At the Self-Actualization stage (the highest level), basic financial needs are met. The customer seeks products that define their legacy, personal growth, or contribution to society (e.g., specialized wealth management, art investing).

CRM uses data to segment customers, predict their needs, and offer relevant products. It shifts focus from "Product-Centric" to "Customer-Centric" banking.

During the Growth stage, the product gains market acceptance. Sales volume rises sharply, per-unit cost falls, and profits peak. However, competitors also enter the market during this phase.

Physiological needs are basic survival needs (food, shelter). In banking, this translates to basic products needed for day-to-day living, like a savings account for liquidity and consumer loans for household items.

Demographic segmentation uses quantifiable population statistics. Age, income, and gender are the most common parameters used by banks to target retail products (e.g., Senior Citizen FD, Student Loan).

Behavioral segmentation looks at *how* the customer interacts with the bank—are they heavy users (transactors), do they prefer digital channels, are they price-sensitive? This helps in targeted marketing.

This principle suggests that a small portion of high-value customers contributes the majority of the bank's profitability. CRM strategies focus on retaining this top 20%.

When a product is declining (obsolete or unpopular), banks try to revive it by bundling it with other products, reducing costs to maintain margin, or simply withdrawing it from the market.

At this stage, the priority shifts from asset accumulation to income generation and security. Reverse Mortgage provides income from property, and savings schemes offer safe returns.

Cross-selling increases the "Wallet Share" of the customer and deepens the relationship, making it harder for the customer to switch banks.

In uncertain economic times (recession), customers prioritize safety of capital over high returns. Thus, the demand for safe liability products like Fixed Deposits tends to rise as people save more.

Psychographics delves into the "Why" of buying behavior—focusing on inner traits like lifestyle choices (e.g., adventurous vs safe) and values, rather than just external stats like age.

Safety needs focus on security (Insurance, FD). Social needs involve belonging and status, leading to demand for consumer loans (Car Loan, Home Improvement) to improve lifestyle and social standing.

Successful cross-selling relies on "Right Product, Right Customer, Right Time". Selling a pension plan to a 25-year-old might fail, but selling a car loan might succeed.

Universal Banking is a system where banks provide a wide variety of financial services, including commercial banking, investment banking, and insurance, becoming a one-stop shop.

Studies show it costs 5-7 times more to acquire a new customer than to retain an existing one. Loyal customers are also more likely to buy more products (cross-sell).

Understanding the geographic concentration of customers helps banks place branches/ATMs strategically and tailor products to local needs (e.g., agricultural loans in rural areas).

Loyalty is a behavior. Segmenting based on loyalty helps banks design retention programs for loyal customers and acquisition offers for switchers.