How segmentation drives an effective marketing strategy for banks

By Pamela Reich

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

The truth is, it’s not an either/or scenario. One size certainly does not fit all when it comes to factors influencing customer satisfaction. While all customers ultimately care about their bank’s products and services, smart marketers need to think about how segmentation, i.e. emphasizing different aspects of your offers for different customer groups, will help to optimize brand loyalty and gain the trust of your customers.

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

Either way, marketing strategies targeting each of these personalities are designed to achieve the greatest success in customer retention and acquisition:

Frugal Franny seeks the best offer from her bank. She cares about minimizing fees, getting the highest rates on her well-guarded savings, and getting the lowest rates on her credit cards and loans. She looks for 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 issues that may arise, she is happy to “go it alone” for all of her financial needs.

Marketing and loyalty strategies:

  • Make sure your website is easily navigable to highlight product benefits.
  • Use emails and in-app messaging to reach this target audience with special pricing offers from time to time.
  • Be very clear in account opening documents about account fees and waivers.
  • Continue to promote the benefits of digital banking and digital specials to build loyalty and strengthen relationships.

Needy Nelson wants to feel valued and well served by his bank. He gladly welcomes a phone call from his banker – someone who knows him – just to check. 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 about fees and tariffs. That is, he is willing to pay a little more to get 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 demands.

Marketing and loyalty strategies:

  • Stratify service levels by relationship and personality to ensure this group receives personalized service.
  • Establish specific service level indicators to measure the effectiveness of your service offering. For example, can you promise a callback within 24 hours?
  • Assign individuals or teams (personal bankers) responsible for meeting the demanding needs of this segment.
  • Provide your personal bankers with sales and product training to build inbound and outbound connections with their customers. Facilitate a customer’s access to their banker.
  • In messaging and across all touchpoints, build trust and loyalty by conveying your 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 acknowledging that many banking products are similar, she looks for competitive pricing and features in her accounts and would be open to learning about new product opportunities. She must also have confidence in the bank’s ability to provide financial advice and assistance when needed.

Marketing and loyalty strategies:

  • From the initial account opening process to periodic cross-selling initiatives, promote the range of benefits available across all 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 – “bank your way”.
  • Balance the specific messaging of a product or service 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 drivers of customer satisfaction are certainly not mutually exclusive. Using segmentation to target marketing strategies, rather than employing a single all-encompassing 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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