One of the most essential components in understanding clients’ purchasing behavior is customer segmentation. Create initiatives per identifying high-potential cardholders and removing passive and inactive clients, it is possible to raise wallet share and establish the primary card as well as increase billings, monthly transactions, and outstanding balances per account segment. The objective is to increase primary customer retention from 30% to 35%, average customer retention from 25% to 30%, low usage consumers from 20% to 25%, and inactive customers from 15% to 20%.
Credit card data offers a vast amount of information and diversity, allowing for insights into customer shopping habits and payment preferences. To enhance card activation, it is essential to analyze customer segments and track their migration over time, assessing the stability of primary and average segments. This analysis helps identify segments that require proactive management. Continuously monitoring segment migration becomes a valuable tool in observing changes with each scoring cycle. The ultimate goal is to establish rules that categorize credit card accounts into segments characterized by distinct card usage patterns and resulting profitability. These segmentation rules should be based on behavioral attributes of account usage, as these can be influenced through intelligent and targeted marketing efforts. Customer segmentation is an ongoing process that necessitates constant management and fine-tuning to adapt to changes in data sources, business models, and customer portfolios.
