What Works? An Analysis of Campaign Results and Best Practices – Part 4 Featuring Marquis’ CMO, Dr. Tony Rizzo

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Video Transcription 

What Works? An Analysis of Campaign Results and Best Practices.

Part 4: The Power of Triggers

Dr. Tony Rizzo, CMO, Marquis

One of the questions I get asked frequently is, “What works?” So, taking that question to heart, we executed a very extensive analysis of campaign performance throughout campaigns that we managed and produced over 2019.

Marketing automation. This is the holy grail of marketing, in my opinion. But I would add to it to even have it to be more effective. Our marketing automation takes a look at a set of predefined business rules, analyzes those business rules and acts on them every single day.

There are four categories that we look at. One I classify as market automation or triggers. It could be a credit trigger, where I’m analyzing a data set for credit activity to find those members applying for loans not with you on a daily basis. I’m going to make some type of preemptive offer.

It could be what we call good manners marketing. These are things like “Thank you” and “Happy Anniversary.”

It could be a new account trigger. “You opened a credit card yesterday. Thank you. We think you might like an auto loan.”

It could be transactional. “Yesterday, we noticed that you had an overdraft hit. Would you like overdraft protection?”

But as I went back before, and I said, you know, is it worth it? Because there’s a lot going on here, right? There’s a whole lot that goes into marketing automation. It is absolutely not “Set it, forget it and walk away.” So, we undertook another study and looked at 50,000 people. We sent them the exact same letter. One group was based on timing – when they purchased something we thought the timing was right to make a home equity offer – versus 25,000 people that we just picked a date and mailed 25,000 letters out. No time factor at all. However, both the trigger group and the non-trigger group were already predisposed based on filter criteria. So as close as we could, either group was as qualified as the other. All we did was isolate for time.

Again, same exact letter. Nothing was different. Even the envelope was the same. And here’s what we learned. For the group that received the timed letter, there was a higher response rate. Not only was there a higher response rate, but a statistically significant relationship was found between the time an offer was sent and the take rate/response rate on the offer. So, there is something to marketing automation. We’ve proved it scientifically. We’ve also proved it anecdotally through all the different campaigns that we’re doing.

Look at the different benchmarking responses across the universe. You can see, highlighted in red, combining direct mail with email had an impact on balances.

This idea of machine learning, which is really what marketing automation is, it is not set it and forget it. If you have not done this yet, and you’re looking to get into it for next year, do it slow, do it methodically – one trigger at a time. Do the trigger. Launch the trigger. Track the trigger. Go on to the next one. If you don’t follow that sage advice, you will get bogged down in too many details and your progress, your forward momentum, will stop.

Some samples.

This is marketing automation for credit. Remember, these are people that applied for credit outside of your institution.

The best product you can do this for is auto. Do an auto credit trigger 30 days after the person applied for a loan somewhere else. Why? Because if I go to the auto loan dealer, and I’m credit worthy, I’m going to get the auto loan. Might not be the best auto loan, but I’m going to get one. So, for you to try to preempt that with a letter or email sooner, it isn’t going to be very effective. What is going to be effective is, “Hey you probably have an auto loan, we’d like to lower your payment and save you some money.” That’s a better offer.

The worst product to use credit triggers for are credit cards. Why? Because people generally get a credit card for a specific reason. Could be rewards involved. Could be affinity involved. Could be because I went to Best Buy and I got some money off the TV. It was for a specific intent and purpose, by and large. To make another offer for another credit card, right after the fact, is not the best use of money.

Good manners. These are typically Thank You, Happy Birthday and Happy Anniversary. If we’re doing this approach, we’d like to stay light on offers, heavy on the “Thank you.” We’re trying to get to that point. For new accounts, same thing: “Thank you for opening the account. We appreciate your business. It’s customers like you that keep our business viable. By the way, people just like you have purchased …” or, “By the way, you purchased our checking account. You want to make sure you sign up for our access services, our mobile app.”

