In an earlier post, we discussed how we use “cost per impression” as a metric for planning, budgeting and executing bank events that are specific for customer retention and branding (HERE). In this post, we expand that analysis and apply it to those events that a bank hosts or participates in that are designed to generate leads (“lead gen”) for product sales. If done correctly, lead gen events can result in some of the lowest cost leads possible in the banking industry and also can have the highest product conversion rate of any channel when compared to digital advertising, radio/TV, print or traditional sales activities. In this post, we highlight an effective tactic and provide banks a framework for how to evaluate and choose events.
While most banks hold community cocktail parties, lunch receptions and host chamber of commerce events, one of the most underutilized events is for banks to attend statewide industry-specific functions. These are largely annual trade association events for the profitable industries that your bank targets. For the enterprising community bank, they will largely find themselves being one of the few banks there. As providers of capital and cash management services, if the event and approach are chosen right, banks usually find deep success.
For example, if you were to attend your annual State Bar Association meeting with a target-rich attendee list full of managing partners and law firm office managers, you would likely be one of only three banks with the other two being national in scope. If you can demonstrate a law firm specialty, you will likely find that you have more deposit leads than you can handle. If you were to attend your state electric or water utility cooperative, you would likely be the only bank there and almost be guaranteed a shot at the next refinancing or project bid.
Create a common evaluation framework and ensure you have communication between bank teams that attend and within several years you can decipher the quality events that not only generate inexpensive leads but generate loans, deposits, and cash management fees. Soon you can have a portfolio of events that generate a return on investment measured in at least three figures.
Most banks attend an event and fail to have a pre-meeting on the event laying out clear goals and objectives plus fail to track metrics/outcomes or even conduct an after action review on the effort. As a result, institutional knowledge is lost year-to-year, and improvement is slow. What happens is that banks attend the same events each year with a lackluster effort and negative returns. While seemingly sad, for banks that are on their lead gen event game, they can run circles around the others.
The first step to calculating a return on event investment is to decide what metrics to track. Similar to events targeted at branding, tracking impressions is a good idea. Even better than branding events, you can track the number of qualified leads that get generated from the event. Some banks event rank the quality of the lead so they can produce metrics like not only cost per lead but the cost per “A1” or “hot” lead.
Taking that concept further, as leads work through the sales funnel, and when they produce a qualified “opportunity” in that they express interest in a particular product like a loan or cash management service, banks can now calculate “cost per opportunity” and then take it to the logical conclusion of calculating “cost per win.”
One important point here is not to go too crazy with the analytics to start. Keep it simple such as the metrics suggested below and then develop more granularity over time.
Capture The Information
Hopefully, your bank has a customer relationship management system to capture information about potential accounts that generate leads, so tracking becomes easier. If not, a simple Excel worksheet will do, but know that it take some manual effort on someone’s part. The thinking goes while it seems like a waste of resources, you have already committed at least your business development officers time and cost of attendance. Thought in the marketing dollars in the form of sponsorship that you might have invested and spending an additional four hours of calculating metrics and tracking leads can be thought of as easy insurance to protect your investment. The reality is that at an average cost of $5k to $50k per event (including time and effort), your bank can’t afford NOT to track basic metrics.
Putting It Into Action
If done correctly, your bank ends up with a consistent data set that it now can compare events. To the extent that you can track the business that ultimately results from each won opportunity and estimate the profitability, you have all the inputs to calculate a fairly accurate ROI. Attend an event for two or three years, and your bank will have an extremely good idea of what is worth the time and effort and what events are not.
Events can now be compared to each other and to other lead gen marketing channels, and you can now optimize your budget. You will likely find that you will keep investing in events until you get a set of events that generate returns on par with your other alternative channels. When this occurs, you can take solace in the fact that your marketing dollars are being optimized to the extent they can be.
After every event and again at the end of each year, the portfolio can be reviewed and restructured as necessary with the lower performing events being dropped and the most profitable events being further invested in.
In future articles, we will be sharing some of our secrets on how to develop an attack plan for a conference if it pays to have a booth, how to demonstrate bank products effectively and how to follow up with leads. For this post, we wanted to lay the foundation, discuss the concept and detail how to quantitatively drive success. Before your conference season starts and you still have an ample marketing budget, implement some of these ideas to boost your bank’s lead gen effectiveness.
Submitted by Chris Nichols on January 12, 2017