Customer Segmentation Gives Competitive Edge to Credit Unions

Eric Gagliano, SVP, Marketmatch, Beavercreek, OH
January 24, 2007

The demands on credit union marketers are more challenging every day. Competition from banks and others is greater than ever, and marketing budgets are not necessarily growing with the increased competition.

To be successful, credit unions need to effectively stretch marketing dollars while maximizing member relationships, increasing wallet share and reducing attrition of the most profitable members. In other words, you must develop a segmentation strategy. “Segmentation,” is a daunting word for some marketers, but if broken down into simple steps, it is easily achievable for any credit union.

Good market segmentation will result in segment members who are similar across multiple measured variables within the segment, and as different as possible between the segments. Member markets can be segmented by the following principal characteristics:

Geographic (region, population density, size of metropolitan area, climate)

Demographic (age, gender, income, generation, education, marital status, social class, occupation)

Psychographic (lifestyle, activities, interests, values, opinions, perceptions, attitudes, personality)

Behavioral (usage rate, benefits sought, brand loyalty, price sensitivity, occasions, readiness to buy)

An institution will use each characteristic and set of data differently, depending on their strategic goals.

Whatever segmentation process or level of sophistication best fits your strategy, you will be able to deliver a message that is significantly more impactful and that will better differentiate your institution from the competition. You will also be able to provide more strategic offers to those members who are most likely to act upon them … ultimately extending your marketing dollars, increasing your share-of-wallet and reducing your attrition rate.

Don't miss this speaker's exciting presentation at the CUNA Marketing & Business Development Council Conference, March 14-17, 2007 in Las Vegas, NV. For more information about the conference, please click here.