Understanding the segmentation of banking customers

All of us have a range of relationships with banks. Let us take a moment to examine the nature of our relationships; metaphorically speaking.

The long-term sweetheart

This was probably the first bank account you opened or the account you have maintained for the longest period of time. While you may or may not treat this as your primary account, the timeline of your association makes your relationship emotional.

The casual fling

If you are like most people, the sole purpose of this account is transactional. You primarily use it to access your salary. You may or may not use other products and services offered by this bank but at the very least, you interact with them on a fairly regular basis. You may do your online shopping or impulse spending through this account.

The dependable partner

This is the bank where you have your high-value relationships. Through research and/or shopping around you have chosen them to be your personal, vehicle or home loan provider. They have multiple products-line relationships with you. You in turn have a long-term ongoing relationship with them.

The glamorous colleague

Again, if you are like most people, you probably have an account exclusively for your savings and investment needs. This may be linked to your trading/Demat account and may also have a median portion of your investment instruments like fixed or recurring deposits. This may or may not be the bank with whom; you have your high-value relationship.

The new kid on the block

This may be the flashy new bank whose interest rates, convenience or new-age-ness prompted you to engage with them. You may not be emotionally invested in this relationship and are still at that juncture where you are getting to know them better and they; you.

The dreaded Ex

You’ve probably had a run-in with such banks. Terrible service, lethargic staff, dated infrastructure, unhelpful customer service… the litany of deficiencies was so long that you to have nothing to do with them anymore. Your emotional involvement with them probably borders on hatred. Or worse; apathy!

Now take a moment to flip these observations on their head and view them from the perspective of the banks. Viola! You’ve arrived at the logic of the perfect way to segment bank audiences by usage patterns. The relationship you have with your bank falls into one of the following buckets:
Non-Customer
Low-value Customer
Medium-value Customer
High-value Customer
Ex-Customer

More on the sub-categories another time.