Aspen Case Study

Alpen Bank, a large and prestigious bank based on Romania has an affluent clientele. The company has been doing well and expanding in new locations such as Bucharest.  Gregory Carle, the country manager of Alpen Bank was figuring ways to increase profits for the company and had an idea that could increase said profits by 5 million euros by two years. His idea was to introduce a credit card line with the bank for the customers. After doing much research with the Romanian population it looked like the target market for the new credit cards would to maintain it with the affluent customers only. This is because of several factors such as; middle class customers are more likely to pay in cash rather than using cards, not all of the regular customers would be qualified for the cards, their net incomes were less than 500 euros per month, etc. Most of the profit from credit cards would come from the annual fees as well as interest received from late payments and interchange. Many of the regular customers would be deterred by these factors and may not want a credit card from this bank or in general.

Carle also had to figure out how to get customers interested in the credit cards and there are different methods of customer acquisition;  direct mail, take one, FSI’s, direct sales, and branch cross-sell. Table 1 shows the break-even point and the time it takes to reach that point at all the different scenarios of targeting just affluent customers and/or all customers with the different methods of customer acquisition.