profitable businesses with distinctive and compelling value propositions. These propositions can be structured by gifted salespeople in the course of a number of expensive personal visits. Or they can be developed more systematically in an exercise designed to define and serve unique and profitable customer segments.

Given that most banks lack a superabundance of gifted salespeople, the second approach would seem the more productive. Unfortunately, many segmentation efforts don't go beyond the use of simplistic five-digit standard industrial classification codes. This can fail because the codes describe the requirements of "average" firms, and no firm is really average; and because they generate a potpourri of segments, some of which are too small and others too large and unwieldy.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.