Solving the Marketing ROI Challenge

Measuring marketing performance is the number one challenge we hear from credit union marketing managers. With small budgets, limited staff, increasing internal pressures and new competitors entering the market, solving this challenge is more important than ever.

Furthermore, as marketing budgets shift toward digital channels, the expectation to track individual channel performance increases. This is, after all, one of the touted benefits of digital marketing. Unlike traditional and outdoor marketing channels, digital can be tracked with a great level of precision that was never possible before.

This higher degree of accountability and scrutiny has caused some credit union marketers to move into digital channels more slowly, opting to favor more familiar channels that aren’t held to such high tracking standards. The net effect is a credit union marketing strategy that doesn’t effectively reach the modern day consumer, but instead serves to avoid the short-term pain of trying to justify ROI to a higher degree than ever before.

Solving this ROI challenge will not only justify the shift toward digital channels, it will also allow credit unions to achieve a higher level of sophistication and success with their marketing. To do that, they need the right tracking tools and to set the right expectations amongst their team.

Step 1: Implementing the Right Tracking Tools

Effectively measuring digital marketing performance begins with the right stack of measurement tools. A stack (or suite) of tools is necessary because there’s no all-in-one solution capable of answering every measurement question. Each tool is designed to solve a specific problem in the customer (or member) journey, which makes it necessary to implement multiple tools at once.

Website Tracking: The gold standard for website tracking is Google Analytics. It’s free and well-supported. New features are regularly added as well. Like most website analytics tools, no personally identifiable information is collected. All user data is anonymous.

A website tracking tool will show you what pages people are viewing, where they came from and what actions they took on your website. Depending on your loan origination system, it may also be possible to track a user as they move from your website through a loan application. Tying this user behavior back to the marketing channel will allow you to calculate important metrics like cost-per-application.

Tag Managers: Almost every digital advertising platform (e.g., Facebook, YouTube, Google, Bing) comes with a unique piece of code that sends data from your website back to the advertising platform. The code allows these advertisers to provide insight back to you. This is incredibly valuable information, but it requires webmasters to manage many different pieces of code on your website.

Managing this code is difficult. When a website gets updated, the code can easily get deleted or changed unintentionally. This breaks the “information chain,” making it difficult to track the success of a campaign. To get around this challenge, a tag manager platform can be implemented.

A tag manager tool is like an empty box that gets installed once on your website and LOS. Your various marketing tracking codes then get added into that “box” from a separate interface. This eliminates the need to touch your website code each time a new advertising channel is implemented. This leads to fewer mistakes and more reliable data tracking.

Our recommended tag manager is Google Tag Manager. Like Google Analytics, it’s free and well-supported. This is considered the gold standard for most small- to medium-sized businesses. For credit unions, it’s a perfect and necessary option.

Marketing Automation and CRMs: Marketing automation and customer relationship management solutions take our data a step further. They act as a bridge between marketing and sales activity by providing detailed information about individuals. Credit unions will often use CRMs to capture and store prospect data including an individual’s name, applications submitted and lead status (open, won or lost).

When used in conjunction with a marketing automation solution, this information can help automate outbound email correspondence and internal sales activity. For example, an individual who completed an auto loan application but has yet to take out a loan can receive a series of automated emails touting the ease of managing an auto loan payment through the credit union’s “award-winning” app. These systems can also trigger alerts to loan officers when a cold prospect revisits the website and may be ready to engage the credit union again.

Most importantly, these systems can close the loop between an anonymous website lead and an actual new credit union member. From this, a credit union can calculate cost-per-loan for its various marketing campaigns.

We consider Hubspot to be the gold standard in combined marketing automation and CRM solutions, but it is far from the only choice. Other viable solutions include Active Campaign, Sharpspring and Marketo (combined with Salesforce), among others.

Step 2: Track Business Outcomes

The cardinal sin committed most by credit unions is prioritizing low-level activity metrics in their marketing reports. These metrics could include impressions, clicks or CPM (cost-per-thousand-impressions). While these metrics provide some insight into what’s happening, they are no indication of whether or not a campaign is successful.

Since most credit union marketing campaigns are focused on financial products, we recommend tracking the number of new applications generated from each individual campaign. We call that metric cost-per-application (or CPA).

For example, if you spend $5,000 on a Google car loan campaign and it results in 77 car loan applications, the CPA is $65 ($5,000 divided by 77).

To take this a step further, you could calculate cost-per-loan, where you track which of the 77 Google-generated applications turns into an actual loan. This requires integrating internal and third-party systems. Due to the complexity of this setup, we rarely see this level of tracking with small- to medium-sized (less than $1 billion in assets) credit unions.

Finally, we recommend calculating a target cost-per-acquisition metric for each loan product. This metric should then be communicated from the C-level to the marketing department and then to the agency running the digital advertising. The goal of each new marketing campaign will be to achieve or beat the target cost-per-acquisition metric. This ensures campaigns are delivering the necessary value to justify the investment.

If in Doubt, Set Benchmarks

Not every credit union has the data or resources to calculate its target cost-per-application. If you can’t establish these metrics for yourself, go as deep as your data will allow or use industry benchmarks. These benchmarks should then be used to set clear expectations around what a campaign needs to achieve to be considered viable.

Every year we analyze dozens of credit union advertising accounts to establish industry averages for each loan product, specifically for new account acquisition. Our most recent industry analysis showed the following benchmarks:

• Credit card applications: $60 to $90
• Mortgage applications: $150 to $250-plus (varies widely based on the market)
• Auto loan applications: $55 to $90
• Personal loan applications: $50 to $70

Digital platforms have allowed for a greater level of tracking than what was ever possible before, but it’s not perfect, and due to new privacy laws, it’s becoming more difficult to implement reliably. With that being the case, in an ever-increasing landscape, credit unions should embrace and utilize the available tracking tools to their fullest extent. This will not only eliminate wasteful spending, but maximize dollars spent on the most effective channels.

Chris Leone is President of WebStrategies Inc. He can be reached at 804-482-1184 or chris@webstrategies.com.