Customer Segmentation in the Power of Attorney Business by Means of Fuzzy Clustering

Over the past years, a large market of service providers for powers of attorney has emerged in Germany. The number of officially registered general powers of attorney raised from almost 326,000 in 2005 to more than 5.3 million in 2021, according to the German Federal Chamber of Notaries. Service offers include consulting services on powers of attorney, text blocks and templates, annual update services and emergency call services. In general, the market contains all segments of the population, irrespective of their demographic characteristics. In this difficult and competitive environment, marketing and sales play an important role. In particular, no much research in the field of customer segmentation and marketing campaign preparation on this industry can be found. Thus, this research had the following goals which could all be achieved: The first goal was to compare the actual regional demographic structures of the German population with the regional structures of the customer base of a service provider in order to identify underrepresented population groups. The data on underrepresented groups was used to identify customer segments which can be used for targeting when future marketing campaigns are prepared. To solve this issue popular deterministic and fuzzy cluster approaches were successfully transferred to the use case and suitable configurations were explored as a second goal. As a third goal a recommendation, which of the analyzed approaches is most suitable in the present case, was derived. The approaches were evaluated on a real-world example of a service provider with more than 80,000 customers. It is important to note that despite of the fact that the regarded industry partner addresses a special market, the promising ndings can be transferred to many other areas