2. Does it appear that the online customers add to Dakota’s bottom line? Compare the preliminary data to support your conclusion. Support your analysis using numbers given in the case.
Though it may seem that online customers have added to Dakota’s bottom line from 2000 to 2001 for non-interest income, $768M to $786M, respectively, the expenses have also increased from $1,081M to $1,112M. Therefore, net operating income has actually decreased from $366M to $349M. Online customers have not added to Dakota’s bottom line.
3. Is the price of acquiring a new online customer worth the cost? Provide documentation using numbers in the case.
The price of acquiring a new online customer is not worth the cost to Dakota. The campaign cost $2M for the 24,000 customers that were acquired during the campaign period of 6 months. Each customer cost $83.33 and each customer brought in revenue of $12.04 (total revenues/month multiplied by 6 for the campaign period divided by 24,000 customers acquired during this same period). Expenses far exceed revenue.
4. Should Dakota keep promoting online banking?
Dakota should not keep promoting online banking to the extent that they have been doing it now. They should take a different approach that will not wipe out their