How much do you invest in your marketing budget every year? Now divide that amount by the number of calls or inquiries it generates.
For most banks, the marketing budget is driven by shiny new ideas from conferences that marketing people attend or based on what was done the year before.
From the newly attended conference “pitches,” they go shopping for new software, new branding, new social media packages—all the marketing offerings du jour. Sadly, they are all guaranteed to create a negative ROI before they even start.
What you really need is for your marketing team to understand that only about 100 of your customers ultimately contribute all the profits, so they had better start thinking about how to elegantly bring those in.
Measure the Right Things
You don’t want to measure the number of leads or new customers since 87% of your customers are unprofitable. Those are terrible marketing metrics.
Let’s do the real math here. Let’s say that you spend a million dollars in your marketing budget, and you bring in 1,000 leads from that. Okay, now we can do some division to figure what it cost per lead that responds to you: $1,000.
Now let’s determine the ROI from those who call in. How many convert to an appointment? Of those appointments, how many become customers? Of those who become customers, how many do so at premium pricing? And what will the cross-sales ratio be on those accounts? Those are the metrics that really matter.
So why on Earth are so many banks still measuring things like number of new customers or number of new leads instead of shepherding those leads all the way through and making sure that they’re creating a full relationship with profitable customers? Why?
When we’re using the wrong metrics, we’re going to have a problem. When I do my Elite Bank Sales and Marketing Bootcamp where we cover what the elite-performing executives do to create a sustainable sales culture that works, I’m constantly telling executives: “You have a role in understanding the marketing and sales process because, ultimately, you are in charge of your revenue model.
And if you don’t understand that role and abdicate responsibility for outcome and strategy, you’re going to have a problem. You’ll have this big expense called ‘marketing budget’ with a very low return on investment from those dollars.”
All bank executives, no matter their roles, need to understand the basics of what it is that pulls in your next most-profitable customers and how to convert them. What is your role as a bank executive in driving the strategy to make that happen?
– Roxanne Emmerich
Please watch the video above and share it with your exec team and board.