Member Segmentation Paves The Way To Personalization

The mission of PSECU ($8.3B, Harrisburg, PA) is to provide life-long value to members, thereby empowering them to achieve more. To ensure it is communicating effectively with its members based on their needs, the digital-first cooperative uses data-defined fictional characters to represent members that might use the credit union in similar ways.

Although PSECU has used some type of segmentation for years, the cooperative decided to create a new segmentation strategy last year. Initially, this strategy included dividing its membership into 12 key segments. Then, to make its segmentation strategy more useful, PSECU further narrowed those segments into just three buckets: Long-Term Loyalists, Power Members, and Working Families. These three personas represent approximately 80% of PSECU’s total membership base.

“We wanted to become more data-driven as we determine how to best segment our market,” says Sharon Eiswert, PSECU’s director of marketing and deposit strategy who spearheaded the effort in her previous position as director of marketing analytics and research. “We needed to take something overwhelming, like the initial 12 segments, and use rational thought to narrow it down into something manageable.”

The Right Approach

Eiswert has worked on segmentation strategies for the grocery industry, and she has experience with bigger, more costly strategies. According to the PSECU director, there are many ways to approach segmentation. PSECU started by purchasing Experian’s Mosaic segmentation data, which groups households based on demographics and socioeconomic characteristics. The cooperative then appended its own database with the Mosaic data, which provided instantaneous insights into attitudes, behaviors, lifestyles, financial thinking, and more.

Personas At PSECU

Working Families: Medium-tenured members with high digital savviness. Typically with higher loan balances and lower deposit balances, these members are working to better their financial life. Family focused content and financial education are relevant concepts to help them on this journey.

Power Members: Medium-tenured members with high digital savviness . Typically having both high loan and deposit needs, these members are looking to enjoy their wealth and continue to build upon and utilize it. The credit union model appeals to their philanthropic interests, as do rewards for their loyalty.

Long Term Loyalists: Longer-tenured members with lower digital savviness. Typically having shorter-term loan and deposit needs, these members are comfortable in their financial lives and looking to stay that way. Being PSECU’s most loyal members, encouraging continued use and sharing their positive experiences with PSECU are extremely relevant.

“It was a great starting point,” Eiswert says.

Next, the credit union added individual member data such as total loan balances, loan types, and membership eligibility categories that outlined affiliations that would enable potential members to join PSECU. It also added more Experian data to focus on wallet share of total loans within its core market the overall population in Pennsylvania.

“Together, all that data gave us a good understanding of these groups and their potential needs, Eiswert says.”

According to Eiswert, segmentation strategies can be large or small. PSECU took a realistic approach by starting with something already available, then customizing it for the credit union’s needs.

Using Insights

PSECU took a deep dive into the three personas, considering how to approach them and learning how much of the current and potential markets they represented. It created one-page persona sheets to help the member experience team better understand each of the three groups’ needs. The marketing team also learned about the personas so it could customize future campaigns and offerings and teach the credit union’s other business units about the concepts.

PSECU is still developing its measurement framework to evaluate the success of its segmentation, which will likely include A/B testing to evaluate the impact of personalized communications based on the three personas, but Eiswert says the credit union has already notched some early success.

Last year, the cooperative embedded customized content into member communications.

“We might have one master email or landing page but can insert custom objects into that,” Eiswert says. “So, Working Families receive content on financial education while Long-Term Loyalists receive information on how to use our digital tools because they’re not quite as comfortable with technology.”

Automation like this enables the marketing team to use the personas in a way that’s not extremely cumbersome.

“It’s been a really big win for us,” Eiswert says.

Lessons And Advice

The concept of personas has a learning curve for people who are used to targeting members based solely on demographic data, which Eiswert says a credit union can do without adopting an advanced segmentation strategy.

Of note, personas are meant to be a guide; they are not an absolute or actual person. Explaining that across the institution has been a challenge.

“You want to bring the personas to life, and the best way to do that is to have an image and context about their lives,” Eiswert says. “It’s important to keep in mind this is a picture of an aggregate, not a real person.”

For example, long-term loyalists don’t automatically equate with older members. Rather, they are more apt to share a certain mindset and use the credit union exclusively. Likewise, personas don’t automatically represent a life stage. Personas include how a member might think about or use money, attitudes, and lifestyle in general.

“Personas are not the same as demographics,” Eiswert says. “There are varying degrees to which someone fits or does not fit each profile.”

PSECU is continuing to develop its key personas through an online research community of approximately 2,000 members and non-members who have agreed to provide ongoing qualitative context that will help staff members better connect with each of the key groups. The online community provides a full range of flexible activities, including online focus groups, moderated chats, discussion boards, and even self-recorded videos that help the cooperative understand more about these group’s lives and attitudes toward money.

In terms of advice for others, Eiswert says to keep an open mind to develop a strategy that works best for the organization.

“I had in my mind that we have to do it this way and have this huge project,” Eiswert says. “But when I sat down and thought about how the organization is actually going to use it, the approach became clearer.”

The marketing director also recommends keeping the number of segments or personas manageable.

“It has to be useable and tangible for the organization,” Eiswert says.

And, lastly, obtaining buy-in from leadership is essential. At PSECU, using segmentation for personalization is a strategic goal; for others, it’s important the leadership team and board are committed before the credit union embarks on its own segmentation strategy.

This article originally appeared on CreditUnions.com on May 23, 2022