Just had a great discussion about segmentation today, building on yesterday’s blog entry.
The old homogenisation of customers into apples and pears, oranges and lemons, goes back to a simplistic time of the 1980s, where the analytics tools could not mine customer data to a segment of one.
Today, these tools can do this and far more, but banks are loathe to deploy such tools or are handcuffed from doing so due to their legacy systems.
That is changing, as banks rethink processes for mobile channels and personal financial management, but the challenge is how to mine that data and deliver actionable insights on such data.
One really interesting idea is to offer actionable data based upon coupons and offers from retail partners.
This is something I’ve seen a few times before, particularly from solutions providers who make clear they can mine customer data and make proactive offers based upon transaction habits at point of sale.
In the UK, this is where banks have been worried that Tesco has their major opportunity.
The idea that Tesco could not only make proactive offers – “buy this beer at Tesco next time and it’s 10% cheaper” – but also mine the data for financial cross-sell – “as you don’t drink beer, we give you 15% reduction on your car insurance” – has been a concern for a long time.
That Tesco concept is already here, so the banks now need to get with the segment-of-one or potentially get rail-roaded by those who do.
But, more interesting, is an idea bounced off met today that I really like.
Not only could a bank start to intelligently cross-sell and co-promote offers proactively based upon segment-of-one analysis, but they could also turn this around and offer the bank data analysis to corporates as a service.
Therefore, the bank could offer Tesco’s competitors analysis of their transaction volumes compared with Tesco, and look for co-promotional offers for the competing retail partners to compete more effectively.
In this context, you could be shopping at Tesco and the bank sends you a text that says “buy that beer at Sainsbury next time and save 10%”.
Hmmm … banks becoming instrumental in information warfare between retailers … this could get really interesting.
In fact, as information about money is more important than money itself, finformation warfare could be the real battleground of the future.
Does this mean that a bank be a disruptor in the Amazon, Apple, Google game?
Are banks ready for this?