Business to business: Lessons on segmentation and other issues from financial services markets
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Bryan Foss is Customer Loyalty Solutions Executive for IBM’s Global Financial Services Sector. His experiance in CRM is considerable. Prior to joining IBM in 1980, he held responsibility for marketing and financial systems in Nestle´ UK, and before that at Gateway Foodmarkets ( a major UK retailer). Brian has recently co-authored a book with Merlin Stone entitled ‘Successful CRM’ which is due to be published in July 2001.
Professor Merlin Stone is IBM Professor of Relationship Marketing, Bristol Business School; Executive Consultant, IBM Business Innovation Services, – Financial Services; Director QCi Ltd. and Swallow Information Systems Ltd.
Abstract The aim of this paper is to provide business-to-customer financial services companies with an insight into the relevance of business-to-business segmentation for their companies. The whole area of understanding customers is being turned upside down by rapidly developing new patterns of intermediation, so almost paradoxically there is a much stronger focus today on ‘doing what works’ and ‘doing what is profitable’, rather than trying to optimise. Customers, whether final or intermediary, are simply changing too rapidly to permit the old stable analyses. Keywords CRM, business-to-businss (B2B), value chain, supply chain, segmentation, intermediaries
INTRODUCTION
Bryan Foss Customer Loyalty Solutions Marketing, IBM Global Financial Services Sector, IBM UK Ltd, 17 Addiscombe Road, Croydon CR9 6HS, UK Tel: +44 (0)20 8681 4402; fax: +44 (0)20 8681 4307; e-mail: [email protected]
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Although much of the work in financial services marketing has focused on the final consumer, most of the value in retail financial services is intermediated. This means that companies that develop a better approach to understanding and managing their intermediaries are likely to make more profit from their marketing. However, most such companies’ understanding of segmentation is based on consumer segmentation. This is partly because so many professional direct marketers now work in the marketing departments of these companies. The objective of this paper is to provide business-to-consumer (B2C) financial services companies with an insight into the
Journal of Financial Services Marketing
Vol. 5, 4, 308–313
relevance of business-to-business (B2B) segmentation for their companies. The whole area of understanding customers is being turned upside down by rapidly developing new patterns of intermediation, so almost paradoxically there is a much stronger focus today on ‘doing what works’ and ‘doing what is profitable’, rather than trying to optimise. Customers, whether final or intermediary, are simply changing too rapidly to permit the old stable analyses. WHY IS SEGMENTATION AND TARGETING IMPORTANT IN BOTH B2C AND B2B? The answer to this question is fairly straightforward. Customer value varies —
# Henry Stewart Publications 1363-0539 (2001)
Lessons on segmentation and other issues from financial services markets
between customers and for individual customers over time. Because marke
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