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Citi vs Egg: A lesson in capital structure, experience design, and reputation

Citibank tried several years ago to integrate Egg, a UK-based online-only bank, into the Citi way. 

Disaster ensued.

Luckily for us, the whole story raises profound questions about the role of customer experience in an M&A strategy. 

At the root of the problem: Citi "fired" undervalued customers. Value, of course, defined by Citi. In short, they did what CRM gurus have been promoting for years: dividing your customers by the value they represent to you, and then adjusting your corporate processes to be cost-effective within those profit-bands. Any customers for which you make insufficient profits are targets for firing. 

This is a perfect example of how CEM differs from CRM. The scope and scale of the branding, process design, and technology integration into customers' lives are completely different. This is where a change in scope becomes a change in kind. To see what I mean, click here and enjoy the case study!


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