Seven Steps for Identifying the Right Marketing Metrics

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1 WHITE PAPER Seven Steps for Identifying the Right Marketing Metrics FI Marketers Need Proven Metrics to Justify Budgets & Value

2 FINANCIAL BRAND MARKETING SURVEY 15 % WE HAVE A GOOD IDEA HOW MUCH WE GET FOR OUR MARKETING INVESTMENTS 10 % WHITE PAPER Seven Steps for Identifying the Right Marketing Metrics Gone are the days when marketing gauged its worth by the volume of ads, marketing materials and promotional content it pumped into the sales stream. These days, if you want a reasonable marketing budget, you ll have to prove you deserve it. CFOs and CEOs expect quantifiable evidence that your efforts support the KPIs of the institution, and that they yield a respectable ROI. If marketers cannot make this case, the marketing function will forever be considered an overhead expense, rather than a powerful cylinder in the revenue engine. The problem is, most marketers don t believe they have the information they need to build a business case that conveys their value and justifies their budget. In a 2013 study by The Financial Brand, only 15 percent of bank and credit union marketers said they have a good idea how much value they get for their marketing investment. A mere six percent considered themselves very sophisticated with their marketing measurements. The bulk of marketers struggled or relied on guesswork. WE HAVE EXHAUSTIVE MARKETING METRICS AND TRACK EVERYTHING WE CAN The Financial Brand Marketing Survey Deluxe Enterprise Operations, LLC. All rights reserved. 2

3 WHITE PAPER Seven Steps for Identifying the Right Marketing Metrics I want to be able to make a business case for my budget so I am the one to set the number. Right now my marketing budget is dictated by the CEO and CFO. Bank CMO We have to show the CFO that there is scientific evidence and solid strategy behind our marketing decisions. That s how we earn more C-suite credibility. Deluxe Marketing Services Strategist The Good News Marketing Measurement has come a long way and is now easier than ever. Because of advances in technology, data-management, analytics, and marketing providers who build measurement into every campaign, it is no longer a burden to track marketing effectiveness against the institution s KPIs. Nor is it difficult to establish ROI. Want to do a better job measuring metrics at your financial institution? Here s a best-practices approach to getting started. 0.1 % THE FINANCIAL BRAND RECOMMENDS A MARKETING INVESTMENT THAT IS APPROXIMATELY EQUIVALENT TO 0.1 PERCENT OF A RETAIL FINANCIAL INSTITUTION S ASSETS. 5THE MOST MANAGEABLE NUMBER OF METRICS, ACCORDING TO BUSINESS EXPERTS. Deluxe Enterprise Operations, LLC. All rights reserved. 3

4 THE 5 STAGES OF MARKETING ACCOUNTABILITY 1 DENIAL MARKETING IS AN ART, NOT A SCIENCE. IT CAN T BE MEASURED. THE RESULTS WILL COME; TRUST ME! 2 FEAR WHAT IF MY MARKETING ACTIVITIES DON T IMPACT THE BOTTOM LINE? WILL I LOSE MY JOB? 3 CONFUSION I KNOW I SHOULD MEASURE MARKETING RESULTS, BUT I JUST DON T KNOW HOW. WHITE PAPER Seven Steps for Identifying the Right Marketing Metrics Step One: Embrace Accountability Justifying marketing s value and budget is, at its core, an exercise in accepting personal accountability. For most marketers, accepting accountability for their performance means that they will: Establish performance metrics that directly support business KPIs Measure marketing strategies and tactics quantitatively Use relevant performance data to strive for continuous improvement Ensure the company s money is spent on the right strategies and tactics The Definitive Guide to Marketing Metrics and Analytics by Marketo, a strategic marketing firm, suggests that denial, fear, and confusion get in the way of accepting accountability. 4 SELF-PROMOTION HEY, COME LOOK AT ALL THESE CHARTS AND GRAPHS! 5 ACCOUNTABILITY REVENUE STARTS WITH MARKETING. Deluxe Enterprise Operations, LLC. All rights reserved. 4

