In the early 2000’s, in an effort to compete many banks moved away from segmentation to saturation marketing using the wide net approach; “Cast a wide net and catch whatever you can.” Segmentation is the process of dividing the market into groups of common characteristics and tailoring your marketing efforts to each group. However, in the era of free checking many banks moved away from the idea of marketing segmentation to mass marketing. Is marketing segmentation obsolete in the banking industry?
Of course one also has to give some credence to this change, since it is also possible to define the target market too narrowly. When this happens there might not be a big enough market to achieve profitability. The question still remains, however, is market segmentation obsolete and is the wide net approach the more advantageous path
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Marketing segmentation is needed now more that every. Some companies, especially the financial services industry, are not aware that the customers they see in their business place everyday are costing them more than some who they never see. Often times, we think of these people as our best customers because we know them by name. In the meantime the customers who are responsible for making us 80% of our profit go neglected because they might never been seen. It is important to know which customers are costing your company money and those that are actually creating a profit for your bottom-line. All this needs carefully analysis and the help of some software. You may just be surprise to find out who your top 10% of your customers are!
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Norma, thanks for your comment. Let me hear more about your thoughts on this subject. What has been your experience when it comes to market segmentation?
On another note . . . many companies have completely stopped all marketing efforts because they are trying to conserve on cash. However, do you think now is a good time to get your name out there (if you have a business) and get noticed because of precisely that point? Your mail is bound to stand out in the mail box these days because not too many are spending their precious and scarce dollars on direct mail or other marketing activities. I am taking this time to establish my brand and position my company for when the economy turns around.
Of course, I have to be very creative and shrewd but this is a perfect opportunity for me to build my brand. I think others should look at doing that as well.
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