Adkit, an international research firm, just sent me their insights into customer segmentation in retail banking. It’s an interesting report summarised in a 21-slide presentation.
The main results show that most banks are narrowing down to three or four key customer segments.
In the UK, we normally call these oranges, lemons, apples and pears. Apples are mainstream customers; lemons are students and the underbanked; pears are high net worth and mass affluent; and oranges are the die-hard oldies, retired and others with wealth but little income.
Service levels vary between these segments, with the pears getting ultraserivce and the lemons shown the door or, in RBS’s case, charged for using ATMs.
The main segmentation methods are based upon Assets & Liabilities, Profitability, Life Stage and the Equipment Rate (depth of relationship, number of product holdings, etc). That’s consistent with the way everyone used to segment and hasn’t changed much in over two decades, except for smartness of the tech used for granularity of such segmentation.
Anyways, may be worth a read if you’re interested.