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However, in many instances, a customer will prosper exponentially and be more valuable to the bank in future years than in the present or near-future. It makes sense to factor this profitability into account when analyzing the customer’s overall worth to the bank and servicing the customer.
3. In order to be successful, RBC needs to compute lifetime values at both the segment and the individual customer level for strategy formulation and execution. RBC’s original profitability model placed customers into three buckets – A customers made the most profit, B customers made some profit, and C customers broke even or lost money...
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