RBC LTV Calculation

What is the lifetime value of the niece under

both methods?
See the attached worksheet for the percentile
method of LTV calculation. The model assumes
that profitability is a function of age, leaving out
other factors.
Markov chain explicitly models all the possible
combinations of products a person could hold. If
N = 20 (N being the number of products the
Bank offers) then, 2 (2 x N) (greater than a trillion)
is the number of entries in the probability matrix.

Markov Chain Method

RBC Presidents Remarks

RBC President and CEO, Gord Nixon made a presentation entitled Leadership
in Integrated Financial Services on January 23rd, 2002 at the Canadian Banks
CEO 2002 conference. The presentation summarizes CRM at RBC as follows:
The information on our customers gives us insights into their lifetime value,
vulnerability, risk, propensity to buy, and channel preference. We use this
information to develop a strategy for each of our Personal & Commercial
Banking (P& CB) clients and optimize sales effectiveness and customer
contact. We pay extraordinary attention to our high value and high
potential clients.
The presentation identifies cross selling as one of the main benefits of CRM. It
states:
The referral program, which tracks and encourages business referrals between
different parts of RBC Financial Group, has led to us garnering nearly $13
billion of new business, or $2.20 of new business for every dollar of business
referred within the group, between 1998 and 2001.