Segmentation Applications in Banking - Data Mining Techniques in CRM: Inside Customer Segmentation - page 263

Marketing Tips
• Offering of incentives to start using their card.
• Since inactivity is usually the threshold of attrition, these customers should be
given special attention, especially if they were high-value customers in the past.
• They may also hold competing credit cards and use them as their main cards;
thus suitable candidates for a balance transfer offer and for inclusion in an
''acquisition'' campaign.
Segment 6: One-Off/Occasional Buyers
Behavioral Profile
• Increased purchases, including almost exclusively one-off purchases.
• High-value but infrequent purchase transactions: their purchase frequency is
relatively low; however, they have the largest average amount per purchase
transaction.
• Moderate balances and credit limit usage.
• They present a transactor behavior.
Segment Size
11%
Marketing Tips
Suitable candidates for product switch to the type of card that matches their
purchasing preferences as revealed in the segmentation of purchasing habits.
THE CREDIT CARD CASE STUDY: A SUMMARY
The objective of a bank was to segment its consumer credit card holders according
to their usage behaviors. The approach followed included a two-fold segmentation.
The first segmentation grouped customers according to their purchasing habits and
the product/services they tended to buy. The segmentation population included
only active consumer customers with substantial purchases during the period
examined. A high level of the merchant categorization scheme was selected for the
analysis and customers were grouped according to their relative spending in these
categories. The application of a clustering model revealed distinct customer groups
with similar purchasing patterns. The bank's plans included using the segmentation
information to provide customized offers and incentives and tailored card types
that would better match the different habits of each customer group.