Transactional. Now with transactions, we’re recognizing a behavior, some type of interaction like overdraft. And we’re making an offer for, in this example, overdraft protection. Or it could be Net Promoter Score. Now here’s the thing: when you’re doing this type of work with transactional data, you have to make sure about the integrity of your data. It’s important. In other words, if you’re not 100% confident that the overdraft data points that we’re going to use are accurate, don’t use it, it will get you in more trouble with loss of confidence, complaint phone calls, those types of unpleasant member experiences. If you’re going to use transactional, make sure that you have an understanding of transactional. Don’t delegate it, because as the person in charge, you have to understand the nuances of data.

No trigger is 100% bulletproof, not one. Give me any trigger, I can poke holes in it. You’re working off probability. You’re working off, “I’m 98% confident in what I’m doing is accurate.” You’re never going to be 100%, it just isn’t realistic. You have to know, in particular, with this transactional data, what you’ve got on your hands.

What do we know? We know from this study that when we use a combination of channels, I double my balances. When I use personalization, in particular time personalization, in particular this idea of daily marketing with triggers, I’m increasing my performance by 4x over a campaign approach. Frequency and consistency – we’ve learned those are your buddies, those are your pals. That’s the way to do direct marketing. It’s not one big campaign that looks beautiful when I put it out there. It’s something I do all the time, that constant machine that’s always working for me.

What we’ve also learned, if I’m looking at direct mail, non-window, live stamp, much higher response rates than indicia-based mail. Much higher response rates than indicia-based mail that’s sent standard class. Now there’s a time to send standard class. So, you’ve got a way when you will and when you won’t spend that extra money. But we know that the non-window live stamp is a high performing package. We know that simple coded email, singular column works the best, as opposed to all the tricks and gimmicks that go on.

We’ve also learned, and I’ve learned the hard way, marketing automation isn’t automatic. Bad name. We have to monitor it. We have to look at the results. We have to make sure that our criteria are valid. We, as marketers, have to be engaged in that. Don’t delegate that. Understand it.

What Works? An Analysis of Campaign Results and Best Practices – Part 3 Featuring Marquis’ CMO, Dr. Tony Rizzo

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Video Transcription 

What Works? An Analysis of Campaign Results and Best Practices.

Part 3: Campaign Analysis 

Dr. Tony Rizzo, CMO, Marquis

One of the questions I get asked frequently is, “What works?” So, taking that question to heart, we executed a very extensive analysis of campaign performance throughout campaigns that we managed and produced over 2019. Now, on to some granular detail in terms of campaign analysis.

The first thing we’re going to talk about is Invitation to Apply. An Invitation to Apply is a quasi-data element. But it’s like a credit score, basically averages 10 households, say with a 780 score. We don’t use it to make pre-qualified offers. We use it as a filtering tool in comparison, or in contrast to the credit score, and I’ll talk to credit scores in just a second. You can see the results of these campaigns. I am going to draw your attention to the direct mail and email category, where you see that substantially higher balances were generated with the combination of the two channels.

Why do we care? Well, here’s something interesting, and I’ll bet this would hold true for your institution. We do a significant amount of analysis of loan potential and loan portfolios. And here’s what we found on average. That for every one loan you own, there are 46 loans elsewhere within your customer base. For every dollar you own, there are $66 in the membership base that you don’t own, that are financed somewhere else. That does include the mortgage.

But you can see, just by this slide alone, you could 2X your loan portfolio by focusing on your existing members, your existing customers. Super important. A lot of times we go looking for the acquisition, and that’s important. But we don’t go and do outreach to our existing customers. And I meant with a lot of method to it. We’re doing ourselves a disservice because there’s a lot of potential that we’re leaving on the table.

You can see a sample Invitation to Apply. Professional tip: first of all, best month to do these campaigns is in June, worst month is February. If you’re going to do this, keep your offer, and this is kind of global, simple and easy to understand. Not a lot going on in the letter. Not a lot going on in the email. On the postcard, keep it simple.

