were not
sought after any more
 Focus on Customer: CRM
Response
Key Features to Direct
Marketing
The aim to establish CRM at RBC financial
group was to integrate all the data related to Products Level of
targeted service
a customer: this includes all customer for before customer
contacts, transactions, accounts and qualifies for
Ideal CRM
interaction history with the customer. In
Solution
short, create a one view where all
information related to a customer can be
accessed Address,
age, a/c Previous
balances Contact
 Customer Segments
3 Primary Customer Segments & 9 Total Segments:

A. Key Markets
1. Youth
2. Nexus Key
3. Small Business Markets
4. Farming and Lifestyle Agriculture

B. Growth Markets
5. Building
6. Business
7. Agriculture Growth Prime
Markets Markets
C. Prime Markets
8. Accumulating
9. Preserving
Product and Segment Management:
Product
• Structured to sell a specific
product to everyone
• Multiple people selling to same
customer
Segment
• Structured to satisfy all needs with
all products
• Employees concerned with meeting
needs not selling a specific product

Products

B
C
D
Segment
A E

Customers
Customers
Timeline: CRM Capabilities
1997 Study Info changes focus to
creates a profitable & potentially
platform for CRM software &
CRM profitable customers
practices continue to
be modified based on
1997 1998 1999 2000 internal & external
customer feedback

McLaughlin hired Software selection

as VP of Marketing (Value Analyzer) to
& Info Management facilitate CRM
CRM: The Results
• Satisfying Customer Needs:
Important to stay competitive and keep current
customers

• Creating Efficiencies:
Not only invest in satisfying customer needs but
also save money while doing it
 • Focus on customer needs: ensures

Satisfying right products at right time

• More efficient use of customer data
Customer - Customized marketing

Needs - Levels of service

- Product design and pricing
• Increased profitability
RBC Financial Group: Net Income

Net Income by Year

(in millions)

$2,898
$2,435
$2,208
$1,772 $1,725

1998 1999 2000 2002 2003

Creating Efficiencies:
Better Customer Identification
• Before CRM:
“A”, “B”, or “C” customers
Vague and not beneficial
• After CRM:
Customers can both be profitable and
have the potential to be profitable Centrally Generated Sales Leads
• Before CRM:
Every branch had a different way of generating sales leads
Low quality, not consistent
• After CRM:
Generated centrally
Accessible to everyone
Reminder to call and offer products
Life Stages and Segments:
Key Growth Prime
Getting Started Building Accumulating Preserving

Saving for
Retirement
Retirement

Saving to
buy a home
Buying a home Transfer of
Wealth/Succession
Graduation Planning Planning
Summary of lessons learned:
• Always keep client front and center-
“A satisfied customer is the best
through process and implementation business strategy of all”
• Manage change with communication and vision

• Integrate CRM into business strategy

• Continually reevaluate, test, learn, and improve strategies

Future plans for CRM:

Preference and Choice:
• Use info about customer’s preferences to
design packages of services at certain
points in their life
Thank You!