Performance driven outcomes for Financial Services marketers

  • June 8, 2018
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In financial services, a marketer’s job is ever-evolving. They are being asked to do more, contribute more, and add to the digital share of the business. Expectations are high that their efforts will go far beyond tactical marketing initiatives to truly help their organization reach its strategic goals. Savvy marketers today must not only plan and implement marketing campaigns — they must also measure the effectiveness of their efforts. With that in mind, here are the four metrics that financial services marketers must embrace on to drive performance.

Propensity to Buy

As a marketer, it is critically important to know where to spend your hard-won marketing budgets. Understanding your customers’ and prospects’ propensity to buy certain products and services can go a long way toward improving the effectiveness of your marketing spend. This will, in turn, ensures the best return on your marketing investments. Marrying your institution’s own data with predictive purchase potential models lets you quickly assess which customers and prospects have the highest propensity to buy a specific product or service. Similarly, a “next-best-offer” product model can tell you the “next” product or service they are likely to purchase.

 

With this information, you can focus on acquisition and cross-sell initiatives and offering only those products and services your target audiences are most likely to buy. As such, you can expect a better response rate and greater return on your marketing investment.

Cost per Acquisition

Cost per acquisition is a key measure of the impact of your acquisition programs. Getting to this number is easy: Simply divide your acquisition costs by the number of accounts generated.

But don’t stop there. You’ll also want to know

1) how your cost per acquisition compares to peers

2) how profitable are the acquired accounts

Knowing your cost per acquisition — along with the profit you’re generating for your institution — is how you prove marketing value.

Products/Services per Customer

Conventional wisdom says the more products and services you provide customers, the more loyal and profitable they will be to your institution. Knowing your average products/services per account holder is a good way to determine which targets are most worthy of your attention.

 

For example, say your institutional average is 2.5 products/services per customer, which would typically indicate a savings account, loan or a credit card. It’s easy to see that customers with many more accounts than the average has likely reached their saturation point — selling them more products and services is not likely. However, customers with fewer than average products and services are ripe targets for cross-selling. Of course, to cross-sell most effectively, you need to know which products and services to offer which customer, which brings us back to our first measure — propensity to buy.

 

Integrating your products/services-per-customer data with propensity-to-buy modeling will result in a much higher response to your cross-sell efforts.

Return on Investment (ROI)

Some financial services marketers only measure the effectiveness of their marketing activities by leads submitted. Lead submission is certainly one indicator of campaign success since it reflects how favorably recipients viewed your initial outreach. It’s especially valuable in assessing the effectiveness of the design, message, and call to action.

 

Return on marketing investment measures how well the campaign performed in each channel, as well as its contribution to your financial institution’s bottom line. You can run a campaign that results in significant lead submissions, and that’s great. But if the cost of the campaign outweighs the value of the new business, the financial institution ends up with a net loss. The way to assess ROI is to follow the money.

 

You need to not only track lead submissions but also track conversion — opened accounts, purchased products or approved loans, for example. But the measure doesn’t stop there, follow-up on the value of these purchased products and services will tell you how much revenue you’ve generated relative to how much the campaign cost.

 

Unless your marketing team understands how the results translate into revenue, you fall short of the goal. And yes, sometimes it’s difficult to correlate each sale to a specific marketing effort. Knowing ROI helps prove your contribution to your institution’s bottom line.

 

These metrics must be viewed in the context of your institution’s long- and short-term goals, historic performance, and market position. But digging in and asking the questions that will illuminate these numbers will make you a better marketer and a more valued member of the leadership team.

 

Look forward to hearing your view on this. Don’t hesitate to write back to me at marketing@lemnisk.co

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