CHAPTER SIX
Segmentation Applications in Banking
SEGMENTATION FOR CREDIT CARD HOLDERS
Credit card customers use their cards in diverse ways. They buy different products and services in order to cover their specific needs and according to their particular way of life, personality, and life-stage. Customers also vary in terms of their frequency and intensity of purchase. Frequent shoppers use their cards to cover their daily needs while occasional shoppers use them sporadically and only when they are about to charge the card with a large amount for a significant purchase. Additionally, one-off shoppers tend to make single purchases in contrast to installment buyers.
Since nowadays Internet shopping supplements the traditional trips to retail stores, credit card usage is also differentiated according to the preferred purchase channel.
Cash advances are another differentiating factor for credit card holders. A cash advance is the use of a credit card in ATMs to withdraw cash against the credit limit. This option is utilized by a specific part of the customer base as a personal loan alternative.
Payment time is unavoidable for all customers. However, even then not all customers behave in the same way. Some of them tend to pay the full amount due, whereas others tend to pay a minimum amount of their balance. The latter, usually referred to as revolvers, tend to carry past balances, as opposed to transactors who usually pay their full balances every month.
Although things are beginning ...
