Living Economics

Banks and Others Base Their Service On Their Most Profitable Customers
Under intense competition, banks pamper their best customers.

Using powerful data mining software, banks and other industries have weeded out less profitable customers or singled them out for higher fees. On the other hand, they target their best customers for pampering. Already, about half of big banks with more than $1 billion in deposits use profit data to make customer decisions, more than double the percentage just a year ago.

For banks, the most profitable customers are those who keep several thousand dollars in their accounts, use a teller less than once a month and hardly ever use the call center.

Banks have been forced into this strategy because they are under attack from brokerage firms and mutual-fund companies which are trying to woo away highly profitable bank customers.

  • Brooks, R. "Banks and Others Base Their Service on Their Most-Profitable Customers," The Wall Street Journal. 1/7/1999.
Access Tools
• Advanced Search
• Browse Micro
Comparative advantage (14) Competitive strategy (27) Costs and opportunities (53) Entrepreneurship (3) Externality (29) Free Market Solutions (17) Free Ridership (3) Game Theory (22) Incentives (13) Income Distribution (25) Information (20) Labor Market (24) Marginal optimization (33) Market Demand (17) Market Entry (9) Market Exit (2) Market Intervention (12) Market Structure (29) Market supply (4) Material Flow (2) Miscellaneous (3) Price Discrimination (17) Pricing Strategy (47) Profit maximization (48) Property Rights (43) Regulation (16) Rent Seeking (2) Risk Taking (12) Scarcity (10) Tastes & Preferences (31) Taxes (7) Technology (9) Type of goods (31) What Price Means (28)
• Browse Macro
Boom and Bust (9) Budget Balance (12) Comparative advantage (13) Economic Development (1) Economic Indicators (6) Fiscal Policy (12) Incentives (1) Income and output (25) Income Distribution (5) Labor Market (6) Money and Credit (20) Regulation (5) Rent Seeking (1) Saving (6) Taxes (4) Technology (1) Trade and Foreign Exchange (30)
• Glossary
List All

• Microeconomics Lectures • Macroeconomics Lectures • Economics Cartoons
• Instructor Log in • Sample TOC • Video Tour
• Student Log in
Instructor Log in

Student Log in

Open Menu