For the financial services industry, achieving effective marketing spend is more important than ever – especially now that banks and other financial organizations have to appeal to customers for whom digital channels (such as mobile, video and social) are second nature. A lot of banks still follow the traditional mindset that marketing is about boosting awareness, first and foremost. But with the wealth of technology and data that is available nowadays, it is crucial that banks utilize their spend to also drive other areas of the sales funnel, such as consideration, usage and loyalty. There is little logic in a leading multinational bank that is well known across its target markets spending 60 percent of its budget on awareness, for example – its priority would probably be loyalty, and its marketing spend should reflect this.
So, here are three steps banks can take to measure effectiveness and drive change with business leaders to ensure their marketing spend is aligned with their business priorities.
1. Look at what you already have – with a marketing budget breakdown
Before you do anything else, you should break down your existing approach. Outline exactly how your marketing spend is being allocated (i.e. how much of it is being invested into each market or segment), and plot this information against the potential business opportunities within those markets or segments. Doing this will help you identify whether you are over or underinvesting in particular areas. You might find that you are allocating the majority of the marketing spend to China, for example, even though China may offer the least chance of business for your company. Likewise, you may be underinvesting in say the affluent segment, though it actually has huge potential for your business.
Once you know that your marketing spend aligns with your priority markets and segments, examine how it is being used within each one. Say you spend the majority of your marketing budget for the US on improving awareness and consideration, despite the fact that you have a 95 percent awareness rate and a low conversion rate there. It would make sense to reallocate some of that budget to driving conversion, as this is the area that is currently in the greatest need of investment. By doing this for each of the markets and segments, you can ensure your overall marketing spend is aligned with the current challenges and opportunities for the business globally.
2. Evaluate effectiveness of your marketing spent
After you have fully analyzed your current marketing activities across your markets and segments, it is important to evaluate the effectiveness of your efforts at each stage of the sales funnel (awareness, consideration, usage and loyalty). To do so, choose which framework you are going to use to compare with cost – e.g. the sales funnel or the customer decision journey. You also need to define the metrics you’re going to use to measure effectiveness (this could include cost-per-reach and conversion to the next stage of the funnel). Then, choose a major market that has a high current or planned spend with your company, and plot your marketing activities accordingly. It may not always be possible to analyze data with 100 percent accuracy, and some estimates may be needed, but you will get a good idea of your marketing effectiveness at different stages of the sales funnel or the customer journey.
3. Build new foundations for the future – your marketing strategy roadmap
In order to achieve marketing spend effectiveness that is sustainable for the future, you need to make decisions about what change needs to look like for your budgeting and planning processes. What needs to be tracked? Who should track it? What is the review process for ensuring data insight is captured and actioned? These are all questions you should be asking when it comes to building foundations for the future.
Financial organizations can only build successful foundations if they know exactly where investment is going. As well as identifying all areas of spend within the company, they should track how clients interact with the brand, and how their buying behavior changes across different channels. For transparency’s sake, it is crucial to use metrics that distinguish between maintenance and growth investments, and proven and experimental activities. With an increasing share of digital marketing activities, tracking and analysis of these metrics will become more feasible. The art though will remain to get a holistic view on the effectiveness of your overall spend in a market or segment from all marketing activities including less tangible activities like events and sponsoring.
Isolate key drivers
Once you know the biggest drivers of your marketing efforts, track the impact of them across different customer segments and media channels, and make it possible for your teams to carry out scenario-planning for marketing spend in the future (taking into account variables like cost-effectiveness and risk).
Align all aspects of marketing activities
Ensuring efficiency is all about knowing the purpose of every action and process. You might decide that business intelligence and automation have a place within your future marketing mix, for example. Whatever solutions you decide to use, you should consider whether it should stay in-house, or be outsourced. Above all, make sure everyone in the company is clear about the roles, processes, systems and responsibilities of your marketing activities.
By taking these three steps into account, banks should be able to boost the effectiveness of their marketing spend. At a-connect, our independent professionals help with everything from the re-allocation of budget in line with business priorities and boosting insight into the sales funnel to demonstrating the effectiveness of various marketing tools. Learn more about the expertise of our consultants here.