Know Your Consumer Segments

Fidelity National Information Services
May 3, 2010 | COMMENTS

Which of your members is most likely to use your credit card? Your debit card? What about potential members? To get the best value for your mar­keting dollars, target these specific consumer behavioral segments with messages that will resonate with them.

Debit Card Users

• Established debit heavies: These consumers are middle-aged and predominately female, married with children, largely professionals, with average monthly spending but high debit usage. They do use credit cards for travel and large-ticket purchases.
• Young debit enthusiasts: These tech-savvy spenders of the future are young, mostly unmarried, and urban. They're low spenders and heavily use debit. They also consider checks a nuisance.
• Bare essentials: Younger, rural, low-income families, these consumers tend to be blue-collar workers and focused on mak­ing ends meet. They use debit for a third of their spending and checks for a third—mostly for bills and services. Their credit card usage is low.
• Debit rewards loyalists: These younger couples, parents, and some singles, with average income but low net worth, use debit heavily, treating it like checks or cash. They use credit for big-ticket purchases. They love debit and credit card rewards.

Credit Card Users

• Air-mile junkies: This is the most affluent group, composed of mostly married, educated, middle-aged executives or retirees who appreciate luxury and can afford to travel. They use reward credit cards for nearly half their spending, most often co-brand­ed cards. They tend to be transactors.
• Cash-back fans: Young, male and educated, these consumers use credit for more than half their spending, mostly on non-co-branded rewards cards. Seven in ten choose cash rewards. They use checks for 22 percent of spending and debit usage is low.
• Cash and points accumulators: These affluent, educated, urban, mostly male consumers have high net worth and spend freely. Nearly half their spending is on rewards credit cards, mostly non-co-branded. They redeem mostly cash-back rewards, with points a close second.

Mixed Users

• Middle-of-the-roaders: They're traditionalists, boomers and seniors, middle-income consum­ers, and have generally saved well. They use debit, cash or checks interchangeably for daily purchases and save credit for large purchases. When they do use credit, it's usually a reward card.
• Upscale check writers: This group consists of mostly affluent, urban, retired, well-educated consumers who prefer checks, using them for nearly half their spending. They rarely use debit, but aren't averse to credit cards, using them for 27 per­cent of their spending.
• Paper–struggling families: Low-income, low spending, rural and suburban consumers comprise this group. They primarily use cash and checks, and seem to avoid debit. Many do have credit cards, used in need for everyday purchases, and carry a $5,000 balance, on average.
• Paper–seniors: These older, lower-income but average-spending seniors are used to cash and checks, which account for 80 percent of their spending. They avoid debit cards, and have—but rarely use—mostly non-reward credit cards. Although having earned modest incomes, they tend to have above-average net worth.

FIS provides core processing for financial institutions. This article was reprinted with permission from Credit Union Digest, the publication of the California and Nevada Credit Union Leagues.