Practice papers: The evolution of segmentation methods in financial services: Where next?
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Suzanne Soper is the Director of Financial Services, CACI Ltd. CACI is a leading high tech marketing and planning company in the UK with a wide range of services including classification systems, lifestyle databases, marketing database software, consultancy and modelling expertise. With 30 years experience in the direct marketing industry, CACI leads the way with products such as: the award winning online targeting tool, eTypes, LifestylesUK, PeopleUK, ACORN and Financial ACORN and InSite, CACI’s customer and market analysis tool. A prestigious client list includes: Halifax, AXA Group, Friends Provident, Healey & Baker, House of Fraser, Peugeot and WHSmith. Suzanne has recently returned to CACI to lead the Financial Services Division (she was previously with them for four years). In the interim period she was employed by Morgan Stanley Card Services as Global Database Director.
Abstract Over the last few years, the financial services market has seen a proliferation of new players and new channels. Customers have increased expectations of being offered the right products, at the right time and for the right reasons. Demographics and affluence have always been the backbone of segmentation tools, but is this still sufficient to meet the challenges that today’s marketers face? This paper is a review of how customer segmentation has evolved within the financial services market and the corresponding demand for consumer information. It assesses whether today’s segmentation tools remain sufficiently innovative to provide marketers with the information they require in order to maintain competitive advantage in a highly competitive marketplace. Keywords
Suzanne Soper Director of Financial Services CACI Limited, CACI House, Kensington Village, Avonmore Road, London W14 8TS, UK Tel: +44 (0)20 7605 6133; Fax: +44 (0)20 7603 5862; e-mail: [email protected]
Financial services, segmentation, attitudes, lifestages, demographics
The financial services market has changed enormously over the last decade. Consolidation and a strategy focused on acquisition rather than organic growth together with a proliferation of new players and new channels have altered the dynamics of the marketplace. The effect of increased competition and increased choice has raised customers’ expectations of being offered the right products, at the right time and for the right reasons. Despite the growing volumes of individual level data available, segmentation techniques remain essential in
# Henry Stewart Publications 1363-0539 (2002)
Vol. 7, 1, 67–74
the financial marketplace to help organisations tailor their offerings effectively. Two key factors drive this need for segmentation versus individual data. First, the necessary data for sophisticated targeting are seldom available at individual level across the entire customer file, and require modelling to infer attributes. Secondly, the cost of acquiring accurate primary customer data can be prohibitive, if they are available at all. Segmentation systems based on a combination of actual and inferred characteristics prov
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