1. In the post-war era, RBC Financial had devised a philosophy of being “all things to all people.” However, as the banking industry involved and became more deregulated, niche players entered the markets with focused product offerings and several technological advancements re-shaped the industry. In order to keep pace, RBC re-focused its energies on creating an environment of customer attentiveness and satisfaction as a way to retain existing clients and attract new clients. To this end, the bank developed a customer relationship management (CRM) technology which attempted to centralize all critical information about certain key customers and make this information available to certain personnel throughout the bank. RBC also realigned its structure along primary customer segments – Key, Growth, and Prime. The goal was to group customers by the life stage of their banking business and their profitability and to service them accordingly. Given RBC’s CRM philosophy, this structure made sense as it ensured that the appropriate bank personnel would properly service clients in an appropriate manner and that they would have access to key information before interacting with the client. This would lead to a more streamlined interaction and potentially more business. I believe RBC’s new philosophy made the bank better equipped to compete with niche operators as it made the bank more customer-oriented and easy for the customer to navigate. One of the main reasons customers choose to use such niche players is because they are often more efficient and easier to use than larger banks. However, RBC’s new CRM system sought to take away this competitive advantage.
2. Lifetime value com ...