Do you agree with RBCs decision to

withhold profitability, potential and

segment information from its front
line employees ?
Option 1 (Status quo )- RBCs present decision to withhold customer information from
frontline employees
Rationale :
1. These employees do not need to concern themselves with such information, and
instead need to focus on listening to the customer and relay information obtained
through the CRM software.
2. The front line employees may not understand what the segments mean and how to
use it.
3. Employees might use this information to treat less profitable customers worse than
the extremely profitable ones.
4. In the worst case, employees might tell the customers what their segment is or their
profitable level which may lead to customer backlash.
5. Client confidentiality and privacy could be an issue.

Disadvantage:
1. Front line employees miss out on opportunities to establish more intimate
relationships with customers, including their needs and preferences
2. These employees will not be in the best position to make crucial decisions based on a
deep understanding and knowledge of their customers

What we recommend:
Option 2 - RBC should provide filtered information . RBC can provide frontline
employees with customer information at the individual level including profitability
and potential but withhold segment level information in order to discourage
segment level thinking.





Should Jamie Reich make the car loan to the niece, if so, at what
interest rate?

Without any customer information- Jamie Reich can deny the
car loan, seeing as the niece is not part of the relationship
banking program, and is demanding an interest rate (2.5%) that
is not in-line with what the CRM software suggested (4%).

Armed with particular customer information - Jamie Reich can
approve the car loan at prime plus 2.5%, which is what the
customer is demanding. This option may prove fruitful as the
niece may have great potential value and is accompanied by a
long-term and important customer.
Example to illustrate how frontline employees can make better decision
with personal customer information including profitability and potential
What should RBC do about customers who are
unprofitable because they use retail branches
and ABM machines for bill payment?
Option 1 - RBC can continue to allow unprofitable customers to use this channel for bill
payments, effectively increasing (or avoid decreasing) customer satisfaction.

Advantage:
Allowing customers to continue using ABM machines and retail branches for bill
payments will likely lead to highest levels of customer satisfaction
Disadvantage:
RBC will continue to loose profits, but will be able to retain these customers in hopes
they will be profitable in the future. This first option does not provide optimum mutual
benefits, and will continue to drain the companys resources

Option 2 - RBC can fire or divest these customers as they have proven to be unprofitable.
Advantage:
Profitability will likely increase if this option is executed
Disadvantage:
The company will loose these customers, even though they may be profitable in the
future.
This option is only beneficial for RBC, and provides no value for the customers.
This option will result in very low customer satisfaction



Recommended option:

Option 3 RBC can provide incentives for these customers to switch channels for bill
payments, including the use of Internet or mobile banking. RBC can effectively change the
behaviour of these customers to transform them into profitable customers through
education and migration

Advantage:
It provides the most mutual benefits and greatest value for both parties
RBC will be able to transform these customers into profitable customers, and retain these
customers to reap their lifetime value
If done correctly, customers will understand the value of these new channels (internet,
mobile, etc.) and be fully satisfied once the switch has been made
Although this option requires the most resources to execute, it provides the most potential
profit when compared to the other two options

Disadvantage:
This option will likely affect customer satisfaction if done inappropriately
The company will need to spend a lot of time and resources on educating and persuading
customers to migrate to new channels, which may cause resentment at first

Option 1
(Status quo)

Option 2
(Divest or fire
customers)

Option 3
(Educate and migrate
customers to profitable
channels)
Overall
profitability
for RBC

RBC will continue
to
loose money
RBC may be able to
reduce the drain
on profits by
divesting or firing
these customers
RBC can migrate customers to
Internet channels for bill
payments, which cost very low
per bill payment as opposed to
$2.26 for ABM bill payments.
Mutually
beneficial
Only benefits the
customer, while
negatively
affecting
RBC
Customers will
receive no value if
they are fired. It is
only beneficial for
RBC to execute
option
This option provides mutual
benefits for both parties, and
optimizes the value each party
Receives
Customer
satisfaction
High Low Customers may not be happy
being asked to switch channels.
Until customers recognize the
value of internet banking, they
will not be fully satisfied
Option 1
(Status quo)

Option 2
(Divest or fire
customers)

Option 3
(Educate and migrate
customers to profitable
channels)
Ability to retain
customers with
prospects of
becoming
profitable
customers
Very High Firing customers will
provide no chance
of retaining them in
the future if they
prove profitable
later on
If customers migrate to
new channels successfully, RBC
can retain them and reap
current and future Profits
Customer
resentment/co
mpany
reputation
Customers
will have
no
resentment
towards
RBC
Customers will likely
resent RBC,
impacting
their reputation.
Customers may resent the
company at first, if they feel
pressured to migrate. It is better
to educate the customer and
allow them to freely switch
channels.
Drain on
resources
High Low RBC will need to use a lot of
resources to educate consumers
and convince them to switch
channels. It will likely take many
resources and time to
successfully Execute.