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- Developing new products and product bundles that would match the profile
of each segment.
Analyze the competition per segment: Themarketers' intentionwas to study
the organization's strengths and weaknesses, compared to the competition, and
reveal the specific threats and opportunities in each segment.
Analyze each segment 's present and potential value: Each segment does
not provide the same profit to the organization. The project team intended to
evaluate each segment's present and future/potential value in order to assess its
importance and incorporate a more effective allocation of resources.
Analyze the ''share of wallet'' per segment: The ''share of wallet'' is the
proportion of the customer's total money managed by the bank. Typically, an
increase of the ''share of wallet'' is less costly and easier than an increase of the
market share by acquiring new customers. The bank's objective was to study
and assess the ''share of wallet'' of each segment through relevant metrics (such
as the cross-selling index, defined as the average number of products held)
and specialized market research surveys. The findings and the insight into the
needs of each segment would then be used to develop efficient strategies for an
increase in the ''share of wallet'' of existing customers.
Measure the level of satisfaction and identify themost important satisfac-
tion drivers of each segment: Customers do not have the same expectations
from their bank and their satisfaction is affected by a wide variety of factors.
A customer satisfaction survey is typically conducted to measure the level of
satisfaction and reveal the drivers that have an impact on satisfaction. The
adopted approach included a separate satisfaction analysis for each segment to
identify the particular drivers with increased importance.
Conclusively, the end goal was the creation of an effective segmentation
scheme that would allow the improvement of the relationship with customers and
an increase in their level of satisfaction through better coverage of their needs.
Furthermore, identification of the customer typologies would also support the
bank's efforts to increase its market share as well as the ''share of wallet'' of existing
customers, through the development of targeted incentives and product offerings
that could persuade more customers to transfer from the competition.
The bank initially focused on its consumer customers, excluding corporate,
wholesale, and private banking customers from the particular analysis. The project
involved the following steps:
1. Value-based segmentation according to marginal revenue.
2. Separation of customers into broad and clearly differentiated groups (core
segments) such as ''Affluent,''
''Mass,''
''Business,''
''Inactive,'' and so on,
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