What is customer segmentation in banking?
Customer segmentation is the approach of dividing a large and diverse customer base into smaller groups of related customers that are similar in certain ways and relevant to the marketing of a bank’s products and services. Some basic segmentation criteria include geography, income and spending habits. Through customer segmentation, banks can get to know their customers on a more personal level and offer them more tailored products and services.
What are the business benefits of customer segmentation in banking?
Customer segmentation is often a top marketing priority for banks, and for good reason. Because segmentation solutions help banks group customers by behavior, they can offer more tailored products and services. Moreover, by better understanding customer preferences, marketers can maximize cross and up-selling opportunities and encourage customers to explore related services. Other ways that segmentation can help banks:
- Decide on the right kind of promotional content to send each customer
- Select the right marketing channels for the right audience
- Identify new and profitable segments and launch innovative products and services