How profitable is a bank customer - An analysis of customer segmentation and its profitability

Exposé Écrit pour un Séminaire / Cours , 2012 , 20 Pages , Note: 1,3

Gestion d'entreprise - Banque, Bourse, Assurance

Haben Sie sich jemals gefragt wie profitabel einzelne Bankkunden sind? Diese Seminararbeit gibt ihnen einen Überblick über die gängigsten Methoden zur Profitabilitätsanalyse. Inhalt ist die Analyse von Profitabilitätsquellen, die richtige Einteilung von Kunden in unterschiedliche Segmente, unterschiedliche key ratios die bei der Analyse der Profitabilität helfen. Ebenfalls gibt es eine Einführung der wichtigsten Finanzkennzahlen in diesem Gebiet. Als letzten Teil, werden Sie lernen welche Möglichkeiten es gibt um Kunden profitabler zu machen bzw. unprofitable Kunden, möglichst leicht und ohne großes öffentliches Interesse, loszuwerden.

This paper gives an overview of the most important points which have to be taken into consideration when analyzing the customer profitability. One will see different methods and key ratios which are used to get an overview of the customer management. Furthermore, one sees the importance of a good customer segmentation system. Additionally, there is also a focus on the problems which a bank has to face when dealing with unprofitable customers.

Table of Contents

• 1. Introduction
• 2. Profit sources
• 3. Ways of customer segmentation
• 4. Measuring Customer Profitability
• 5. Financial Key ratios for Customer Relationship Management
• 6. What to do with unprofitable Customers
• 7. Conclusion

Objectives and Key Themes

This paper explores the essential factors involved in analyzing customer profitability for banks. The study provides a comprehensive overview of methods, key ratios, and segmentation strategies utilized for effective customer management.

• The paper examines different profit sources for banks, including interest income and fees.
• It explores the importance of customer segmentation in profitability analysis.
• The paper delves into methods for measuring customer profitability, including Customer Profitability Analysis (CPA) and Customer Lifetime Value (CLV).
• It highlights the significance of financial key ratios in customer relationship management.
• The paper discusses strategies for managing unprofitable customers.

Chapter Summaries

• Chapter 1: Introduction This chapter emphasizes the increased competition among banks and the growing importance of profitability analyses, particularly in light of the global financial crisis and ongoing European financial challenges. The paper outlines its structure, highlighting the different sections dedicated to analyzing profit sources, customer segmentation, profitability measurement, key ratios, and strategies for managing unprofitable customers.
• Chapter 2: Profit sources This chapter delves into the core business of banks, explaining how they generate profits through the sale of various financial products like loans, saving accounts, credit cards, and insurance. It also examines the critical balance between a bank's receivables (loans) and liabilities (deposit accounts) to ensure profitability and liquidity.
• Chapter 3: Ways of customer segmentation This chapter focuses on the importance of customer segmentation for banks. It emphasizes the distinction between retrospective and prospective segmentation, the former based on historical data and the latter designed to enhance client relationships. The chapter explores various segmentation criteria, including sales volume, profitability, demographics, and the impact of good segmentation on a bank's marketing strategy.
• Chapter 4: Measuring Customer Profitability This chapter delves into methods for calculating customer profitability, specifically highlighting Customer Profitability Analysis (CPA) for historical profitability assessment and Customer Lifetime Value (CLV) for future profitability projections. It also explains the role of various key ratios in gauging changes in customer management practices.
• Chapter 5: Financial Key ratios for Customer Relationship Management This chapter elaborates on financial key ratios, such as customer growth rate, cross-selling ratio, and cost-income ratio, which banks can utilize to enhance their customer relationship management efforts.
• Chapter 6: What to do with unprofitable Customers This chapter focuses on the challenges banks face with unprofitable customers. It explores strategies for making these customers more profitable or, if necessary, for gradually phasing them out of the customer base.

Keywords

Key terms and concepts discussed in this paper include customer profitability analysis, customer segmentation, profit sources, customer relationship management, financial key ratios, and strategies for managing unprofitable customers.

• Université: University of Innsbruck
• Note: 1,3
• Auteur: Oliver Baumgartner (Auteur)
• Année de publication: 2012
• Pages: 20
• N° de catalogue: V209182
• ISBN (ebook): 9783656373933
• ISBN (Livre): 9783656374176
• Langue: anglais
• mots-clé: Bankkunde, Profitabilität, profitability, customer segmentation, Kundensegmentierung, Segmentierung, Analyse, segmentation, Finanzkennzahlen