CRM In Action: Case Studies

Royal Bank of Canada (RBC)

Financial Group
RBC Financial Group
Largest Canadian financial institution
12 million clients worldwide
700 products
60,000 employees
C$270 billion in assets
1.6 billion spent on IT in 2003
CIO: Marty Lippert
Source:
www.rbc.com/aboutus/fastfacts.html
5 Major Business Lines
RBC Banking personal and commercial
banking
RBC Insurance insurance
RBC Investments wealth management
RBC Capital Markets corporate and
investment banking
RBC Global Services transaction
processing
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
54% of Net
income
1300 branches
4800 ABMs
1.4 million
online
customers
300 offices in 30
countries
Greatest
opportunity for
improvement
Insurance
8%
Investment
15%
Capital
Markets
17%
Global
Services
6%
Banking
54%
Banki ng
Insurance
Investment
Capi tal Markets
Gl obal Servi ces
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
RBC Banking
Change in the Industry
Pre-1990s 6 largest Banks enjoyed friendly
competition
Internet banking
Lowering of domestic protections
Oligopoly ended increased competition
How to stay competitive?
1997 study to determine image perceptions

Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
1997 Study
Major Finding
CUSTOMER INTIMACY -MOST important FACTOR to the
customer.
Definition - trust, reassurance, a feeling that the bank knows
them, understands their needs, recognizes who they are and
value their business

This finding identified a whole new era for RBC
- A shift to differentiation based on customer needs
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.









Importance to
Client








Financial Institutions
Proficiency at Delivering
HIGH
LOW HIGH
Mutual benefits
Reciprocity
Trust
Reassurance
Comfort
Understanding



Convenient Hours
ATM access
1-800 Number
Internet Banking
Short Lines

Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.



1997 Study Results
CRM Vision: Bring together in one place a view
of all contacts, transactions, accounts, and
interactions with each customer.

CRM system would provide the following info to
personal bankers (PBs):
-Address, age, account balances
-Contacts customer has had with company
-Level of service customer qualified for based on
current and future profitability
-What products customer was targeted and approved
for
-How customer responded to direct marketing


Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
Focus on Customer: CRM
VP of Marketing and Info Management-
Richard McLaughlin
-Responsible for CRM infrastructure, info
management, alliance banking, internet
banking, and privacy

Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
Reorganization Around CRM
Customer Segments
3 Primary Customer Segments & 9 Total Segments
A. Key markets:
1. Youth
2. Nexus
3. Small business
4. Farming and lifestyle agriculture
B. Growth markets:
5. Building
6. Business
7. Agriculture
C. Prime markets:
8. Accumulating
9. Preserving
Lockie, Anne, RBC Banking: The Customer Experience, powerpoint slides at rbc.com
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


CUSTOMERS

SEGMENT
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.

PRODUCTS


C
B D
A

E




CUSTOMER
Product & Segment Management
1997 1998 1999 2000
McLaughlin
hired as VP of
Marketing and
Info
Management



Software
selection to
facilitate
CRM



1997 study
creates a
platform for
CRM



CRM
software and
practices
continue to be
modified
based on
internal &
external
customer
feedback
Info changes
focus to
profitable/
potentially
profitable
customers



Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
Timeline: CRM Capabilities
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



Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
Satisfying Customer Needs
Focus on customer needs: ensures right
products at right time
More efficient use of customer data
-Customized marketing
-Levels of service
-Product design and pricing
Increased profitability


Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
$2,898
$2,435
$2,208
$1,725
$1,772
1998 1999 2000 2002 2003
Source:
www.rbc.com/investorrelations/ar_03.html
Net Income by Year
(in millions)

RBC Financial Group Net Income
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

Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
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
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
More Efficiencies
Future Plans for CRM
Preference and Choice:
Use info about customers preferences to design
packages of services at certain points in their
life

Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
Life Stages and Segments


Getting Started Building Accumulating Preserving
Graduation
Saving to
buy a home
Saving for
Retirement
Buying a home
Retirement
Transfer of
Wealth/Succession
Planning Planning
KEY GROWTH PRIME
Source:
Sutherland, Anne, How RBC is taking its CRM strategy to the next level to accelerate profitable revenue growth, presented to American
Bankers Association. 2004.
Summary of Lessons Learned
Identify the key
stakeholders who touch
the application directly
and/or indirectly at the
very beginning of the
project
Gain buy-in from these key
stakeholders that that their
input and support is critical
to the overall success of
the project
More robust Beta Test

Always keep client front
and center-
through process and
implementation
Manage change with
communication and vision
Integrate CRM into
business strategy
Continually reevaluate,
test, learn, and improve
strategies