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CRM at Capital One

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Case Analysis: The attached article is about 18 pages + appendix.

The analysis is based on the article "Customer Relationships Management at Capital One"

1. How does IBS create a competitive advantage for Capital One?
2. Is Capital One's IBS sustainable?

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The solution discusses the Customer Relationship Management at Capital One.

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How does IBS create a competitive advantage for Capital One?

IBS creates a competitive advantage by narrowing sectors for Capital One to use in its marketing of its various credit card products. The system is complex but also simple at the same time. IBS assists Capital One on sending the right products to the right consumers. The products and/or promotions are sent out and tracked. The tracking allows the company to know which demographic is responding and which demographic is not. This helps the business with its competitive advantage.

In addition to the above factor, the company also uses segmentation strategies in its business practices. This function divides the potential client base into high risk and low risk categories. The higher risk clients will pay a higher interest rate and the lower risk clients will be rewarded for their low risk status by being awarded a lower interest rate. With high risk comes profits in the form of higher interest payments and with low risk come lower interest payments but potentially a high profit from the monthly interest payments that are practically guaranteed from the low risk client.

The company tries to maintain its dormant customers through an alert system. The system alerts the company when an account has ...

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Jo Ann Prevetti, MBA, PhD (IP)
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  • Bachelor of Science in Paralegal Studies, Kaplan College
  • Business Diploma, Katharine Gibbs Business College for Women
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