Banks need more than an initial investment to fund the company. You need to clearly understand your market, but you also need to segment it. Let’s see, for example, how the community banks segment their customers in cities like Miami, FL.
Regardless of the bank’s size, dividing customers into groups based on their needs and goals helps the institution deliver better, more tailored services and experiences.
Just in Miami, FL, there are at least a dozen community banks, each with a larger market share than the others, yet with very similar visions and goals.
The following are some of the most common and profitable segments of a community bank:
►Retail banking (consumer): focusing on individual consumers who need checking, savings, and personal loans like a mortgage or car loan
►Commercial/business banking: this segment is one of the
most profitable for community banks. Where the prospects are local business owners and several small to mid-size businesses. Products and services range from checking/savings to commercial loans, lines of credit, and treasury management.
►Private Bank (wealth management): although this segment is more common in larger banking institutions, some community banks allocate funds to service this type of client.
With segmentation comes personalization and the allocation of the right resources to serve each area. It encompasses more than just dividing and creating groups; it requires a strategic approach. Segmentation can identify which customers have the greatest potential, for generating value, and the type of human support needed to achieve operational efficiency. In the article Segmentation strategies in banking sector I KAIZEN™ Article, we can read more about the importance of segmentation in the banking industry.
In conclusion, a key takeaway of this topic is: what results do we want from efficiently dividing customers’ needs? Do we want to just reach a profit goal or achieve higher client retention? Do we want to divide clients using AI-powered tools and leverage other modern resources?
