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In the context of Financial Services, consumers are becoming more knowledgeable
and more confident. Managing Change has defined a Behaviour Segmentation
Model which has gained wide support from some of the major players within
the UK Financial Services industry. It is based on consumer's awareness and
confidence of financial services products and services. It has 4 segments:
The model also defines the likely distribution methods for these different segments.
Customers: Traditionally seen as the poorer and older in society for whom financial services products are typically not on the agenda. Lottery wins, redundancy other windfalls and lucrative jobs can provide surplus cash from time to time.
Distribution: Direct sales force able to explain the client's needs and the products on offer. Promotional media and out-bound telemarketing serves to arrange the visit from the company representative.
Suppliers: Those with a direct sales force such as the Pru and the TSB.
Trend: A gradually declining segment as people become more financially aware.
Customers: Those with more complex financial affairs. Typically they will have bank and building society accounts, a mortgage, some pension and life insurance provision. Aware of the need to secure themselves against life's problems, particularly in health and pensions. Also aware from the media that buying financial products and services is risky. They are suspicious of financial sales advisers and get confused by all the jargon.
Distribution: New entrants typically enter this market using in-bound and out-bound telemarketing supported by media promotion.
Suppliers: Those with a good reputation like Equitable Life. Increasingly includes retailers with well known quality brands, such as Virgin, Tesco, and M&S.
Trend: Probably currently the largest group. Will increase from first category but loose to the next.
Customers: As the financially aware but will tend to have more financial products and services (e.g. multiple bank and building society accounts, credit cards, etc.). This group are well read in financial matters using such media as the money pages in the Saturday newspapers. This information includes not only the good deals but also the pitfalls. These customers know what they want and are quite happy to shop around. They are often busy professionals who seek value for money and responsive service.
Distribution: Media response and telephone based products and services. This group will be the first to embrace Internet shopping for financial services.
Suppliers: Typically mutual and direct line insurance companies, and those building societies with banking facilities.
Trend: An increasing group, especially amongst the young and upwardly mobile.
Customers: Those with special requirements either in terms of products (e.g. insure my classic car) or in terms of service (pander me, I'm rich and important).
Distribution: IFAs and brokers able to give a personal service.
Suppliers: Those who sell via IFAs and brokers and are able to back them up with a quality personal service.
Trend: Increasing but from a relatively small based.
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