Bank Solutions Group

Marketing and Segmentation Sample Project

​Establish a Customer Segmentation and Profitability System for a Community Bank

BSG consultants have worked  with several Community Banks to help select and install practical and actionable customer segmentation and profitability systems.  On a recent engagement, bank management was concerned that while overall account growth had increased substantially as national banks, in its footprint, imposed significant new fees on both consumer and small business checking account customers they deemed “unprofitable.” Their concern was well-founded, as BSG predicts that the portion of so-called “free-checking” customers at large banks will drop from present levels of more than 40% to less than 30% within three years, down from a high of nearly 60% just a few years ago.  BSG worked closely with the bank’s marketing, product, channel management and IT staff to select and install a segmentation system. Subsequently, BSG consultants worked closely with the bank’s finance and product areas to develop a customer profitability model.  The resulting data showed over 80% of retail bank profitability came from less than 15% of their customers.  BSG was asked to assist the bank in developing a tactical plan for targeting profitable customer segments, supported by an innovative cross-sell and up-sell program and a disciplined strategy for reducing the cost of serving less profitable segments.

Develop Credit Card Segmentation Scheme for a large Bank Issuer

BSG consultants were brought in by management to help improve the growth and profitability of their consumer and small business credit card business.  BSG’s assessment determined that while the bank had a well-developed overall segmentation scheme, it was not designed to be used for managing the credit card business.  BSG consultants worked with the bank’s internal analytics experts to adapt the segmentation scheme so it could be used to identify card product penetration by segment and to highlight segments that were underpenetrated relative to the bank’s competitors. This information served as the foundation for redesigning and repositioning the bank’s credit card product line to fortress well-penetrated, profitable segments and target attractive, underpenetrated segments for growth.

Small Business and Middle Market Segmentation

BSG consultants recently assisted a large Canadian financial institution in sizing and segmenting the national small business and middle corporate market, and to develop a corresponding analysis of their customer base to determine penetration by segment.  BSG was also asked to provide insights regarding the financial services needs of the various segments so they could be prioritized and targeted appropriately.  BSG engaged a specialty firm to conduct primary research study and combined the results with its own experience and analysis to provide the client bank with key conclusions and recommendations regarding the most significant opportunities.

Wealth Management Segmentation

A client bank engaged BSG consultants to assess its private  bank, which was underperforming.  BSG worked closely with the bank’s marketing group to analyze its customer base against criteria for wealth management and private banking segments.  The analysis determined that the bank was over-penetrated in the mass affluent segment, but did not have a program in place to properly serve this segment. BSG’s wealth management experts assisted in developing and implementing a more effective mass market service platform.