It’s said that if you don’t know where you’re going, any road will get you there. This is certainly true for financial marketers. Digital-only institutions, traditional banks, credit unions, and other new market entities are all vying for the same customers.
Bank and credit union marketing leaders are being asked to raise their game as the stakes get higher, but without proper data analysis in place, they will not be able to target key retention segments, identify at-risk relationships, or understand key customer preferences and move to a behavior-based targeting model.
Here are four strategies for organizing and using bank data that will help your marketing investment deliver a positive return that is strategic and sustainable.
1. Work Across Business Lines to Build a Business Case
If there isn’t already a formal process in place, establish a data strategy and governance process. If one already exists, ensure that marketing is not only at the table for these key discussions, but also participating vigorously. While banks and credit unions can benefit from a solution in multiple areas, marketing must align solution investment recommendations with bank strategy and measurable payback projections.
“If an institution implements too many point solutions, it may not have a clear ROI.”
— Rick Hall, BKM Marketing
In recent months, we’ve seen a need in the vendor-selection process to address more than just a line-of-business solution. This is because there are more point solutions for financial institutions to sift through than ever. However, if an institution implements too many of these solutions, it may not have a clear ROI. Additionally, we’re seeing banks and credit unions suffer from a “source of real truth” scenario, where data is sourced inconsistently or improperly applied to give sound analysis to leadership across initiatives. Therefore, institutions need to have normalized data used across all solutions and tools.
Marketing programs, which are not linear, will benefit multiple stakeholders when they’re executed effectively. While marketing might drive the execution of these programs, the impetus for initiating them is based on needs — deposits, loans, deeper relationships, new relationships, retail, business, non-interest income, etc. The benefit is corporate, rather than just collecting responses and digital conversions, and a solid business case will reflect the totality of this potential upside.
U.S. Bank, for example, uses the data mined from multiple consumer touchpoints so it remains in step with the customer’s life journey. Rather than starting from square one with each call, every interaction with the individual customer provides information that the bank uses to keep interactions frictionless. As customers pass key milestones — such as a marriage or a new baby — U.S. Bank determines data patterns that it can use to predict financial needs and provide enhanced customer service.
2. Establish a Marketing Point Of View Around Data
Too often, special interests and pet projects wear the guise of data strategy, but their scope is often too broad or narrow to benefit the institution. Once these pet projects launch, it’s often too late to stop them. For example, many banks and credit unions use a blend of modified CRM tools with different spreadsheets and back-office tracking tools to gather data. However, these tools are often disparate and don’t work together efficiently to produce ROI.
If a proposed data strategy initiative won’t deliver measurable outcomes, it’s not a good strategy. Data is now being employed to drive improved customer retention, marketing insights, product innovation and development, and risk management. In fact, larger banks are rapidly deploying data to work in the development of real-time risk analysis.
Clearly, data is the make-or-break factor for banks today, and the path to success for financial marketers will be defined by the ability to obtain and analyze clean data and act on it. Invest the time and effort to ensure that data is normalized, clean, and reusable, and always vet potential marketing vendors for their data strategy.
ING’s Wholesale Banking Advanced Analytics department combines payment, client, and credit information to create a network view of its clients. This informs the sales team on its clients while also providing data to the risk department so it can improve its efficiency.
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3. Align Marketing Efforts With Performance Indicators and Track Progress
Nothing gets funded faster than a business case built on facts and documented results. Begin with articulating why you are building the case; then, include historical data, new strategic demands, and market-supporting elements.
Start tracking key activities now, and build that practice into all of your marketing processes. Data from new customers, campaign results, and market penetration will help confirm your seat at the decision-making table. And analytics aren’t just your guiding light as a marketer in the short term; they provide a source of true value to your institution’s long-term growth objectives.
First Horizon Bank, formerly First Tennessee Bank, is one organization that has been able to use data to elevate its marketing strategy — specifically by gathering and acting on predictive customer insights based on buying behavior, social media presence, and web activity. Since the bank used this data to inform its marketing strategy, it has seen a 600% return on its marketing investment. Plus, the bank’s campaigns saw a 3% increase in response rates because the offers were more targeted.
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4. Make Communication a Strategy
All too often, marketing teams fail to establish a strong presence and voice among leadership. Marketing should be at the table for asset-liability strategies, product-development objectives, and associated technology planning.
This needs to happen in addition to presenting a strong voice on customer preferences and trends and traditional marketing agendas, such as campaign responses. If you don’t communicate successes and failures in market, preference, and channel-usage shifts and continue to iterate, you’ll miss key opportunities to influence strategic direction and deliver beyond the needs of the balance sheet.
Communication is not only an important trait to possess, but it’s also a strategy. It’s the foundation for what differentiates a successful model from less successful institutions. If communication fails, your strategy often follows.
Financial marketers have more of a bird’s-eye view of balance sheet influences than they realize. With some adjustment and expansion of focus, insight, and expertise, marketing teams can fulfill, and even surpass, leadership and board expectations. Smart leadership understands that marketing can play a significant role in building an institution’s profit and success if that role incorporates critical data insights into strategic execution and demonstrates results.