How segmentation fosters an effective marketing strategy for banks

How segmentation fosters an effective marketing strategy for banks

By Pamela Reich

Are your customers and prospects more interested in feature-rich products, the best prices, or the lowest fees? Or are they more motivated by high quality personalized service?

The truth is, it’s not a scenario of either one. One size is certainly not the right fit for everyone when it comes to factors influencing customer satisfaction. While all customers ultimately care about both their bank’s products and services, smart marketers need to consider segmentation how – focusing on different aspects of your offering to different groups of customers. – will work to optimize brand loyalty and gain the trust of your customers.

As an illustration, let’s take a look at three examples of personas within your database. You may have applied data intelligence to identify each customer or prospect with a specific persona. Or you can generalize the types of personas that represent a range of demographic, psychographic, banking, and other behaviors.

In either case, the marketing strategies targeting each of these personas are designed to achieve the greatest success in retention and customer acquisition:

Frugal Franny seeks the best offer from her bank. She cares about minimizing fees, getting the highest rates on her well-protected savings, and getting the lowest rates on her credit cards and loans. She seeks convenient self-service banking options and is a heavy user of mobile banking for her transactions and account information. She rarely has one-on-one contact with a banker and, aside from the rare problem that may arise, she is happy to “go it alone” for all of her financial needs.

Marketing and retention strategies:

  • Make sure your website is easily navigable to highlight the benefits of the product.
  • Use in-app email and messaging to reach this target audience with special rate offers every now and then.
  • Be very clear in the account opening documents about account fees and the options for waiving them.
  • Continue to promote the benefits of digital banking and special digital offers to build loyalty and strengthen relationships.

Needy Nelson wants to feel valued and well served by his bank. He gets a phone call from his banker, someone who knows him, just to check in. He needs to feel that if he has a question or a problem, he can quickly reach someone who can help him. He is less concerned with fees and rates. That is, he is willing to pay a little more for the high level of special service he demands. He has a strong relationship with the bank but would easily default if he didn’t get the treatment he seeks.

Marketing and retention strategies:

  • Stratify service levels by relationship and personality to ensure this group receives personalized service.
  • Establish specific service level indicators so that you can measure the effectiveness of your service offering. For example, can you promise a reminder within 24 hours?
  • Assign individuals or teams (personal bankers) responsible for meeting the demanding needs of this segment.
  • Provide your personal bankers with business and product training to connect both outbound and inbound calls with their customers. Facilitate communication from a client to his banker.
  • In messaging and across all touchpoints, build trust and loyalty by conveying appreciation for the relationship with that customer.

Balanced Barbara is a typical consumer who wants her bank to meet a combination of product and service requirements. While recognizing that many banking products are similar, she looks for competitive prices and features in her accounts and would be open to learning more about new product opportunities. She should also be confident in the bank’s ability to provide financial advice and help when needed.

Marketing and retention strategies:

  • From the initial account opening process to periodic cross-selling initiatives, promote the range of benefits available across products and services to build and maintain a strong relationship.
  • Share evidence of your bank’s commitment to service.
  • Continue to promote the range of convenient banking options – “do your banking your way”.
  • Balance product or service specific messages with a strong brand promise, which will help boost satisfaction levels and control attrition in a competitive market.

The bottom line: Product and service as the engines of customer satisfaction are certainly not mutually exclusive. Using segmentation to target marketing strategies, rather than employing a single holistic approach, will dramatically improve the effectiveness of your marketing spend to achieve higher levels of brand loyalty and more profitable relationships.

Pamela Reich is Director of Communications Strategy at MKP communications, Inc., a New York-based marketing communications agency specializing in communications strategy for the financial services industry.

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