Improving returns on marketing investment
Traditionally, quantifying the return on investment (ROI) of bank marketing has been elusive. In today’s more competitive environment, it simply is not enough to base marketing results on inferences. Fortunately, today’s bankers have access to a combination of tools and services to measure marketing’s true impact and determine actual ROI.
A bank’s ability to successfully reach and attract target audiences increasingly hinges on data. While every bank collects data in some way every day, the challenge for many lies in harnessing that data and leveraging it in a meaningful way. Uncovering insights and then deploying marketing tactics accordingly requires a layered approach encompassing two elements: strategy and analytics.
Before banks hit the ground running with a new marketing or analytics solution, they need a foundation, a strategy. Every bank should begin by evaluating the capabilities and capacity of its existing marketing department. While modern marketing techniques are no longer exclusive to the nation’s biggest banks, an institution’s marketing resources do affect the approach that it should take.
Banks with smaller budgets often operate with limited marketing resources, increasing the pressure to optimize any technology investment that they make. Closed-loop marketing, analytics and omnichannel communication are fundamental; however, these techniques should be executed with guidance from a professional familiar with database integration, data mining and predictive modeling. An extra set of experienced eyes can help banks increase profitability, develop marketing programs that expand market and wallet shares and add value to each client relationship, while also reducing risk.
Large institutions need marketing assistance too, but the level of service can be quite different. While a larger bank’s marketing team might include professionals with data analytics experience, they are likely also required to generate a greater number of programs and campaigns, and at a faster rate. Therefore, these institutions can benefit from data analytics solutions that automate marketing, communications and campaign management to targeted audiences. Automation can improve the efficacy of each marketing activity while expediting data mining to support the volume and speed of a bank’s marketing efforts. For a larger bank, this is valuable to ensure multiple marketing initiatives are all in concert with defined ROI goals, especially as it relates to identifying new and hidden sources of revenue and increasing conversion rates.
Many banks continue to rely on outdated methods for gathering and organizing data. Insight often remains housed in separate repositories and spreadsheets, making it nearly impossible to find information, let alone do something with that information. While this data access issue creates major hurdles for bank CEOs and chief financial officers when it is time to create board reports, it is increasingly a detriment to marketing initiatives as well. Even though bankers generally concede that their valuable data is un- or underutilized, too many remain slow to correct this problem.
The solution is to trade in antiquated spreadsheets for a common repository for all data. Executives do not have time to mine through tables of data in an attempt to spot trends, and some simply do not have the expertise in-house to do so. A comprehensive, integrated database combined with business intelligence allows marketers to gain a holistic view of trends and, when needed, drill down to identify performance and profitability for products and even distinct relationships. Sophisticated databases are often accompanied by predictive modeling tools, which enable smaller banks to access insights within their data, while helping larger institutions improve the effectiveness of marketing communications, see trends almost instantly and accelerate their time-to-market.
Improving visibility into insights across the enterprise allows a bank to understand: What products and services is my customer ready to buy next? What it their propensity to buy? Answering these questions through traditional means is not just difficult, it is nearly impossible. Instead, business intelligence and analytics tools can pinpoint tangible evidence within a bank’s data. This clarity not only helps identify who likely needs a new product, but also helps a bank make those offers to the right people with the right message, at the right time.
Something else in the marketing mix has to be right, too – the channel. Reaching target audiences via their preferred channels is a challenge heavily on the minds of marketing professionals. For in-branch interactions, marketing automation engines retrieve and match customer profiles to targeted offers. Yet, as we all know, fewer transactions are taking place within a bank’s physical location. Banks must bring the same level of customized, timely marketing to their email campaigns, websites, online banking portals and, of course, their mobile applications. According to an IBM Commerce 2015 study, the smartphone has become the omnipresent channel for sharing information, with 91% of consumers accessing their phones up to 150 times per day. Mobile is unquestionably becoming one of banking’s most important tools for reaching customers – wherever they are located or conducting their banking business.
This digital transformation exemplifies marketing’s evolution. While data analytics can identify who to reach and how, acting on this information typically requires banks to run concurrent campaigns. Scheduling tools can manage the complexity of leveraging multiple channels simultaneously, while ensuring messages reach the correct audience via the correct channel. Banks devoted to outdated matrixes and programing methods risk issuing conflicting communications, which can lead to messaging dissonance and potentially unravelling their efforts. The pervasiveness of mobile also forces banks to consider the aesthetics of their messages. Communications should leverage a responsive design – which enables content to be read on all devices – to ensure the customer experience remains consistent, regardless of the device being used.
Marketing is now about more than reaching audiences – it’s about nurturing relationships. This means engaging customers who have not yet demonstrated readiness to buy. Scheduling tools organize and automatically route messages, but also enable banks to turn marketing campaigns into stories built upon this philosophy of nurturing relationships. For instance, if a bank wants to reach young Millennials, it could distribute a customized message highlighting the need to think strategically about savings. Communications could follow about strategies to enrich personal savings.
Banks can continue to ask themselves how to react to customers’ needs in real time, but this is an age-old question with no single answer or silver bullet solution. Instead, banks should consider how to best engage customers and prospects and truly cultivate relationships. As marketing strategies become more multi-faceted, they must accompany strong marketing efficacy evaluations. Constant learning and improving comes from truly understanding how investments and initiatives tie back to revenue and profitability.
It is a new horizon for bank marketers. Technology grants them the ability to monitor and measure campaigns from the point of origination through revenue. Knowing with certainty when messages resonate – and when they do not – is no longer a wish list item for banks, but a competitive must-have in today’s competitive environment.