Tina Harrison

Mapping Customer Segments for Personal Financial Services

Driven by changes in the regulatory environment and pressures on product profitability, market segmentation is increasing in importance as a competitive weapon. However, still too much emphasis is being placed on descriptive studies which do not sufficiently explain differences in financial services consumer behaviour. Reports the results of a qualitative study which attempts to offer a more detailed explanation of financial services consumer behaviour. Investigates consumer‐perceived knowledge, confidence and level of involvement in dealing with financial services, and analyses the impact of these factors on financial services usage. Four segments are identified (Apathetic Minimalists, Capital Accumulators, Cautious Investors, and Financially Confused) which differ in terms of their financial services usage. The results also suggest that consumer‐perceived knowledge and confidence have an impact on the level of potential profitability which can be expected from the segments identified. Further work is be...

Online banking information: what we want and what we get

This paper reports on young adults’ expectations and perceptions of online retail banking information. A combination of qualitative and quantitative research was used. Focus groups proved valuable in eliciting criteria grounded in the experience of users of bank Web sites. The subsequent questionnaire survey allowed the measurement of gaps between perceptions and expectations. The results indicate that respondents expect bank Web sites to be easy to use and to provide them with basic account/product details. These features are valued more than the technological aspects. Yet, perceptions of actual information provision differ. While basic account and price information is perceived to be provided, certain features are perceived to be less prevalent, rendering bank Web sites ineffective at aiding consumer decision making. The research questions the role of the Internet in information provision and suggests how banks can improve their Web sites to assist consumer decision making.

Identifying cross‐selling opportunities, using lifestyle segmentation and survival analysis

Purpose – To demonstrate the successful use of lifestage segmentation and survival analysis to identify cross‐selling opportunities.Design/methodology/approach – The study applies lifestyle analysis and Coxs regression analysis model to behavioural and demographic data describing 10,979 UK customers of a large international insurance company.Findings – There are clear differences between the lifestage segments identified with respect to customer characteristics affecting the likelihood of a second purchase from the company and the timeframes within which that is likely to take place. The “mature” segments appear to offer greater opportunities for retention and cross‐selling than the “younger” segments.Research limitations/implications – The study was limited by the type of data available for analysis, which related mainly to life insurance and pension products characterised by low transaction frequency. Different results might be expected for banking or credit‐and‐loan products. The findings could be enh...

Analysis by paralysis: The pension purchase decision process

Purpose – Attempts to understand the consumer behaviour in the context of the pension purchase process, including the decision process and factors affecting the decision.Design/methodology/approach – Focus groups were conducted among manual and clerical grades of employees within a public sector organization who were members of an occupational pension scheme.Findings – Despite the relative importance of pensions and the degree of risk associated with the purchase, the findings clearly indicate that purchasing decisions in this context are neither completely informed nor rational. The process described by focus group participants suggests “analysis by paralysis”, characterized by complexity, confusion and apathy.Research limitations/implications – Small number of focus groups and a focus on manual and clerical grades of employment only. A larger sample and representation of other grades of employment might yield differences in decision making between different segments of the population.Practical implicati...

Critical factors affecting intermediary web site adoption: understanding how to extend e‐participation

Purpose – To provide an investigation of e‐commerce development via an examination of the forces shaping web site development among intermediaries in an extended supply chain.Design/methodology/approach – A two‐stage research design combining qualitative and quantitative methods. Unstructured interviews conducted in the spirit of phenomenology elicited a range of critical incidents of web site development which were further examined via a quantitative survey of intermediaries to test for relationships between critical incidents and web site adoption.Findings – Adopter groups were identified which showed statistically significant differences in terms of the critical incidents driving web site development as well as differences in terms of key company characteristics. The timing of web site adoption was also found to affect the subsequent use of the technology, with early adopters making more advanced use.Research limitations/implications – Limitations associated with the use of retrospective data and respo...

