Customer Segmentation
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The goal of segmenting customers is to decide how to relate to customers in each segment in order to maximize the value of each customer to the business.
Types of Customer Segmentation in the industry : CLV Focused Customer Segmentation, Segment via Cluster Analysis, RFM (Recency, Frequency, Monetary ) Segmentation
Benefits for the company
Banks group their customers based on their behavior and common characteristics in order to address them appropriately.
Feasability
High
Type of expertise/ AI domain
Clustering Analysis, Machine Learning for sophisticated large amounts of data
Internal data required
Customer Profile, Purchase data, Customer Lifetime Value Calculations
Some of the various ways in which customer segmentation helps the banking institutions are –
– Identification of customers based on their profitability.
– Segmenting customers based on their usage of banking services.
– Strengthening relationships with their customers.
– Providing appropriate schemes and services that appeal to specific customers.
– Analyzing customer segments to implement and improve services.