BY AARON GREGERSON
Meeting the demands of financial consumers has become increasingly difficult over the past two decades or so. Technology and the evolution of brand marketing has changed what consumers expect from the businesses they choose to do business with. For financial institutions, this has largely meant trying to keep up with the convenience, simplicity and user friendliness of brands such as Amazon, Apple, Samsung and others.
Consumers today also see what brands such as Bank of America, Wells Fargo and USAA have done to make managing finances easier. In turn, consumers expect degrees of those streamlined services from every financial institution. The rapid distribution of these expectations to consumers has largely been influenced by good brand management and a solid marketing strategy. The large bank brands have created expectation by tapping into the mindset of consumers.
Market Segmentation and the Buyer’s Journey
When the era of mass marketing ended, the advertising industry saw a definitive separation between marketing and advertising. Marketing became about the “how” to reach your target market by performing research, applying the research findings to an advertising campaign, and executing that campaign through market segmentation.
As market segmentation became more advanced in recognizing how consumers acted, four types of market segmentation were exposed.
- Geographic segmentation: Defining a market based on location, often where a consumer resides.
- Demographic segmentation: Defining a market based on proven traits of the consumer; such as age, gender, and income.
- Psychographic segmentation: Defining a market based on how the consumer thinks and interacts with the world around them. It is often measured by what media they choose to consume.
- Behavior segmentation: Defining a market based on how the consumer acts and behaves. This is often measured by tracking online activity.