Description
What is Client Segmentation?
Segmentation is the process of defining and subdividing a large, homogeneous market, such as agriculture finance, into clearly identifiable segments with similar needs, demands, and characteristics. Customers within the same segment share common characteristics that can help a financial institution target those customers and market to them effectively. Customer segmentation can also be defined as “the practice of dividing the customer into groups with similar characteristics to value offers, which are effective and unique”. The grouping can be relevant in different ways to the marketing strategies of the financial institution. The critical factors that have a bearing in market segmentation are clear identification of the segment, immeasurability of its effective size, its accessibility through promotional efforts, and its appropriateness to the policies and resources of the financial institution.
The main objectives of segmentation are profit optimization for each segment, monitoring of clients to provide them with the most suitable value offer, and encouraging clients to grow in order to increase profitability by moving up the segmentation ladder.
