Royal Bank of Canada: Creating Profitable Relations with Small Business Clients

Royal Bank of Canada or RBC, Canada's largest financial services group, is at the forefront of customer profitability analysis. The case illustrates how RBC uses customer profitability data to identify profit opportunities and make strategic decisions about its customer mix. In particular, it illustrates how the new customer-level information enabled RBC to recognize the untapped profit potential of its small business client portfolio.

The purpose of this case is to illustrate how financial institutions like RBC can use customer profitability analysis to identify and enhance the profit potential of its various customer segments. The case describes the elements of RBC's customer value metric and how the bank reaped the benefits from targeted sales and marketing efforts informed by the customer-focused profitability analysis.