While many banks do a good job at marketing, few formally state their objectives each year and fewer still take the time to align them with management desires. This could be a mistake as bank marketers are coming under increasing pressure to be held more accountable and to measure their return. Therefore, it is more important than ever to have alignment as to maximize the marketing effort. In this article, we look at recent data to compare what management wants out of marketing and what marketing thinks management wants. The results are surprising and show a need for better alignment before 2019 kicks off.
Trade Desk and Forbes Insights recently polled more than 228 companies and asked their managers and their marketers what their top three goals are. As can be seen by the data below, while there is some alignment over objectives, such as new customer acquisition and retention, some objectives were wildly off.
Revenue: Standout discrepancies include management’s focus on driving top-line revenue as 53% of managers said this is important while only 35% of marketers rendered that answer. This is important to clarify as spending money on increasing deposit balances may not be as important as spending money to acquire new loans. Maybe marketing isn’t focused enough on the top line, or maybe management doesn’t desire the direct increase in revenue compared to enhancing margins. Whatever the case, this is likely the first conversation to have.
Increased Product Awareness: Similarly, many bank marketers said that increasing product awareness, particularly for loans and checking are among their top three goals. However, in the survey, only 7% of managers gave the answer.
Brand Awareness: Another major misalignment is when it comes to brand awareness. While increasing brand awareness was near the bottom of the list of management expectations, it was near the top of the marketing’s goals. Brand awareness is always difficult to measure and is usually done to promote the general “feeling” about a bank.
Efficiency / Cost Savings: Perhaps the most surprising outcome of the survey was the difference in management’s expectations (34%) and marketing’s expectations (19%) when it comes to obtaining marketing efficiency. Marketing found this the least importation of the eight objectives, while management ranked it fourth.
This speaks to the need for marketing to better track not just return on investment in marketing spend, but overall impact to the organization. This is worth clarifying within your bank as certain investments can have a low return on investment due to a higher expense, but have high impact on items like revenue.
Finally, this focus on cost savings by management also helps explain why more banks are investing in marketing technology (martech) and leverage such applications as CRM, email automation, display ad optimization, and SEO management. Banks are approaching the point where they will be spending more money on martech than compensation for marketing staff. It also explains why a vast majority of marketers (86%) will be increasing their spend on martech in 2019.
Putting This Into Action
Where your capital is allocated is one of the major decisions that bank managers need to make and marketing can help set those priorities. Understanding the relative importance of generating revenue compared to acquiring new customers, increasing margins, building a brand or retaining customers can make a huge difference in execution.
Bank marketing isn’t something that takes place as an afterthought in product execution. To be successful, marketers must have a seat at the decision table and be integral to planning and setting strategy. To accomplish this integration, it means that marketing needs to educate management and bank management needs to lean on marketing in order to understand the capabilities. This can’t happen unless both the marketing team and the management team share the same objectives.
All eight of the above objectives are important but need to be prioritized for the bank as that priority will drive different tactics and campaigns.
Before you execute next year’s budget help ensure that this conversation takes place so everyone can be clear on what 2019 brings.
Submitted by Chris Nichols on December 10, 2018