Capital one

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Customer Relationship Management
at Capital One
Capital One is an American financial services company, which have about 45 millions of clients worldwide. The group is also present in the UK. Capital One proposes its customers opening accounts with credit cards, and other financial products like insurance. The company also proposes loans.

How would you define CRM as implemented at CapitalOne ?
At Capital One, CRM is present in all the company’s activities and services. The goal is to develop valued relationships with the customers and handle the risk, understanding intimately the consumer. Thanks to that, the company is able to propose customized products which ideally correspond to needs and to the customer’s risk profile.
The company uses IBS to implement her CRM: ISB permitsto establish large quantities of data about its customers, to meet the goal mentioned above. Information is collected thanks to customers’ transactions.
Then, when the data are collected, the company executes its “Test & Learn” strategy. This is testing the financial activity on a sample of consumers thanks to direct marketing (mailing for example), then extrapolating it on a larger scale. Thispermits first, to know the customer’s reaction for each action put in place, then, thanks to this, to develop new ideas and products and to target the consumers.

What are key CRM activities and processes at Capital One?
Key CRM Activities and processes of Capital One
Analytical CRM
Operational CRM
HR & Organization
Process of segmentation : types of risk profiles = 2 segments(transactors & revolvers) + 2 sub-segments (high risk revolvers & low risk revolvers) => C.O offers them a lower APR to attract them
Other segment : customers who have Capital One’s credit card for first card => relatively higher risk so not well-treated by other banks so C.O offers them an initial higher APR, with annual fee and lower credit line.
Retention activities : to avoid inactivecustomers and attrition, C.O treats the low risk revolvers as well as any other customer segment. C.O was the best available offer when they joined, so it must be always the best offer. This strategy based on incentives permits to the company retaining its customers.

Alignment of Operations department with customer requirements
Big Yellow Square model : low cost efficiency, high quality customerservice (for each customer, whatever is his profitability), flexibility (moving jobs to cope with the peaks) and associate satisfaction
SALSA system : identifies suitable products to the customer who is calling and avoids offering the same product twice ; suggests how to react to specific customer requests thanks to data
Competition is encouraged between individual associates to increaseemployees’ motivation
Adaptability to customers’ situation like illness, unemployment, …
Fraud : customers victims of fraud are very often called by the fraud customer service to be aware about the fraud
Great co-operation between M&A and Operations

Internal prospect pool management and solicitation process : permits to access easily to the customers behavior and lifestyle data : an in-house databasetargets and selects customer audiences and matches products according to the prospects’ profiles
Direct marketing : mail campaigns to target new customers
Record of all interactions with customers thanks to the account management system : this system creates the customer profile to differentiate offers according to customer preferences
Computer Telephony Integration : assures efficient customerhandling and high quality service
Internet system (management of the accounts and application online) and Intranet system (accessible information to the company and to all associates)

Selection process influences the overall customer strategy : associates are hired on the same criteria, for their competencies
A specific training is offered for new associates, with also a learning centre...