Royal Bank of Canada has implemented a successful customer relationship management (CRM) strategy over 20 years that focuses on understanding individual customers. The bank mines extensive customer data and provides customer service representatives with individualized customer profiles to ensure consistent personalized service. Royal Bank also demonstrates critical success factors for CRM including executive support, robust data infrastructure, and a culture shift toward customer-centricity.

1. CRM Analytics Royal Bank of Canada
Ganesh Yanamandra
NMIMS MPE-03 Trim 5

2. Highlights
•
Royal Bank [formerly Royal Bank of Canada] is committed to a customer relationship management (CRM)
business strategy that seeks to maximize the value of its customer base through the strategic use of
information. The bank has sought to mine customer information aggressively in an effort to create tailored
product and service recommendations while assuring a high-quality customer experience.
•
Managing the quality of the customer interaction is no small task. The bank is one of the first financial
services institutions (FSIs) that committed itself to a CRM strategy that would give equal emphasis to
service and sales. For Royal Bank this means providing customer contact personnel with the information
that allows for appropriate decision making. In this case, the bank seeks to ensure that service decisions
are standardized.
•
Sales and service strategies for individual customers are currently distributed to desktops in the call
centers and branches. It was the manned channels that Royal Bank first sought to include in its
relationship management capability. As a result, the bank is making strides toward providing individual
staff members with the customer knowledge that enables them to provide a tailored, consistent customer
experience irrespective of points of contact—in effect creating an enterprise wide organizational memory.
•
Royal Bank demonstrates some of the critical success factors that are often identified in organizations with
well implemented CRM projects. Aside from a multidisciplinary approach to CRM, the bank has: visible
and vocal support throughout executive management; a robust data warehousing environment; an
evolving corporate culture that shifts focus from business units to customers, and a willingness to take
risks to improve its CRM capability.

3. Royal Banks – success with CRM
• Early adopter of a client information file (CIF) over 20 years ago
• customer data (a rolling 3 months of detailed transaction data
and 18 months of summarized customer data online in its data
warehouse) to better understand its customers and create
meaningful and actionable segments and customer strategies.
• Executive sponsorship & encouragement
• Committed team willing to experiment with CRM and learn
from its mistakes

4. Customer Interaction & Customer knowledge technologies at Royal Bank

5. Big 5 measures of CRM Analytics
•
Direct customer feedback - available via direct and indirect means; e.g. mined data from communities
and social channels.
•
Comprehensive view of the customer is essential, and necessary to provide consistent customer response
regardless of who in the company is communicating, or understanding customer behaviors for improved
marketing campaigns, loyalty programs or actions from enrollment to referrals to impact on repeat
business. CRM systems should capture customer data from within and without the company to include
social media, store visits, partner visits, company blog comments, and online buying patterns. CRM
analytics can then generate demographic, behavioral and psychographic insights.
•
Measure engagement levels so that you know how active your programs are, how popular your offers and
your partners are, and how well all of this action, or lack thereof, translates into increased customer share
and incremental revenues.
•
Measure and track escalation response efficiencies such as FCR (first call resolution) be that via online
chat, email or phone channels. Customer satisfaction primarily boils down to two things: customer
satisfaction with the purchase and customer satisfaction with problem resolution.
•
Measure and track customer value (Life Time Value or LTV) so that you know the actual value of a
customer relationship. If you look only at the sales record for a customer, you can incorrectly assume
profitability of the relationship. A high-dollar client that is expensive to serve and manage may actually be
unprofitable when all is said and tallied. Conversely, a customer that spends less with you but is profitable
to serve can often be enticed to spend more without sacrificing your profit margin. Thus, a customer's past
buying record does not tell you everything you need to know in determining overall profitability of the
customer. Make sure you have an accurate calculation of actual customer value.

6. Building Individualized Customer relationship
•
The critical challenge for Royal Bank is to recognize that it must act in accordance with the wishes
of its customers while still trying to achieve its own strategic objectives. If customers do not
emphatically make known their expectations of the organization, the bank attempts to predict what
the customers’ expectations are based upon prior observed behavior. This complex effort is
essential to managing the customer experience effectively. However, strong customer relationships
are not built as a one-way street. Royal Bank believes that its competitive advantage lies in its
ability to optimize between the client’s needs and the bank’s objectives.
•
To facilitate that optimization, SMR&A at Royal Bank has grouped customers into four categories
according to its strategic objectives:
1. Retain existing profitable customers
2. Grow and strengthen customer relationships
3. Manage and control customer credit risk
4. Optimize costs
•
Customers are scored according to their profitability, credit risk profile, vulnerability to attrition,
and projected lifetime value. Then they are placed in one of 14 categories depending on their
scores across the bank’s four strategic objectives. Essentially, the scores assigned to customers drive
the CRM strategy creation within the bank, whereas the segment code serves as a proxy for the
client needs.

7. Analytical Techniques for CRM at Royal Bank

8. Overview of modeling & Decision making process at Royal Bank

9. Sample CRM Analytics reports

10. Benefits of CRM Analytics
• Get a real time view into sales, marketing and customer
service performance
• Create more accurate sales forecasts, and set quotas based
on fact not opinion
• Measure, manage and improve customer satisfaction
• Monitor lead conversion and web site metrics
• Eliminate multiple versions of the truth with a single
centralized repository
• Empower everyone with fingertip access to key sales,
service and marketing measures
• Gain visibility to from summary, down to the actual live
transaction.