As a credit union, you need to understand who your potential members are and what products and services they need. But in today's hyper-competitive market, demographic segmentation is no longer enough to zero in on the members that will help you build a rising revenue stream. Instead, you need powerful tools that leverage big data and accompanying analytics to provide the granularity necessary to identify and "talk to" high opportunity members. These tools should fully explore the following three keys to enhance your segmentation:
Total financial opportunity and capacity: What are your members' incomes, accumulated wealth, credit behaviors, and spending habits? Who has the means or wealth to invest heavily, in contrast to individuals who lack the means regardless of intent?
Channel preference: Which of your members are using mobile or online banking? Who still prefers to walk into a physical office? You may be surprised by the answer.
Purchasing behaviors: What loans have your members taken out recently? Borrowers who recently took a certain loan product — auto or mortgage — may or may not be interested in ancillary offerings.
Drilling Deeper, Beyond Demographics And Life Stage
Many financial institutions rely on demographics and lifestage to help them segment their audience. These tools are helpful, but they are not enough. Segmentation tools that depend solely on demographics leave an information vacuum in wealth analysis, channel preference, and purchasing behaviors. These tools assume that individuals who fall into broad demographic and life stage categories have certain financial behaviors, which may have been valid 30 or 40 years ago, but not today.
Today, there are powerful customer segmentation tools that provide credit unions with data granularity that goes well beyond simple demographics. These newer tools rely on a foundation of directly measured consumer assets and are aggregated to provide highly predictive insights into the likely wealth profiles, habits, and needs of current and prospective credit union members. In addition, today’s segmentation tools can help credit unions understand how best to communicate with various member segments (e.g., via mail, email, or mobile). With these insights, credit unions can better place the right message in front of the right person.
What To Cross-Sell Or Upsell And To Whom
Today's credit unions must understand what products and services their members might need. What types of investments may interest members beyond checking and savings? What types of loans and services are they looking for?
Segmentation tools should provide credit unions with precisely this information — consumer financial activity, behavior and financial capacity. This helps credit unions identify member segments for specific product and service cross-sell or upsell efforts. Inundating members with financial products they can't use or don't need wastes money and can leave them feeling disengaged. Knowing a member’s needs at this drill-down level helps deepen member engagement and improve customer service and retention. It also makes for a more favorable relationship.
Painless Implementation Is Key
Easy access to these newer segmentation tools is critical for credit unions to be able to efficiently transfer their new learnings into their marketing tactics. Many segmentation tools offer both standalone applications that can help credit unions ramp up quickly, as well as advanced options to combine new and current member data within a credit union’s existing CRM or POS application.
Combining powerful segmentation insights with what the credit union already knows about its members fills in many gaps, adding even more power to a credit union's ability to find hidden opportunities within its member-base and promote appropriate new products and services.
Credit unions who want to stay a step ahead of the competition and gain insight about the likely financial profiles of their members should consider these powerful segmentation tools.
For more segmentation tips, download the “Turning Big Data Into Big Revenue” whitepaper.
About The Author
Richard Nuckols is the Director of Product Management for IXI Services, a division of Equifax. He has over seven years of experience with IXI Services developing solutions for the nation’s leading financial services firms to optimize their omni-channel marketing strategies. Mr. Nuckols holds Bachelor’s Degrees in Economics and Mathematics from the University of Virginia.
For over 20 years, IXI™ Services, a division of Equifax, has helped the nation’s leading financial services and consumer marketing firms optimize omni-channel marketing efforts, identify growth markets, and enhance practice and performance management. With our comprehensive suite of analytical, digital, marketing, software, and data solutions, marketers can build more profitable business relationship with consumers. Our specialty in anonymous, direct-measured data differentiates our ability to connect our clients with their optimal customers. We help our clients expand their view of customers’ and prospects’ full financial wallet by providing insights on wealth, income, spending, credit, investment style, share-of-wallet, and share-of-market.
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