April 4, 2019 in Financial Marketing
Five Crucial Analytics Capabilities for Financial Marketing Success
Selecting the right analytics platform can be a challenge, especially in a fiercely competitive landscape.
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https://doi.org/10.1287/LYTX.2019.03.03
For financial services marketers, the risk of falling behind in leveraging consumer insights has never been greater: Consumer demands have skyrocketed amid fierce and growing competition. Indeed, a David and Goliath collision course is now underway, pitting legacy banks that rely on massive infrastructures, brand recognition and physical locations, against a new breed of banks that boast convenient digital services and strong marketing strategies.
To respond to this dramatic shift in the marketplace, financial institutions have embraced the trend of consumerization, borne out of technological advancements allowing consumers to play a more active role in choosing a bank based on service and product offerings. No longer confined to local branches, consumers have embraced the freedom and convenience of mobile and online banking to make real-time transactions from any location. Financial institutions that cannot offer consumer-focused services are missing a huge opportunity and face a loss of market share.
This consumer-centric approach has also changed marketing strategies. Financial services firms must now take an omnichannel marketing approach, providing tailored messaging across different media based on consumer interests to create the best overall experience. The tactics used to accomplish this goal vary widely by institution.
Marketing Strategies in Financial Services
Banks and financial services firms have invested heavily in marketing, with the top 40 U.S. banks spending $14 billion in 2017 alone. In the same year, 30 of the 40 largest banks reported growth in marketing spend.
Much of this spend has been focused on digital tactics such as social media marketing, content creation, and mobile and web ads. Moreover, 67 percent of CMOs cited plans to increase digital spending this past year. While marketing efforts are primarily focused online, financial services firms also spend to a lesser extent on traditional offline media such as television or print.
Of course, the key driver for increased ad spend is success; indeed, data shows that overall performance is related to the amount of money banks spend on marketing. Here’s the catch: Even though the relationship between marketing spend and overall performance is positive, it does not mean that every campaign is a success.
The reality is that financial marketing teams investing heavily in marketing and ad placement must optimize their investments by understanding precisely what drives consumers to use their services. Otherwise, they risk wasting a large portion of their budget on ads that go unseen or ignored.
The Need for Better Marketing Analytics
Obtaining accurate and timely attribution and engagement analytics has long been a challenge for marketers. For online efforts, depending on the attribution model used, marketers focus on different metrics and weigh the value of certain channels and engagements separately. Offline channels are tracked using aggregate measurements that do not provide granular data, making it challenging to correlate with online efforts.
Today, 22 percent of marketing budget is devoted to MarTech and rightly so. As financial firms hone their marketing skills, they must determine which campaigns produce results, and which are a total waste. CRM and email tools alone don’t do the job. Transforming marketing data into opportunity requires an analytics platform capable of collecting and correlating big data and converting it into actionable insights fast, informing online and offline efforts based on who is targeted, what channels are used and when ads will run.
Five Features Financial Firms Need from Platforms
Selecting the right analytics platform is not as simple as it seems. Marketers must ensure that the platform delivers several key capabilities to maximize investments and provide actionable insights. The five key features include the following:
1. Processing power. First, a modern marketing analytics platform must have immense processing power in order to distill the massive volume of campaign data. Every documented click, view and impression results in vast quantities of data that would take far too long to sift through before deriving any insights at all. The best analytics platform can easily collect and distill this big data into digestible metrics that inform campaign decisions.
2. Real-time insights. Furthermore, the platform must quickly produce actionable data, allowing marketers to make in-flight optimizations based on evolving consumer behavior. If a certain channel is no longer favored among consumers or fails to drive results, marketers cannot wait until the end of the campaign to find out. Rather, they must quickly leverage insights to determine where spend should be shifted to ensure they are maximizing ROI.
3. Unified measurement. A successful analytics platform leverages unified measurement to provide a cohesive view into all campaigns across channels and how they are performing. Marketers track engagement analytics from multiple campaigns running on different channels, often with separate measurement models. For a holistic view, this offline and online data must be correlated into a single, granular view of marketing impact. Unified measurement arms marketers with insights on performance that facilitate fast optimizations.
4. Person-level data. In the age of consumerization, it is more important than ever to customize campaigns to customer behavior. That’s where granular, person-level data helps marketers win big. Person-level insights help inform strategy with specific consumers in mind, reaching them at the right place and time, with the right message.
For online campaigns, person-level data is far easier to collect. However, offline media such as television, print and radio rely on long-term, aggregate measurements. To gain the person-level edge, marketers must leverage information such as print subscriber lists, radio broadcast ZIP code data, TV box top and smart TV data. This information can be cross referenced with campaign engagements to get the most accurate, consumer-level information.
5. Brand and creative measurements. Last but not least comes the ability to perform tests. This is the most effective way to understand how less tangible elements factor into the campaign success. Specifically, an exceptional analytics platform offers insight into how brand perception contributes to a purchase decision. This is especially crucial in finance, where many campaigns focus on brand building because consumers have strong interest in brand authority and trustworthiness.
In addition to measuring brand, analytics platforms must also be able to test and measure the impact of creative elements. Even if an ad displays on the right channel at the right time, if the message does not engage the consumer, it will not drive results. Creative measurements will allow marketing teams to more effectively align campaigns to resonate with target audiences.
Final Thoughts
In a competitive industry disrupted by rapidly evolving consumer behavior, financial services institutions are under immense pressure to maintain market share. On the marketing front, this means focusing on the consumer with a well-informed, customized omnichannel strategy. Despite the challenges, analytics plays a central role in optimizing the delivery of a positive consumer experience in real time across a wide variety of channels. Financial institutions that invest in the very best data analytics platform that delivers processing power, real-time insights, unified measurement, person-level data and brand insights will produce exceptional consumer experiences that drive success. The digital consumer demands this level of experience, and the future of banking depends on meeting this challenge.
Andy Cheong is the product marketing director at Marketing Evolution. An experienced enterprise solutions leader with 19+ years of experience in software and management consulting industries, Cheong focuses on solution development and growth strategy through innovation and market alignment.