Jump forward two decades and the tools for marketing measurement are plentiful, but the challenges for measurement have also increased exponentially. In many cases, however, it is not so much the ability to measure as it is that most bankers are not speaking the same language that the CEO and CFO want to hear.
At a time when legislation has dramatically impacted the bottom lines of most banks, CEOs and CFOs are interested in metrics that frame marketing investment and results in terms like revenue, profitability and growth. And more often than not, they want results in terms of incremental improvement over business as usual.
Unfortunately, even when hard numbers are provided (which isn't often enough), the perception of the credibility of the numbers still biases the go/no go decisioning for further investment in marketing initiatives.
This view of success is very well described by Pat LaPointe in his Marketing Measurement Today blog, where he illustrates the relationship between values created against resources consumed, where insights are transformed into action and where the perception of measurement quality (many times viewed as the 'so what's') provides the motivation for future action. Pat used the following equation to illustrate his point.
Instead of going through all of the measurements that should be done, what are some of the ways current metrics should be adjusted in order to become more relevant in today's banking environment and to be of higher value to the CEO, CFO and organization as a whole?
- Measure Marketing Impact Against Corporate Goals: Instead of looking at metrics like awareness, response rates, share of wallet or even sales, change the context of the results delivered to include revenues, lifetime value and net present value. These monetary measurements are much more in alignment with the numbers provided on quarterly and annual reports and can be used to generate a Return on Marketing Investment (ROMI).
- Focus on Sales Effectiveness: In a more complex sales cycle associated with an internal sales force (mortgage lending, small business, commercial, corporate, trust, investment services, etc.), marketing needs to stay engaged beyond simply the lead generation phase. In consumer and retail banking, marketing must focus on the engagement of the newly acquired customer as well as the retention of that household. Instead of just measuring leads generated or sales converted, forecast metrics should be used that provide a look into the future value of the relationship based on the customer's level of engagement and loyalty.
- Communication Touchpoint Attribution: According to Forrester Research, with so many marketing channels currently being used, last-touch methods of allocating results to channels are outdated and could lead to a suboptimal marketing mix. In my travels, channel attribution is the holy grail of marketing measurement, where results are either not tracked or results are tracked and allocated to every communication channel. Bank marketers need better tracking methods that look at the customer decision process while serving multiple channel owners who will debate over response ownership. Otherwise, management will get an incomplete (or inaccurate) view of marketing and channel effectiveness.
- Fight the Tough Battles: Be willing to fight the tough battles that come with siloed organizations. Even when money has been budgeted to support a product or service area, the results of marketing initiatives may indicate the need for discontinuation or reduction in future investment. Another battle may loom with your database or analysis team as you attempt to get timely reporting.
With every dollar spent by a bank being highly scrutinized, it is imperative that bank marketers take a leadership role as a strategic advisor to drive revenue growth and cost reduction. By doing so, marketing budgets will be less at risk and marketing departments can be viewed as a source of future revenues as opposed to being a cost center.
How are you measuring results of your programs using metrics that matter to your CEO and CFO?