Next campaign we’re going to talk about is something called the Value Statement. The Value Statement is a content heavy execution. Remember, content was one of the sources we talked about in terms of data and variable production. The Value Statement speaks to what the individual consumer has with you compared to local competition. The idea is to show for a credit union, for example, the value of being a credit union member versus a customer. So, it’s a very heavy analytical project. And you can see again, our DM plus EM category, you’re still generating more balances, right? Your response rates on this are higher than a singular channel.

Here’s a sample of what this particular campaign looks like. It basically shows every account that the consumer would have, and what the annual savings are or earnings would be based on a competitive dive. It’s a statement of value. Why it is important to remain a customer or remain a member here.

Onboarding: if you don’t do Onboarding, this is the only thing you should do next year. Get your Onboarding campaign going, super important. Now, on average, when somebody becomes a new customer, they receive 10 exposures. Could be five emails and five letters, but an average of 10 exposures are coming through. We classify Onboarding campaigns three different ways: standard Onboarding to retail households, to commercial customers or indirect customers – people that got an auto loan on Saturday through the dealer, now we’re going to onboard them. So, we classify those things three different ways.

Why is Onboarding important? From a number standpoint, the average annual churn rate for financial institutions is 11%. Of those, 20% of your customers will leave you that joined within the first year, they don’t even stay 13 months. Of those, half leave in the first 90 days. Now, there’s a lot of mitigating circumstances that go into that. But don’t let one of the circumstances be you didn’t communicate with the new member. Because if you do that, you can control that. Other things you can’t control. This you can control. If you’re not doing Onboarding, you’re leaving money on the table.

Now, our typical Onboarding campaigns are very advanced. They are a spider web of communication that run through various products, various relationships, and various channels. That approach has proven to be very good, very profitable, very high performance. You can see some of the numbers. If you look, the direct mail and email is out-pulling in terms of the average balance generated. Some by a lot. Some by a little. There is something to this multiple channel approach. Our highest performing onboarding campaigns have 16 versions. Don’t know why it’s 16, but our highest performing segment has 16 versions.

The only pro tip I can provide with Onboarding is doing it. If you’re not doing it, you must do it. For Business Onboarding, biggest pro tip I can provide, if I’m speaking to a business account, is to be informational, to use a little bit longer form of a letter, not so offer intensive. If I’m doing something from an indirect perspective, I would add on additional products. That could be for an auto loan, mechanical breakdown, it could be GAP or it could be like the retention segment we talked about earlier. I could just add on an offer that says if you have another auto loan in your household, refinance it here.

I would do that for the Onboarding. What I wouldn’t do … I wouldn’t sell checking accounts. I wouldn’t sell deposits. You can. It just isn’t going to work. But sell me more on an indirect basis, something that’s closer to me, that I understand.

All right, Product. Next one for the campaign analysis is Cross Sell. That is using our predictive model set where you bought a credit card. Now we think you want a mortgage. So, we’re using that. When I do a Cross Sell campaign with two channels, it is driving higher balances. Again, something to this multiple channel approach.

The chart here represents the likelihood someone will leave you in the first 12 months if you don’t onboard, if you don’t cross sell appropriately. I am 50% likely to leave with only one product versus 5% if I have four more. Now, that’s kind of common sensical, right. But now you have some numbers to back up that claim when you’re in the meeting, and they’re talking about the importance of repetition in marketing. The importance of continuing to outreach. Keeping that like a machine and always running, there is a definite financial impact, a benefit of doing that.

We execute cross sell campaigns in lot of different ways. You’re looking at one that has several different suggestions. This particular client wanted to focus on term and balance versus another that wanted to keep it simple, branded and direct with very little copy in there. Either one has proven to be pretty successful. I can certainly say more in a letter than I can on a postcard. So, if I’m going to product cross sell with a postcard, keep it very simple and very branded.