5 TOP FIVE MARKETING METRICS COMMONLY USED BY FINANCIAL MARKETERS 1. Deposit/loan volume 2. Customer/member growth 3. Depth of relationship, share of wallet 4. Market share 5. Retention WHITE PAPER Seven Steps for Identifying the Right Marketing Metrics Step Two: Know What to Measure There are two categories of metrics that you will be expected to measure: Revenue metrics These are measures that show how your marketing efforts contribute to acquiring new accounts, selling more products and services, and anchoring or retaining existing accounts. Marketing program metrics These are measures that demonstrate the effectiveness of your specific campaigns and tactics so you know what is working, and what is not. Average balance per product Average total margin% per product. Number of (active) products per customer Number of customers per front line FTE. Cost per front line FTE. $2, % 3.6 1,578 $31,200 Source Accounts Opened Acquisition Cost % of Acquisitions SEM 26 $ % 7 Web Ad 9 $ % 12 Direct Mail 96 $ % 14 Radio 15 $ % 13 YouTube 7 $ % 21 Pandora 22 $ % 24 TV 11 $ % 16 Days to Close The Financial Brand Marketing Survey Deluxe Enterprise Operations, LLC. All rights reserved. 5

6 WHITE PAPER Seven Steps for Identifying the Right Marketing Metrics Step Three: Gain Leadership Agreement on Revenue Metrics It s crucial that the CFO and CEO see that marketing is strategically focused on the revenue goals of the institution. Once you understand your institution s revenue priorities and targets, you should discuss and agree upon metrics that will measure your contribution to these growth goals. For financial institutions, these are the most tried-and-true revenue metrics. Number of Leads Number of Conversions Conversion Time Nurturing Inquiries or new leads Conversions This is when Velocity Here s where Not ready to buy These The start of the consumers move to another you measure the time it are people who aren t qualification process. phase in the customer takes for qualified leads to ready to buy right now, Marketing reviews lifecycle and thus fall into a become account holders, or but who would be a good consumer data to see new campaign category. for account holders to move prospect later. whether the consumer is a legitimate prospect. Qualified leads These are consumers who already fit with your targeting strategy and possibly your to an onboarding, cross-sell, or loyalty phase. Typically, the higher the velocity, the higher the ROI of your campaign. Re-engagement People who, for whatever reason, fell out of your sales pipeline and need to be included as a prospect again. propensity-to-buy model. Deluxe Enterprise Operations, LLC. All rights reserved. 6

7 WHITE PAPER Seven Steps for Identifying the Right Marketing Metrics Step Four: Set Your Numbers When you know what metrics you will measure, the next step is to set goals for each metric. This process typically involves benchmarking. To set the right goals, it s best to know how you are currently performing, as well as how you have performed in the past. If you do not have access to this type of history, your goals may have to be educated guesses based on best practices the first time around. Marketing Metrics & Analytics, The Definitive Guide Marketo.com Deluxe Enterprise Operations, LLC. All rights reserved. 7

8 DELUXE BEST PRACTICE MARKETING IS A LONG-TERM INVESTMENT, SO TRACK YOUR MARKETING REVENUE METRICS AS YOU WOULD TRACK STOCK PERFORMANCE AS A TREND LINE New Accounts Projected WHITE PAPER Seven Steps for Identifying the Right Marketing Metrics Step Five: Map Your Revenue Metrics Many marketing plans are represented in a spreadsheet or pages of text. An emerging best practice is to include a flow chart or diagram of how the strategies and tactics in the marketing plan map their way back to the institution s revenue goals. Your visual aid can also help manage expectations regarding timing and expected results. In many ways, marketing is a long-term investment. Some campaigns will not pay dividends right away. Explain how frequently you will measure each metric, and how you will show ongoing progress toward goals Q1 Q2 Q3 Q4 Deluxe Enterprise Operations, LLC. All rights reserved. 8

9 DATA NEEDED TO SUCCEED WHITE PAPER Seven Steps for Identifying the Right Marketing Metrics Step Six: Prepare the Marketing Organization to Succeed CAMPAIGN EXECUTION, INCLUDING CONTENT, DESIGN AND DISTRIBUTION CUSTOMER DEMOGRAPHIC AND BEHAVIORAL DATA ANALYTICS AND PREDICTIVE MODELING To be able to achieve the revenue metrics established for your team, you will need to tune up your marketing engine for optimal performance. For example, Deluxe Marketing Services recommends that you review your access to high quality: Customer demographic and behavioral data Analytics and predictive modeling Measurement and tracking technologies Performance reporting Campaign execution, including content, design and distribution PERFORMANCE REPORTING MEASUREMENT AND TRACKING TECHNOLOGIES Most financial institutions outsource one or more of these capabilities. As a best practice, outsource to a company that specialize in financial institution marketing. These companies have a deep understanding of the relationships consumers have with their banks and credit unions. Deluxe Enterprise Operations, LLC. All rights reserved. 9

