Customer Profiles and Customer Segmentation
Gap Analysis: Identifying actual customer potential set against customer value exploited by the Bank
The Bank classified its customer base mainly by the business their clients did with the Bank, yet not fully able to securely identify customer potentials where an income proof was not available to the Bank. Further, insufficient transaction data from their customers did not yield enough information for modelling customer potential.
MMS.IND profiled Bank customers on consumer lifestyle affinity segmentation data, income, and a range of product purchase affinities.
Based on the customer profiling, the Bank identified approx. 30% undersold customers, i.e. clients having a significant higher potential to bank against their current customer value to the Bank. Only within three months of the project, the Bank realised on an average a 24.8% conversion rate on re-targeting identified undersold customers, a significantly higher conversion rate than it used to be before.
The newly added stores during the first year of the brand working with Geomarketeer, the MMS.IND micro-market segmentation data tool, become all profitable at store level within shortest time compared to before. “Double digit top-line growth for the full year was driven by new stores and improved store performance” was stated by the company.
MMS.IND Data also helped the brand to improve performance in existing stores, wherein the consumer information served for more sharp targeted marketing and sales activities in the location’s catchment areas to attract more consumers into the store – online and offline.
At the point of underwriting a new customer for a credit card or loan, the Bank runs a credit score verification process of the applicant with the Indian Credit Bureau. The problem: nearly 30-40% of the applying customers, especially for personal loans, do not have a credit score in India. In the absence of a credit score for the loan/ credit card applicant, the Bank was looking for detailed and absolutely reliable consumer profile information to build into their approval models for significantly downsizing default ratios.
MMS.IND profiled the Bank's customers into consumer lifestyle affinity segments integrating income and product purchase affinities. Further, the history file of credit card non-repaying / default customers were profiled to identify a “default consumer profile” as a template for the Bank.
Based on the customer profiling delivered, the Bank identified that their risks for defaulting in repayment lies 4 to 5 times higher in specific consumer lifestyle segments with the integrated income, age and family status profiles.
The Bank integrated the MMS.IND data on customer income and lifestyle affinity-segmentation into their Risk Models helping to significantly bring down their default rate.
One of the top three biggest FMCG companies in India, defined following key problem statements for which MMS.IND was requested to provide consumer data based solutions:
Applying the MMS.IND micro-market data and store catchment area profiling tools, the company's outlets were analysed on customer potential in their catchment areas. The micro-market segmentation of total cities / Rural districts supported the brand to identify product-wise high potential / priority markets, in which (a) product sales was benchmarked against potential for this product to sell and (b) optimal new store locations were identified to expand the business to.