Pre-Approvals. For Pre-Approvals, we use our FICO data. I’m using credit scores to make some type of a pre-qualified offer. This is my only example where multiple channels didn’t have higher balances, by the way. I don’t know why, just reporting the numbers to you. You decide.

If I’m doing a sample, or if I’m doing Pre-Approval, the best month is April. The worst month is October. The best product are credit cards. The worst product are mortgages. Here’s the thing with credit data: less than 60% of your customer base, your membership base, has opted into having their credit score looked at from a marketing perspective. So, what that basically says is you’re leaving opportunity on the table if you’re only doing pre-approvals. The other thing I’m not as juiced about with this credit data is it a risk. It is a liability. All you have to do is Google credit score lawsuits, misuse of credit score, to see that data is risky to use. It’s not to say I wouldn’t use it, but eyes wide open when we’re getting into credit data. All credit data is purchased for a very specific and narrow purpose and cannot be reused. So, if you are doing a portfolio review, and you’re pulling those scores and using them for another purpose, that’s a huge NO. So be very careful when you use this data.

Let’s take a look at Reboarding. Reboarding is when I have a group of people that have detached. They might be a single service household, and I need to get them reengaged. You can see here that although not demonstratively higher on multiple channels, when I use two channels, direct mail and email, I do get a higher average bounce generated. If I’m doing a Reboarding campaign, you isolate for single service. I would also isolate for tenure and those geographically close to you. We don’t reboard everyone. Again, we use predisposition of response to narrow our funnel. The biggest thing with Reboarding is it has to be something that’s frequent. Just like we saw earlier in the campaign versus matrix, the comparison of those two, this is a great example of that. I have to do something frequently in order to rebuild trust, to rebuild familiarity and to open that filter to make a good offer.

CUNA News Podcast – Marquis Sponsored: Integrating Data to Deepen Member Relationships

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Check out the latest CUNA News Podcast sponsored by Marquis as Dr. Tony Rizzo, Chief Marketing and Creative Officer, and Ryan Housefield, Senior Vice President of Sales, describe how credit unions that use data on the front lines can provide the engagement tools employees need to drive sales and decision-making while improving the bottom line.

Click here to listen to the podcast.

Getting Your Message Across Without Shouting in a Storm

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In a little more than a decade since the global financial crisis, things are looking up, especially for U.S. financial institutions. With the calmer waters comes fierce competition. On top of brick-and-mortars, Fintech and Neobanks are hitting their stride while Big Data companies like Amazon and Google are jumping on the lending wagon. Consumers are bombarded with messaging from all sides. How can your bank or credit union’s voice be heard through all this static?

Attracting and Retaining Households

Although it’s true that spending is up, acquiring new households is down and retaining current ones is an issue. Half of all accounts are single-service households. This presents potential retention issues, especially since new single-service households are 50% more likely to leave within a year. The likelihood of leaving halved if they add just one more product. With four products, the potential for leaving decreases to a mere 5%. Concerted efforts to add at least one more product to a household is essential for retention. But it has to be personalized and sent at the right time to the right person. Flooding households with untargeted messaging just doesn’t work, whereas a vehicle loan offer aimed at households with teenagers might do the trick.

Meeting Consumer Expectations

Today’s consumer voluntarily supplies enough information for brands to know and predict their preferences. Nearly three-quarters of global consumers expect brands to treat them as individuals, not anonymous parts of a larger whole. In a world of anonymous avatars and usernames, they expect brands to use the data to approach them as individuals with relevant, personalized experiences. That includes financial institutions.

The Backbone of Effective Marketing Efforts

It’s no secret. If properly utilized, Big Data enables the personalization consumers are looking for. When properly interpreted, you’ll know who your customers/members are, what they need, and when to engage them. Take it one step further to increase growth and profitability by leveraging the data for Growth Analytics.

