Segmentation Applications in Banking - Data Mining Techniques in CRM: Inside Customer Segmentation - page 269

Profitability Curve

120%

100%

80%

60%

40%

20%

0%

0 1 2 3 4 5 6 7 8 9 10

Cumulative Population

Figure 6.17 The profitability curve of the value-based segments.

Table 6.13 Bank's core segments.

Business rule Core segment Percentage Segmentation criteria

1 Affluent 2 Total assets ≥ $100 000

2 Affluent Mass 3 Total assets ≥ $50 000 and < $100 000

3 Business Mass 11 Business product ownership

4 Pure Mass 72 Rest of customers

5 Inactive Mass 12 Maximum total balances in last six

months $50 and total number of

transactions in last six months

<

= 0

The ''Affluent'' segment included the top customers with the highest assets
(over $100 000). Customers with assets between $50 000 and $100 000 comprised
the ''Affluent Mass'' segment. Customers with a business loan were assigned to the
''Business Mass'' segment. Those customers with no transactions at all during
the last six months and with low total balances (less than $50) were flagged as
''Inactive'' and were grouped in the ''Inactive Mass'' segment. Finally, the rest of
the customers that did not fall into any of these categories comprised the ''Pure
Mass'' segment.