Segmentation Applications in Banking - Data Mining Techniques in CRM: Inside Customer Segmentation - page 284

The profile of the revealed segments for the bank case examined here is
presented in a set of two tables. The first one summarizes the segments in terms
of behavioral information retrieved from the organization's data mart. The second
one summarizes the marketing research results and presents the estimated ''share
of wallet'', the satisfaction level, and the attrition risk for each segment. Finally,
an additional table of conclusions shows the specialized business and marketing
strategies designed for each specific segment.
The first table, Table 6.21, outlines the behavioral profile and the value rank
of the segments. Young active customers and borrowers-credit card users are
the largest segments, each containing about 30% of the ''Mass'' customers. The
young active customers segment is mainly composed of less valuable customers.
These customers are payrolled by the bank and make many transactions (mostly
withdrawals); however, their relationship with the bank is limited to a simple
savings account, suggesting that they probably have another bank as a main
financial partner. The borrowers-credit card users on the other hand are quite
profitable and occupy the highest-value rank position. The full relationship segment
accounts for 23% of the ''Mass'' customer base and it also has a top-value rank.
Unlike young employees who seem to be new customers not tied to the bank,
this segment includes customers with a more established relationship. They have
average savings balances and many of them also have a mortgage loan from the
bank. The depositors-investors segment is the smallest one with about 20% of
the customers and a medium-value index. As described earlier and as implied
by the assigned name, it includes customers with a rather conservative portfolio
comprising deposits and low-risk investments. They prefer the manual, traditional
channels over alternative ones.
The second table, Table 6.22, presents the main marketing research findings
on each segment in terms of satisfaction, risk of defection, and ''share of wallet.''
As expected, the full relationship customers have the highest share of their money
with the bank in contrast to the young active customers, who seem to spread their
wallet among different banks. The other two segments are average with respect
to their ''share of wallet.'' In terms of attrition risk, borrowers-credit card users
appear to have the highest probability to churn and switch to competitors, maybe
due to their relatively low satisfaction level. Moreover, because of the nature of
their products, they probably tend to continuously assess their received benefits in
a constant search of the market for better offers and terms that can entice them
to move to the competition. At the other end are the depositors-investors and the
young active customers. They seem quite settled and satisfied with the services
offered and show no intention to churn. In the case of new payroll customers,
their loyalty is easily explained by the type of relationship they have with the bank.
They receive their salary there, so it is quite difficult to migrate to a competitor.
The challenge and opportunity in their case is to further develop them as good