The Analytics Growth Engine

Growth Analytics is used to identify growth attributes and metrics. An Analytics Growth Engine gives direction and purpose to your Growth Analytics by combining artificial and human intelligence to deliver insights to fuel consistent and predictable revenue growth.

Mark Gibson, Senior Consulting Associate at Capital Performance Group, suggests that growth engines for financial institutions need to have specialized stages.

Stage 1 – Prospecting

Stage 2 – Acquisition

Stage 3 – Onboarding

Stage 4 – Activation & Utilization

Stage 5 – Relationship Expansion

By using data and analytics as tools at each stage, you’ll have precise and scalable data that measurably improves performance and efficiency.

The Super Tools

A strong marketing plan is based on how consumers learn about and buy financial services. It’s about the journey from the prospect to full engagement. Gibson’s Analytics Growth Engine model requires data be applied as a tool to each stage of the process. These tools – Segmentation, Targeting, Engagement Strategies, Life Stage Marketing and Customer Value and Attrition Propensity – lead to a deeper understanding of customer/member needs. In turn, offers are more pertinent to targeted consumers and likely to elicit a response.

Putting It All Together

You have your Analytics Growth Engine. You have your super tools. When the tools are applied, insights will be more meaningful, leading to increased sales, deeper relationships and stronger retention.

Segmentation is the foundation of any targeted marketing strategy. Before prospecting, determine who your best customers/members are, what products and services they use and where they are on their financial journey.

Use Targeting at Stage 1 Prospecting to find prospects who resemble your best account holders. Combine predictive and look-alike modeling with third-party data to target individuals with potential for best value and profitability based on your Segmentation analysis.

Use the Engagement tool to define the onboarding process. Understand what services and products a fully-onboarded customer/member uses. Realize the vision by applying the Engagement tool to Stage 2 and 3 of your Analytics Growth Engine to develop a personalized approach for each customer/member. Then, use the Engagement tool for reboarding to increase activation and utilization.

Life Stage Marketing is perhaps the most important tool for customer/member personalization. Apply it to Stage 4 Relationship Expansion to understand where each customer/member is on their financial journey. Now, you can give relevant advice and predict what products make sense for your customer right now. For instance, a HELOC is meaningless to a 20-year-old college student, but a student checking account might do the trick. This tool helps deliver the right message at the right time.

You’ve reached Stage 5 – Relationship Expansion and your prospect is fully-engaged. Use the Customer Value and Attrition Propensity tool to determine their value to your organization. This allows you to fix a value on retention efforts in both time and money by targeting accounts that historically realize the most value.

You Are Not Alone

Developing a robust Growth Analytics program driven by a strong Analytics Growth Engine is essential in today’s banking landscape. However, most financial services marketers are short on time, training and manpower. Even though financial institutions have remarkably more data than other lines of business, many are unprepared to make the most of this opportunity. But consumers expect us to know who they are and what they want before they even know themselves. If we don’t deliver, we risk losing both prospects and current customers/members. That’s where a company like Marquis can help by leveraging the strength of technology, analysts and creative services needed to extend your reach.

Marquis works closely with your team to develop a strong marketing plan dedicated to attracting new customers/members, expanding product adoption and increasing product use. The Marquis team assembles data sources and provides the tools and expertise to analyze and understand customer/member relationships and opportunities. Using Big Data and Growth Analytics, companies like Marquis become your partner, helping you elevate performance and increase effectiveness. They become your Analytics Growth Engine.

Time for Action

To successfully compete in the current environment, you must engage with customers/members on a deeply personal level and develop a marketing strategy that meets consumers’ expectations of personalization. An Analytics Growth Engine puts your vast amount of data into context to discover new opportunities and promote revenue growth. It’s how you attract prospects and engage with those customers/members most likely to add new products. It makes your message heard in the ultra-competitive world of retail and business finance.

Image courtesy of Mark Gibson, Senior Consulting Associate, Capital Performance Group.