| Abstract: | Users of overdraft checking, a bank service that allows customers to draft checks in excess of their existing balances up to a predetermined limit, were studied to see if they could be segmented on the basis of utilization rates. A total of 271 overdraft checking customers from among 489 enrollees in the service returned completed questionnaires. All enrollees were customers of a bank in a midwestern city of slightly more than 100,000 inhabitants. Data covering the extent of overdraft usage, utilization of other of the bank's services, and sociodemographic backgrounds were collected. Customer groups varying in overdraft usage intensity and date of enrollment in the service were derived through cluster analysis. Multiple discriminant analysis was used to relate use of other services and background data to group membership. Heavy users, the most profitable bank customers, were younger, had lower incomes, and were better educated than light users. Furthermore, early heavy users tended to be similar in socioeconomic profile to later heavy users. So a re view of the characteristics of the first few intense users would have been helpful in the development of a marketing program to attract additional profitable customers. |
