Niche Banking: “A big chunk of a small pie” November 11, 2009
Posted by nichebanking in Niche banking, Problems with traditional banking.trackback
A big chunk of a small pie. This headline is just 7 short words. But it represents a whole new way of segmenting the market of potential customers. Here’s what I mean:
Today’s banks look at the entire market (defined by geography and often demographics, but rarely more narrowly defined than “you can fog a mirror and live within 3 miles of our branch”) and try to gain a share of this market. In other words, today’s banks get a small piece of a big and extremely broad market.
Niche banks do the opposite. They look at the entire market, and then define a narrow slice of it (defined NOT by geography or demographics, but by psychographics, interests, passions, etc.). Then, they try to gain a LARGE share of that tiny little slice. We’ve put together a graphic to show the difference between traditional banking and niche banking.
Click to enlarge
The long tail of banking is about these small slices…and lots of them. So why don’t we see this strategy in the banking industry today? Because this doesn’t work in a brick and mortar world…which we have lived in until recently. More on this in our next post.
[...] banking, Problems with traditional banking, The Long Tail of Banking. trackback In our last post, “Niche Banking: A Big Chunk of a Small Pie,” we discussed how the future of banking (niche banking, of course) will be in serving high [...]