10 WHITE PAPER Seven Steps for Identifying the Right Marketing Metrics Step Seven: Establish Marketing Program Metrics Yes, you need another set of metrics. However, these behind-the-scenes measurements will help your marketing organization understand what is working and what is not. These metrics are tools to guide your decisionmaking about future campaigns and approaches. While there are dozens of possible metrics from which to choose, the following categories tend to surface to the top, primarily because they are helpful in calculating campaign ROI. Leads Technology and automation can help you track metrics such as the number of prospects a campaign has generated, which campaign channels are most effective, and whether a lead was recruited or came in on its own. Benchmarks Comparing your work to industry averages provides insight into how well your programs and campaigns are performing. In general, you are trying to achieve lift over last, which means that your campaigns are showing continuous improvement. In tracking lift, most institutions try to track response rates in terms of: Offers accepted/coupons redeemed Calls to designated phone number opens & click-throughs Visits to web pages (URLs, PURLs, campaign landing pages) Time spent on web pages Deluxe Enterprise Operations, LLC. All rights reserved. 10

11 LIKE TO IMPRESS? STAY AWAY FROM METRICS SUCH AS NUMBER OF LIKES, CLICKS AND DOWNLOADS. THEY MAY BE EASY TO MEASURE, BUT THEY DON T SHOW THE CEO AND CFO HOW YOU ARE SUPPORTING REVENUE GROWTH. WHITE PAPER Seven Steps for Identifying the Right Marketing Metrics Content downloads Form completions (and abandonment) Outbound more information requests from website Social Media Many financial institutions track social media activity because it is easy. However, the jury is out on how the number of Likes on Facebook or followers on Twitter directly supports the quest for revenue. When it comes to social media, it may be wise to consult a specialized marketing provider about ways to integrate trackable social media elements into your lead-generation and product-marketing campaigns. If you go this route, you may be able to establish truly meaningful metrics. Data Integrity To achieve continuous improvement in your marketing campaigns, your data has to be fresh and accurate. Metrics that relate to the performance of your lists can illuminate serious issues. According to Deluxe Marketing Services, many banks choose to outsource the data and database-management capability because of economies of scale. Rather than purchase and maintain these immense systems on their own, it is more cost effective to use a specialized provider who can integrate the institution s CRM data with their own massive data warehouse. Specialized providers also tend to have the industry s top experts on analytics and modeling. They can sort through all the data elements, giving them the proper context, and then weighting them for segmentation and targeting. After all, if you have accurate lists, but your targeting is off, you won t achieve expected response rates. Deluxe Enterprise Operations, LLC. All rights reserved. 11

12 WHITE PAPER Seven Steps for Identifying the Right Marketing Metrics How You Can Make the Seven Steps Even Easier Each marketing department has its own unique set of resources and resource gaps. You may have a powerful database, but lack talented statisticians. You may have a brilliant in-house design department, but lack campaign management technology. To achieve your established metrics, you will need to begin filling your gaps right away whether it means hiring, buying, or outsourcing. If you would like to talk about what is right for your financial institution, please feel free to call Deluxe Marketing Services. As full-service marketing experts, they can help you come up with the best way to justify your value and budget through proven metrics. WANT MORE INFORMATION ABOUT DELUXE MARKETING SERVICES? Contact us today. DeluxeFinancialServices@deluxe.com SEARCH fi.deluxe.com/acquire/acquisition-programs/ CALL Listen. Solve. Deliver. Deluxe Enterprise Operations, LLC. All rights reserved. 12

13 WHITE PAPER Seven Steps for Identifying the Right Marketing Metrics About Deluxe Since 1915, Deluxe has been working hard as a partner for financial institutions to drive deeper customer engagement and more profitable revenue. As the financial services industry has evolved, Deluxe has been an active participant in shaping it with the calm assurance of a company that has done it before. Today, thanks to collaboration, innovation, and acquisition, Deluxe has an evergrowing portfolio of retail and commercial banking FinTech solutions focused on helping our clients manage the customer lifecycle acquire, onboard, engage, and operate. Our growing array of inventive, client-inspired solutions are designed to help our clients grow in a changing, competitive landscape: Data and Analytics Digital Channels Marketing Services Performance Management Rewards and Loyalty Fraud and Risk Solutions Check Programs Learn more at fi.deluxe.com Follow us on our Forward Banker blog Deluxe Enterprise Operations, LLC. All rights reserved. 13