The report: Five ways financial institutions can maximize returns on marketing spend
Source: Visa
Executive Summary
In a new report, Visa Advisory Services focuses on five strategic imperatives for financial institutions who are under pressure to optimize their marketing investments and maximize returns.
By supplementing internal data with external sources, financial institutions can develop more precise customer segmentation and deliver more relevant content. Implementing contextualized customer journeys enables real-time, personalized experiences that increase engagement and loyalty. Continuous monitoring and a test-and-learn approach allow for rapid optimization of marketing initiatives. Emphasizing operational excellence in campaign execution is crucial for success, as is leveraging sponsorship properties to amplify marketing messages. Finally, financial institutions should look for ways to leverage often overlooked opportunities to amplify message and extend reach – through sponsorship and partnership programs, for example.
By yoking together these strategies, financial institutions can make more efficient use of their marketing funds and create long-term value for customers – and (as the report puts it) “send the right message to the right audience to prompt the right action”.
Why we picked this report: While the insights and case studies are drawn from the experience of Visa itself and its partner financial institutions in payments, the recommendations are a concise and focused set of lessons applicable to all financial institutions and all product groups.
Key Takeaways:
- Integrating external data with internal datasets enables more accurate customer segmentation and personalized marketing, potentially tripling campaign effectiveness.
- Contextualized customer journeys, delivering real-time personalized messages, can significantly boost engagement and loyalty, with one example showing a 15% increase in incremental cross-border spend.
- Continuous evaluation and a test-and-learn approach are crucial for optimizing marketing performance, allowing financial institutions to refine strategies based on data-driven insights.
- The quality of campaign execution is as important as strategy and creativity, with proper implementation potentially increasing activation rates by 5.6% and early transactions by 13.7%.
- Leveraging sponsorship properties through network partners can cost-effectively amplify marketing messages and extend reach, creating memorable customer experiences.
What we liked about this report: Its emphasis on both continuous evaluation and rigorous execution is a welcome counterpoint to many other reports that obsess on shiny technologies and vague strategies. And the performance gains cited in the report’s case studies are often modest, setting refreshingly realistic expectations.
For example, while supplementing transactional and demographic datasets with channel interaction data in one Visa campaign led to a threefold increase in incremental payment volume and associated revenue, other case studies cited include.
- A granular and highly personalized segmentation strategy that successfully recovered 10% of at-risk revenue in another campaign.
- An FI which reduced transactions declined due to insufficient funds by 1.5 to 3.0 percentage points in the month following a targeted communication campaign.
- A contextualized communication approach offering travel-related benefits that generated 15% incremental cross-border spend during customers’ travel periods.
- Implementation of a rigorous early-months-on-book (EMOB) program which increased activation rates by 5.6% and boosted incremental transactions in the first 90 days by 13.7%.
What we didn’t: A few more case studies would have really nailed the argument.
Maximizing Marketing Returns for Financial Institutions
Leveraging data for precision marketing. Financial institutions possess vast amounts of customer data, but relying solely on internal data limits their marketing potential. By integrating external data sources, financial institutions can create a more holistic view of their customers, enabling advanced analytical models and precise segmentation. This approach allows for the delivery of personalized, relevant content to well-defined customer segments.
Key ways to leverage external data include:
- Driving channel segmentation: Analyzing online activity data helps determine consumer preferences and most effective communication channels, improving customer experience and engagement.
- Integrating diverse transactional data: Combining data from multiple sources enables more accurate customer personas and micro-segmentations, reflecting individual preferences and spending habits.
- Enabling non-traditional campaigns: Data analysis can uncover unique opportunities, such as targeting customers who recently experienced transaction declines to explain the cause and prevent future occurrences.
Enhancing customer experience through contextualization. Contextualized customer journeys represent a shift from generic communication to real-time, personalized, omni-channel experiences. By analyzing opted-in customer data, financial institutions can engage customers at moments when positive responses are most likely. This approach involves predicting customer preferences and delivering highly relevant messages based on an individual’s current situation or context.
Examples include offering travel insurance discounts to customers who have just booked flights or promoting nearby restaurants to those who have completed transactions in the area. Such contextualized messages are not only relevant but timely, increasing the likelihood of customer engagement.
The benefits of this approach include:
- Enhanced customer experience through meaningful, personalized interactions
- Increased engagement and conversion rates
- Boosted customer loyalty
Optimizing performance through continuous monitoring. Constant evaluation of results is crucial for successful marketing strategies. Campaign measurements provide valuable insights into the effectiveness of initiatives, allowing financial institutions to identify which activities are successful and which need improvement. The ability to identify the right metrics, methodology, and key performance indicators (KPIs) is essential for implementing a continuous test-and-learn improvement cycle.
The test-and-learn approach helps banks and credit unions answer three key questions:
- What impact will a campaign have if executed across the entire target segment?
- Will the campaign have a bigger impact on some customers than others?
- Which campaign components are working best?
This iterative process of testing, learning, and improving is fundamental to achieving marketing efficiency and effectiveness.
Executing with excellence. Operational excellence in campaign execution is as critical as strategy and creativity. Financial institutions should focus on efficient and effective execution by establishing control points, defining roles and responsibilities, setting service-level agreements, and fostering a culture of continuous improvement.
To guarantee quality, efficiency, and timely campaign execution, banks and credit unions should:
- Establish control points within the campaign design and implementation process
- Clearly define roles and responsibilities for all involved teams
- Set service-level agreements (SLAs) for each team’s contributions
- Implement actions to reduce errors and to avoid inefficiencies
- Encourage and enable teams to take accountability
- Foster a culture of continuous improvement.
Amplifying reach: Finally, financial institutions have an often-overlooked opportunity to amplify their message and extend their reach by leveraging sponsorship properties available through network partners and vendors. These partnerships enable financial institutions to associate their brands with events or initiatives that would otherwise be beyond their reach, creating memorable experiences and strong ties with customers.
By implementing these strategies, financial institutions can make the most effective use of their marketing funds, driving customer acquisition and engagement while creating long-term value for customers and fostering sustainable business growth.
Editor’s note: This article was prepared with AI language software and edited for clarity and accuracy by The Financial Brand editorial team.