How Segmentation Drives 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 driven more by high-quality personal service?

Truth is, it’s not an either/or scenario. One size certainly does not fit all when it comes to the factors influencing customer satisfaction. While all customers ultimately care about both products and service from their bank, smart marketers should consider how segmentation—emphasis on different aspects of your offer to different groups of customers—will work to optimize brand loyalty and earn your customers’ trust.

By way of illustration, let’s examine three sample personas within your base. You may have applied data intelligence to identify each customer or prospect with a specific persona. Or you may be generalizing the types of personas that represent a range of demographics, psychographics, banking and other behaviors.

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

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

Marketing and retention strategies:

  • Ensure your website is easily navigable to highlight product advantages.
  • Use email and in-app messaging to reach this target audience with special rate offers from time to time.
  • Be very clear in account-opening materials about account fees and the opportunities to waive them.
  • Continue to promote the benefits of digital banking and special digital offers to build loyalty and solidify relationships.

Needy Nelson wants to feel valued and well-served by his bank. He welcomes a phone call from his banker—someone who knows him—just to check in. He needs to feel that, should he have a question or problem, he can reach someone quickly who can help him. He is less concerned about fees and rates. That is, he’s willing to pay a little more to get the high level of special service he demands. He maintains a robust relationship with the bank but would easily defect if he did not receive the treatment he seeks.

Marketing and retention strategies:

  • Stratify service levels by relationship and persona to ensure this group receives personal service.
  • Establish specific service level indicators so you can measure the effectiveness of your service offer. For example, can you promise a call back within 24 hours?
  • Assign individuals or teams (personal bankers) responsible for serving the demanding needs of this segment.
  • Empower your personal bankers with sales and product training to connect both outbound and inbound with their customers. Make it easy for a customer to reach their banker.
  • In messaging and across all touchpoints, build confidence and loyalty by conveying appreciation for the relationship with this customer.

Balanced Barbara is a typical consumer who wants her bank to meet a combination of product and service requirements. While acknowledging that many bank products are similar, she hunts for competitive pricing and features in her accounts and would be open to knowing more about new product opportunities. She also needs to have confidence in the bank’s ability to provide financial guidance and help when needed.

Marketing and retention strategies:

  • From the initial account-opening process through periodic cross-sell initiatives, promote the range of available benefits across products and services to establish and maintain a solid relationship.
  • Share proof points about your bank’s commitment to service.
  • Continue to promote the range of convenient banking options—“bank your way.”
  • Balance specific product or service messaging with a strong brand promise, which will help strengthen satisfaction levels and control attrition in a competitive marketplace.

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 broad-based approach, will greatly enhance 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 communications strategy for the financial services industry.