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Benefit segmentation by factor analysis: an improved method of targeting customers for financial services

Benefit segmentation by factor analysis: an improved method of targeting customers for financial... Banks and building societies typically focus on geographic, demographic, socio‐economic, and psychological characteristics to segment the market for financial services, although these are not efficient predictors of future buying behaviour. To correct this shortcoming, benefit segmentation by factor analysis has been used for the first time to group building society customers in relation to their particular attitudes and behaviour. Identifies eight benefits (listed in order of their popularity): personal service, investment, limited banking, accessible cash, cash card, advice, money management, and full banking. Incongruities between certain of the benefits, and the differing customer profiles for each benefit segment were analysed. Makes suggestions on how building societies and banks could use benefit segmentation to improve the effectiveness and efficiency of their marketing strategies. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Bank Marketing Emerald Publishing

Benefit segmentation by factor analysis: an improved method of targeting customers for financial services

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Publisher
Emerald Publishing
Copyright
Copyright © 1996 MCB UP Ltd. All rights reserved.
ISSN
0265-2323
DOI
10.1108/02652329610113126
Publisher site
See Article on Publisher Site

Abstract

Banks and building societies typically focus on geographic, demographic, socio‐economic, and psychological characteristics to segment the market for financial services, although these are not efficient predictors of future buying behaviour. To correct this shortcoming, benefit segmentation by factor analysis has been used for the first time to group building society customers in relation to their particular attitudes and behaviour. Identifies eight benefits (listed in order of their popularity): personal service, investment, limited banking, accessible cash, cash card, advice, money management, and full banking. Incongruities between certain of the benefits, and the differing customer profiles for each benefit segment were analysed. Makes suggestions on how building societies and banks could use benefit segmentation to improve the effectiveness and efficiency of their marketing strategies.

Journal

International Journal of Bank Marketing – Emerald Publishing

Published: Jun 1, 1996

Keywords: Benefits; Customers; Financial services; Market segmentation

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