Financial marketers must acquire more accounts through digital channels. Here are the numbers you need to know to hone your strategy and budget.
We have a saying at Radius Bank when it comes to results: Know your numbers. If you don’t, how can you possibly show that your new content, media plan and messaging are working year over year? Or make a solid case for a bigger marketing budget next year?
But just knowing the number of impressions your campaign generated, your click-through rate and your cost per click/impression is not enough. These metrics all measure how you optimize your media strategy. They help you with interdepartmental communications — establishing goals and budgets — but they do not show your true sales value to the organization. It’s no wonder your CEO denies your requests for extra funds for digital channels when you aren’t showing them the numbers that matter. It’s about conversions — how many people successfully complete an application for a loan or new account, and then how many of those relationships are activated.
Let’s take consumer deposits for instance. You need to acquire more accounts through digital channels. Here’s what you need to analyze — the numbers you need to know — to hone your strategy and budget.
1. Applications Started
The epicenter of any acquisition campaign should be the application. Every decision you make when trying to increase deposit relationships should tie back to your application numbers. Even better, every single online application should be attributed to a specific lead source to track successful conversions from each media outlet.
# Applications Started — At the very least, you need to understand how many applicants intended to open an application. This is a true measure of interest in the accounts offered by your institution because it shows you if your ads, landing pages and messaging is working (regardless of the ultimate outcome). You can also calculate your conversion rate by dividing the number of applications started by the number of people who clicked on your ads to land at your application page.
# of Accounts Opened — It’s critical to know how many accounts your digital marketing efforts generate. This is the real value: net new relationships. You might find that it takes three, four or even five applications for every one that turns into an actual account.
% Applications Declined — Applications can be declined for a number of reasons, including suspected fraud, poor credit history, poor money management and other indicators. In the world of online account opening, identity verification (or lack thereof) can also account for applications being declined. Knowing the number of applications declined and the reasons behind those denials can be useful for marketers — Are we targeting the right audience? Do we need to change our message? Or them medium?
Open Rate — Knowing your all-in open rate (the percentage of applications that turn into real accounts) can tell you a number of things, particularly how easy/difficult the account-opening process is. How quickly do people get through the process? If most people stop on a certain point or page, you need to address the roadblocks and make it easier for applicants. If your goal is to open X accounts, you’ll need to know how many applications you’ll need to drive in order to get to that number of accounts. And if you know your click-through and conversion rates, you can reverse-engineer the number of impressions you’ll need to generate the desired results.
2. Acquisition Costs
Cost Per Application Started — Remember when we talked about lead sources? Breaking out the cost-per-application-started then attributing it back to specific media outlets will help you make the case for more money in the future. This metric will also help you determine which media outlets are cost-effective and which ones cost too much money for the same result.
One caveat to this metric: you must know whether or not other media outlets also contributed to successful conversions. It’s critical to use Google Analytics or a similar platform to determine if other media assisted in your conversions. For example, some application could be attributed to Yahoo! Search, but the analytics data might also show that the same applicant saw social media ads and did multiple organic searches before making the decision to start the application. Attribution models (rules that give credit to various media outlets before a final conversion) should be built to help you record assisted conversions. Examples of attribution models include last interaction, first interaction, linear and time decay.
Cost Per Account Opened — Another good metric to calculate is your Cost Per Account Opened, so you can find out if one media outlet provides more qualified leads than others. For example, you might discover that more applicants come from Google Search get declined versus applicants that come from a rate comparison website.
3. Account Balances
Average Account Balances — Marketing analytics should not stop at the point at which an account is opened. In fact, analyzing and truly understanding customer account balances can prove to be your biggest asset when discussing a budget for client acquisition. It’s not just about the number of accounts opened. It is much more substantial to show the increase in deposits per account over time.
Total Deposit Balance — Similar to account balance, it’s critical to understand a client’s total deposit balance even if you are marketing an individual account. By opening one checking account, a client could also be making rather large deposits in a savings account or using additional banking products that increase the overall profitability for the bank.