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Published by:
INSEAD (2006)
12 pages
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A retail bank is considering a strategy to improve branch performance. Central to the strategy is a recent study of profitability of three retail products: (1) current accounts; (2) credit cards; and (3) mortgages. The strategy involves giving branch managers incentives to sell profitable products. A senior bank manager evaluates the product-profitability-based strategy in light of recent statistics on major variations in profitability of customers (these statistics are included in the database provided with the case). The case aims to: (1) illustrate the dangers of product-focused strategies that ignore customer value; (2) demonstrate the need for customer-profitability analysis; (3) consider the difference between average customers and marginal customers; (4) illustrate the sources of variations in customer profitability; (5) discuss the actions to manage customer portfolios; and (6) show that customer-profitability analysis can serve as an excellent communication tool.


Customer profitability; Product profitability; Customer Relationship Management (CRM); Retail banking
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Awards, prizes & competitions

2009 - ecch European Case Awards - category winner
Classic case collection - Finance, Accounting and Control

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