Segmenting bank customers by degree of loyalty

McKinsey Quarterly writes:

Few European banks currently segment their customers by loyalty; most institutions rely only on factors such as age, stage in the life cycle (for instance, student, married, or retired), and other socioeconomic variables. This failure to track loyalty is, in fact, doubly damaging. Our experience suggests that in addition to missing the opportunity to target the most profitable customers, banks selling new products to less loyal ones (say, as part of an indiscriminate marketing campaign) risk alienating them, since they automatically assume that what’s being offered is not in their best interest. Such efforts could ultimately drive customers away.

Banks might supplement existing customer data by establishing an index, or matrix, that specifically tracks loyalty. Every customer can then be placed in a zone by loyalty (anger, distrust, passive loyalty, active loyalty, and advocacy, for example) and by share of wallet..

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