Taxonomy of Marketing Strategies Using Bank Customers’ Clustering

摘要

Purpose-The goal of this study is to identify the main clusters of bank customers in order to help commercial banks to better identify their customers and design more efficient marketing strategies. Design/methodology/approach–Data from 250 bank customers were analyzed by using two-step scalable clustering. Findings-Five different clusters of bank customers were identified, namely, favorite customers, creditworthy customers, non-creditworthy customers, passers, and friends. The findings indicated that disparate clusters of bank customers are extremely different based on their loan amount, default risk, account balance, degree of loyalty and profitability for the bank. Practical implications-The differences which were observed between these five clusters of bank customers accentuate the importance of customer clustering and market segmentation in the financial services industry. Customer clustering can help financial institutions to augment their competitiveness by shifting from traditional marketing strategies to target marketing and segmentation-based marketing approaches. Originality/value-The most important contribution of this study is the incorporation of a wide range of factors that can potentially affect customer clustering in the analysis, whereas, the majority of previous studies only focused on a limited number of variables in order to determine the customer clusters. Specifically, the customer clustering in this study was performed by using demographic variables, profitability, loan amount, default risk, account balance, loyalty, account type, account closure history, customer location, and account currency.