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Student Spending Segmentation - 4 Spending Styles You Need To Know | Youth Culture Snippet #3

Becoming a student is a momentous event for any young person and it is often the first time they take control of their finances. Stereotypically, students manage their finances in...

Josephine Hansom, Insight
Josephine Hansom, Insight

Josephine heads up our Insight business.

Becoming a student is a momentous event for any young person and it is often the first time they take control of their finances. Stereotypically, students manage their finances in two quite different ways.The first, and most familiar stereotype, is of the ‘poverty-stricken’ student who is constantly searching for BOGOFs and eating baked beans; the second is the ‘irresponsible splurger’, who spends all their money on nights out and unnecessary impulse buys.  Although it is tempting to believe these images of financially troubled students, at YouthSight we are not a fan of stereotypes; we focus on reality and help clients understand the pressures and pleasures of student life.


Our research

For more than five years, we’ve been interviewing 1,000 freshers from our student panel to lift the lid on students’ attitudes towards finances when they start university. This year we wanted to go beyond the statistics and understand what is driving student behaviour and defining their financial health.

We passionately believe that students are not an homogenous group, and that any ‘student product’ will seldom have universal appeal. At YouthSight we apply advanced analytics to our survey data to create distinct student groups (segments) based on behaviours as well as attitudes and personal values to help our clients remain relevant. Philip Kotler (marketing guru) said, “if the marketer does a good job of identifying consumer needs, developing appropriate products, and pricing, distribution and promoting themselves effectively, these goods will sell very easily”.


Student segments

The infographic below illustrates four different student banking segments. Each segment reflects a distinct type of fresher, who approaches their finances in a particular way. Click here to download infographic.

To give a real life example of how these segments differ, imagine all of the segments were to have dinner together at a restaurant.

  • The in-control leader (29% of students) would most likely suggest paying for exactly what they ordered, and then make a note (physical or mental) of their spending.
  • This is in stark contrast to the laidback non-budgeter (25%) who would chuck some notes on the table and say ‘I can’t be bothered to work it out guys, just take what I’ve got’.
  • The worried cynic would be quietly sitting at the table, thinking ‘ohh why did I come out tonight, I shouldn’t have come out, I should be finishing that essay, not going into more debt’ and would probably pay with the coins they’d been collecting in their change jar.
  • And we mustn’t forget the apathetic introvert (21%), who would be surprised yet pleased to be invited to join dinner and would pay their portion of the bill with the non-student bank account that they opened when they were 16.


Student financial segmentation2Segmentation

Market segmentation (as described above) can be a very powerful tool for marketers and product owners. Understanding the needs (not just the behaviours) of your target market can mitigate the risks incurred when developing new products and services. Knowing the number of segments that make up your customer base and how large each segment group is can help streamline your communications strategy and focus your campaigns on the opportunity groups.



Question? Speak to our youth expert Josephine Hansom.