A critical examination of service loyalty measures

Abstract Service loyalty is attracting growing interest as a result of the important role that services play in today’s global economy. Advances in technology have increased the demand for a services-based economy and prompted a shift from a product-centred logic to a service-centred logic. Despite general agreement between researchers and practitioners of the strategic importance of service loyalty, and growing acceptance of a dynamic or processual perspective, scales used to measure the dynamic view of service loyalty can be criticised for their lack of methodological robustness. This paper contributes both theoretically and practically by critically examining these service loyalty scales and proposing a new multi-item scale based on Oliver’s (1997) conceptualisation using a mixed-method study. Qualitative and quantitative data were collected from UK retail bank customers using in-depth interviews and an interviewer-administered survey. A two-step structural equation modelling strategy was used to validate the measurement and structural models. The results provide support for a four-dimensional scale of service loyalty. This study provides service researchers and managers with a better understanding of service loyalty and presents them with a robust scale for its measurement, in turn improving their ability to draw accurate conclusions.

Towards a universal model of internet banking adoption: initial conceptualization

Purpose – The purpose of this paper is to propose that customer readiness and web-channel readiness for internet banking (IB) adoption are the twin universal determinants of retail customers’ attitudes and intention towards IB-adoption. The paper delineates IB-readiness as the state of preparedness, ability, and willingness to engage in IB, and the authors argue that both the potential banking customer and the financial institutions web-channel must be equally ready before IB-adoption can occur. This paper presents the results of the initial test of the IB-readiness model with a sample of retail banking customers in Scotland. Design/methodology/approach – Nine customer-related and ten channel-related predictor-variables isolated from existing literature were tested for their effects on attitude and intention towards IB-adoption. Seven demographic mediators were also tested for their impacts on the effects of the predictor-variables on attitude and intention. A sample of 1,000 customers was surveyed. Mult...

Segmenting the market for retail financial services

The changing nature of retail financial services, brought about by regulatory and economic forces, has prompted financial institutions to take a renewed interest in the technique of market segmentation in an endeavour to compete successfully. Traditionally employed segmentation studies in the area of financial services have tended to be simple, relying largely on demographic information. This has resulted in segment descriptors rather than segment predictors being identified. This paper argues that the lack of a behavioural element in traditional studies has been the reason for this problem and contemporary research in this area should be concerned with explaining financial services behaviour and identifying segment predictors. An approach is suggested which is quantitative and works towards the establishment of a multidimensional model for segmentation of the retail financial services market. The paper focuses primarily on two sets of variables to be contained in the model and their justification for sel...

Impact of co-production on consumer perception of empowerment

Service-dominant logic emphasises the customer role as co-creator of value. However, there is little empirical evidence of how customers perceive and experience value co-creation from participation in service co-production. The internet and interactive websites have increased the potential for consumers to engage in co-production through increased self-service which is acknowledged to contribute to consumer empowerment. The paper explores empirically the impact of service co-production via web technology on consumer perceptions of e-empowerment. Findings suggest that e-empowerment is multidimensional comprising empowerment and disempowerment dimensions. The paper makes several contributions to services theory. Variable co-production leads to different types of empowerment/disempowerment. Value-in-use can be perceived as process value and outcome value. The findings challenge the assumption that co-production naturally leads to co-creation of value. Co-production can be a double-edged sword: for some it can be value-enhancing, whereas for others it can be value-destructing. The paper notes several implications for practice.

Internet archaeology: uncovering pension sector web site evolution

Purpose – The paper has two objectives. First, it seeks to present a procedure for exploring web site development using the Internet archive (www.archive.org). Second, it aims to test the assumption that over time a progression in web site numbers and interactivity is visible within an industry sector.Design/methodology/approach – The Internet archive was used to view web site activity from 1998‐2004 for 21 randomly selected organisations generating a final sample of 106 web sites. Content analysis was used to gather information on web site numbers and functionality. Web sites were evaluated using existing models of web site evolution adapted for the financial services sector.Findings – This paper produces meaningful data on patterns of web site development. Results indicate that UK pension provider web sites have increased in sophistication but remain underdeveloped.Research limitations/implications – In this paper there is no qualitative web site assessment and thus no information on web site quality. T...