Capital One

CRM ASSIGNMENT

Abid Mushki 138

Submitted to : Dr.Abha Wankhede
Q1. How would you define CRM briefly?

Customer relationship management (CRM) is a phenomenon for managing all your company
relationships and interactions with customers and potential customers. A CRM system helps
companies stay connected to customers, streamline processes, and improve profitability. When
people talk about CRM, they are usually referring to a CRM system, a tool that helps with contact
management, sales management, productivity, and more.
A CRM solution helps you focus on your organization’s relationships with individual people
including customers, service users, colleagues, or suppliers — throughout your lifecycle with
them, including finding new customers, winning their business, and providing support and
additional services throughout the relationship

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. The company is able to propose customized products which ideally correspond to needs
and to the customer’s risk profile.

Q2. If it is to be more than concept, CRM needs to be translated into

specific activities and processes of Capital One. Do they differ according to
life cycle stages of a customer?

Capital One supports the entire life cycle including collections from accounts in the arrears, fraud
defence and protection activities and the recovery of previously charged off debt. The functional
structure of the operations division at Capital One is an illustration enough to judge the nature of
CRM activities and processes.

The four main operational divisions are: Operations processing, Sales, Customer relations
Collections. The activities in customer relations, sales and collection are reminiscent of the
customer life cycle. Customer relations handles active accounts and makes calculated attempts at
cross selling (at the right moment) with the help of an automated tool called SALSA.

M&A department works actively on new customer acquisition and management through new
product development and testing, which forms the backbone of Capital One’s IBS strategy. Sales
activities are divided into 4 major components:(i) inbound ( ii) outbound (iii) retention, (iv) new
business.

The collection division deals with mostly mature and declining accounts through the
departments of Payment Assistance, Fraud Management and Recoveries. For example,
Payment Assistance helps laggard customers to revive their account or ease out their
payment schedules by reworking terms of payment.
Q3. What can be learned from the CRM practice of Capital One?

CRM played a huge role in turning around Capital One. The CRM was put into use efficiently and
translated into strategy, design, good human resource and hiring and efficient marketing processes.
Different departments work in an integrated fashion towards understanding and satisfying a
customer. By providing and recognizing that every customer needed a tailor-made product Capital
One was successful in increasing stock prices by a thousand percent in 6 years. Capital One went
against the “one size fits all” norm of the industry and offered customized solutions.

Operation: “Big Yellow Square” (BYS) indicates that Capital One’s view on operating a call
centre differs from most other organizations particularly in the way it weights " associate
satisfaction”, which is equal important as “service quality” and “cost efficiency”. People are
trained in one or more disciplines for handling sudden demands and services.

Information Technology (IT): It was used to maintain real time data of each customer so that each
employee can deal with customer at any time without any repeat propositions. Automated decision
algorithms have helped in making quick and decision and alarming future fraud probability.

Human Resources: All associates are evaluated every six months, with half of the evaluation being
based on targeted achievements and the other half based on Capital One’s defined core
competencies. Incentives are an important part of the compensation package for all Capital One
associates.

Customization and Customer, paying attention on these two aspects they changed the way they
were performing. A satisfied customer by means of one or the other customized service was their
objective of working which they implemented successfully using CRM.
Capital One used updated IT infrastructure to capture customer insights and made utmost use of
analytics.

Q4. It is often claimed that CRM can lead to competitive advantage. In

your opinion has it created competitive advantage for Capital One? If so,
How?

Yes, CRM can lead to competitive advantage for Capital One Identifying their core consumer
types and adopting an Information-Based Strategy (IBS), the company used key customer data to
gain a deeper understanding of its audience.