Introduction:

Capital One is a US based financial corporation founded in November 1994. In 1998 Capital One
opened its first overseas service at Nottingham, UK. Within a span of 6 years of its inception, its
stock price increased by 1000 percent with an average annual growth of 40 percent.
Success behind such a phenomenal growth is through the vision of its leader Richard Fairbank
and Nigel Forris.
 Vision that transcends myopia: To develop a information-based company rather than a
financial company.
 Core strategy: To tailor their service and product as per individual customer requirement
so that the “right product (credit card) can be provided to customers at right time and right
price”. Such an offer was a unique proposition in a market which lacked customisation and
one to one marketing.
KEY DIVISION
Marketing & Analysis Operations Information Technology Human Resources
 Segmentation  Processing Supports Business issues  Managing associate
 Proposal Testing  Customer Relations and decision through selection
 Analysing data  Sales application & software  Supporting and
 Collections engineering developing culture

Drivers of success:
CRM is viewed as a key strategic process in Capital One. Capital One show cased that CRM can
be translated into strategy, organizational design, hiring, marketing processes, and IT
infrastructure of a company .Different depts. work in an integrated fashion towards
understanding and satisfying customer.

 Intensive Primary research:

− Pre purchase: Information based strategy (IBS) facilitated collecting information and
utilising it to understand customers need and risk profile for tailoring the offering.
− Post Purchase: It facilitates to reactivate dormant customer through customised
benefits or incentives design. This provide base to frame retention strategies.
 Proper Segmentation:
− Clearly categorised each customer under Low Risk Transactor or High Risk Revolver
groups.
− Targeting all types of risk profiles and offering different prices and products.
 Beta testing: Full proofing the offer before launch by test running it on 36000 -40000 odd
customer. This further helps in fine –tuning the offer for better acceptability (Test and
Learn).
 Aggressive pricing: Offered lowered interest rate, low fees and low-cost balance transfer
deals.
 Effective upward communication: Inputs from front end associates are given due
importance in crafting strategy for customers.

CRM CASE STUDY EMBA 2015-2016 SOHAM PRADHAN (UEMF15027)

 Efficient Associate Man-power management: Providing training to associates (not linked
to customer interface) inorder to handle customer during peak time (flexibility). This
negates the inefficiencies during exigencies.
 Assuring associate satisfaction: It is done through weekly review and feedback, rewards
recognition and highlight for good performance, personal development action plan (DAP)
coaching and mentoring. This instils motivation and sense of responsibility.
 IT enabling cohesion: In house IT provision provided the competitive edge for quick
customisation and sustain data secrecy. It is an enabling departments to improve their
efficiencies like
− Maintaining real time data of each customer so that each employee can deal with
customer at any time without any repeat propositions.
− Provide immediate statistics of customer transaction for facilitating cross –selling or re-
structuring the offer without wasting time. (Known as SALSA system).
− Automated decision algorithms has helped in making quick and decision and alarming
future fraud probability.
 Capital One as Adviser during adversities: A fraudulent customer is also treated with
sensitivity. It analyses the root cause and support through revised terms, patching them
with recruiting agency etc.

Recommendations:

 Should try to avoid customisation for low profitable customer, otherwise it leads to over
expenditure on manpower and technology cost in handling such customers.
 Must outsource few of the activities related to fraudulent customers which consumes
more time with least return.
 Should to look for new avenues for attracting customers other than just revising plans,
incentives and rewards.
 Must refrain from regular mailings about new products which usually leads to customer
irritation.
 Should look for a set of standardised products that will be applicable to a cluster, which
indeed could reduce their transaction cost. Attending all may not be sustainable.

CRM CASE STUDY EMBA 2015-2016 SOHAM PRADHAN (UEMF15027)