Optimizing the customer experience was overwhelmingly deemed the biggest opportunity for 2018 for bankers (36 percent) surveyed a recent 2018 Guide to Financial Marketing report sponsored by Deluxe. Data-driven marketing that focuses on the individual was a distant second at 21 percent which left me wondering if the people who chose other options either have the CX and data-driven marketing down already or if they are just missing the ball completely. For the sake of consumers across the world, I am hoping its the first option.
The “Oh wow!” moment of the report occurs comes when you look at the biggest challenges. Ninety percent of respondents felt that data infrastructure and data accessibility were a major or moderate challenge and 97 percent felt that data analytics tools and capabilities were a major or moderate challenge. Banks are still struggling greatly when tackling data.
Deluxe Marketing Solutions worked with Gatepoint Research to dig into this a little further to understand why this is and how to help institutions dive more deeply into this area. The details of this research are included in an infographic we released called: Using Data to Elevate Your Marketing.
Who are these people?
Gatepoint Research surveyed 100 financial executives; most were senior decision-makers such as CXOs, VPs, and directors. Nearly half said they were responsible for loan growth at their institutions, while 46 percent said customer retention and engagement was among their chief functions. Twenty-nine percent and 28 percent were occupied with retail products marketing and digital marketing, respectively, while 26 percent counted branding among their duties.
The majority (36 percent) reported to the head of a business unit, 30 percent to a CEO or other C-level executive besides the CMO, 23 percent reported to a head of marketing, 9 percent to the head of retail banking and just 2 percent directly to the board of directors.
Out of balance
When asked how they will measure success over the next 12 to 18 months, respondents led with revenue growth and ROI, followed by increased acquisitions. Forty-four percent cited an improved customer satisfaction/net promoter score as their barometer of success, while 18 percent hoped to achieve an incremental cost to acquire and 12 percent wanted to increase lifetime value.
We then asked respondents to use a sliding scale, with a range of 1-5, to tell us just how much their financial institution does (or does not) rely on data-driven marketing principles when building marketing campaigns. One represents minimal integration, while five meant that every campaign is data-driven.
Responses were clearly out of balance with priorities, with 18 percent scoring on the lower end of data-driven implementation, and 17 percent saying they don’t use data-driven marketing at all.
A telling corollary
The lack of reliance on data becomes slightly less mystifying when you consider that more than half (52 percent) of survey respondents also said their financial institutions don’t have a data scientist or data analyst on staff to help with their marketing. However, the non-data users aren’t the only ones without a data scientist. That high ratio also means many of the banks and credit unions that rely on data-driven marketing lack an essential tool to help them reap the greatest value from their data.
This isn’t that shocking though, while data scientist is a popular field these days, its challenging to find experience data scientists that know the complexities of the financial services industry. This high demand field can also make it difficult to retain these people once you find them, especially if the working environment they are in isn’t what they are looking for. One way to get around this challenge is look for a partner that can bring this skill to your financial institution, we wrote about strategy in our latest white paper, “World-Class Marketing for World-Class Financial Institutions”. The white paper shares data and recommendations from Forrester, Gartner, and other leaders in the data-driven marketing space.
Further evidence emerged from the survey to underscore the belief that too many financial institutions are still not maximizing the value of their data. When marketing for loans, credit cards or account openings, just 30 percent use prescreen data from all three major consumer credit bureaus to refine their targeting. Nearly half don’t use prescreen data from all three bureaus, and 21 percent said they don’t use credit bureau data at all to help target their offers.
Good news/bad news
On a positive note, many financial institutions are using data in their marketing efforts. Forty-four percent use data to measure marketing program success, and 43 percent to understand and predict customer needs. Thirty-nine percent and 36 percent, respectively, use data for budget optimization and benchmarking.
However, less than a third use data to develop their marketing audiences, and only 27 percent use it to personalize offers. And 20 percent said they didn’t use data for any of the marketing functions cited in the survey.
Chief marketing challenges
The challenge executives find most concerning is one that could effectively be addressed through strategic data use; 26 percent said improving/enhancing audience targeting was their top marketing challenge. Meanwhile, 20 percent worry about regulatory compliance, 19 percent about constrained budgets and resources, 19 percent about data limitations and 12 percent about marketing program ROI.
More than half said the most critical element necessary for their success was improving their ability to use data to develop, measure and improve marketing strategies. Forty-three percent want to increase their cross-sell or upsell opportunities, and 36 percent feel they need to do a better job of integrating marketing campaigns across multiple channels.
The survey underscores a key takeaway: While many financial institutions’ top priorities and goals could be addressed through the improved use of data, too many banks and credit unions have still not taken the steps needed (including working with a data scientist) to maximize the effectiveness of their data. If you want to learn more about how data analytics can help support your marketing organization, download our white paper Supporting Customer Acquisition Through Effective Data Modeling. This white paper shares how data modeling helps banks and credit unions to be more efficient and generate a much higher ROI for their institution.
Having access to data scientists and data analysts — whether on staff or through a third-party organization, like Deluxe Marketing Solutions — is no longer optional for financial institutions that want to improve the effectiveness of their marketing campaigns. It’s a necessity.