Harnessing the power of analytics to provide real customer insights
Harland Clarke
May 29, 2018
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Stephen Nikitas

By Stephen Nikitas, Senior Strategy Director at Harland Clarke

Everyone agrees marketing is an important driver of revenue growth, branding and acquisition, yet many financial institutions struggle to determine how much budget to allocate for this important function. Without the right analysis and metrics, making the case for higher budgets can be challenging.

Many companies that previously made investments in marketing are scaling back, often due to lack of metrics or being able to show that increasing spending directly brings in more revenue. Marketing budget levels are flat following three years of increases, according to the Gartner CMO Spend Survey 2017-2018. Budgets have dropped to 11.3% of revenue in 2017 from a high of 12.1% in 2016.

“Marketing leaders must now justify past budget commitments and show the returns they deliver to ensure the future fiscal health of marketing,” Chris Pemberton writes in his analysis of the results. In order to do that, marketers are allocating 9.2% of their budgets to analytics, according to the Gartner report, the most of any capability. That’s up from 2016-2017 when analytics was the fourth biggest allocation for marketers, underscoring the importance of insights on customer acquisition and retention as a way to maximize marketing spending.

 

Remaining competitive in a crowded financial services landscape

For financial institutions, marketers need to support overall metrics for credit, deposit and household growth, meaning that having industry-specific insights are critical for reaching the right target audience. Understanding customers need specific products and using data insights to offer them what they need, when they need it can significantly increase return on marketing investment.

Banks have the data to better understand customers, but many don’t have the analytics in place to create actionable information. To get better insights, they should look at analytics in key areas, including:

  • Portfolios: Examine household, deposit, loan and other income generators to improve acquisition, retention and cross selling.
  • Customer experience: Gather, measure and interpret feedback across channels and on a variety of interactions to understand where to focus improvement efforts.
  • Prospect experience: Use this information to ensure your institution is providing consistent experiences and branding across all channels.

Arming financial services marketers with the right data to make decisions about spending is critical. But it’s also important that they use metrics to continually evaluate campaigns. Some proven metrics to track are:

  • Profit/revenue
  • New account holders
  • First-year attrition
  • Net change in account holders
  • Cross-sell
  • Acquisition marketing versus overall budget

Many of these metrics look at how account holders conduct banking affairs, indicating the likelihood they have of purchasing additional products and services, or leaving. For example, those who use fewer products are at a higher risk of leaving, making retention an important metric.

 

Finding the right customers

Understanding the current and future customer potential by analyzing current account holders can shape smart retention campaigns, and looking at a demographic analysis of account holders against industry benchmarks can also identify gaps in the market to fill.

Having insights from deeper analysis yields real results for financial institutions. For example in a Harland Clarke case study, a $22 billion bank targeted current customers likely to respond to cross-selling materials with offers for checking accounts, savings accounts and loans. By delivering the right products and services to customers in a targeted manner, the bank saw a nearly 7% response rate for the campaign, adding more than $19 million in deposits and loan balances.

By prioritizing marketing campaigns based on strategic value and customer return profiles, marketers can optimize their budgets and show direct results to management teams and further justify marketing investment needs. Finding the right partner who can take data, interpret it and articulate what it means will help financial institutions create effective marketing initiatives that will support their growth.

 

About Stephen Nikitas

Stephen Nikitas has more than 30 years of experience in strategic planning, marketing, public relations and executive speechwriting. As Senior Strategy Director at Harland Clarke, he provides clients with consultative services, helping them craft marketing and retail strategies to take advantage of existing market and financial conditions while growing targeted portfolios.

Stephen speaks on a variety of topics, including loan portfolio growth, account holder retention and turning regulatory issues into opportunities.

 

About Harland Clarke

Harland Clarke is a leading provider of customer engagement solutions that help connect businesses and people how, when and where it matters. The company’s check, card, lifecycle marketing, contact center, transactional communication, treasury management, promotional product and GRC solutions help its clients and distribution partners optimize the quality of experience had by their customers. Visit www.harlandclarke.com