What Works? An Analysis of Campaign Results and Best Practices – Part 1 Featuring Marquis’ CMO, Dr. Tony Rizzo

 

Video Transcription 

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

Part 1: The Theories Behind Marketing Automation

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. I’m going to share those results with you today.

For those of you that are homeschooling in and amongst the pandemic, bring the kids in the room, we’re going to give them a quick psychology lesson.

Direct marketing needs to accomplish two things. One, it has to capture attention and two, it can’t manipulate. There’s two theories at work. The first is called the Capacity Theory of Attention. And the Capacity Theory of Attention is simply this: We have a limited bandwidth in terms of our subconscious ability to process information. Only those things that are familiar to us tend to break through that filter so we can move from the subconscious to the conscious level of cognition. This is why we do things like personalization. We make things more familiar to that customer/member to open up that filter, so the offer can move to a higher level of process.

The next is called the Psychological Reactance Theory. And for anyone that’s ever had kids, or been a kid themselves, you’ve been told not to do something, “Don’t touch the stove!” and you touch the stove. Here’s why that happens. We are creatures of free will. And if someone tells us not to do something, our gut instinct is to do the exact opposite. From a marketing perspective, if someone senses that you are using data to manipulate them, they will affirm their autonomy in doing the exact opposite. We have to run a balance of creating things that are familiar to a consumer while not manipulating him or her as to create an environment where “I am open to processing your message.” Those two theories are the foundation of everything.

Our study was the sample size that you see here on the screen, a pretty extensive look in terms of the number of campaigns that we executed throughout 2019. Globally or strategically, we approach marketing with something called Predisposition of Response. What does that mean? It means the campaigns that you’re going to look at, if it’s a campaign, a one-time event, for example, there are over 20 different filters that went into putting the target audience together. Could have been geographic, psychographic, demographic, balances. Could be exclusions, delinquencies. Could be tenure. All of those things, all of these different attributes, went into building a campaign profile.

Why? To get that Predisposition of Response. Not everyone. I’m looking for the one.

Now, from a marketing automation standpoint, on average, 30 different filters were put in place to build or to get to that audience of one. The heavy lifting with a lot of this work, and work in your campaigns, is done on the front end. I’m trying to capture attention. I’m trying not to manipulate. One of the ways that I can do that is by filtering appropriately. All of the campaigns that you’re looking at have this Predisposition of Response and this maniacal focus on the target market, in order to get to that look-alike profile.

Now, if we do that, when we do that, it leads to an increased response rate. In particular, I’m going to speak to the power of marketing automation. Because one of the things that I’ve really questioned is, “Is marketing automation worth the effort?” It’s a lot of effort to do daily marketing, right? All the way from the front end of segmentation to the back end of production. A lot of work. Is the juice worth the squeeze?

We’re going to show you that it is.

What also leads to increased response rates across the segment of campaigns that we looked at, over 400 campaigns, was, again, maniacal focus on brand. If you put your marketing materials on a table and look at them from a direct marketing standpoint across the board, and they look boring to you, you’re doing the right thing. You are focusing on your brand. Why is that important? Remember, we talked about capturing attention and not manipulating? That Capacity Theory of Attention basically tells me I only have a limited brand bandwidth, right? So if your stuff doesn’t look consistent, psychologically, people are going to ignore it. Not that they want to ignore it, but they will ignore it. So brand consistency, across the board, played into higher response rates.

Now, from a data perspective, we have seen the number of data sources we use to put together our Predisposition of Response explode over the past several years. A lot more data sources are being added – transactional data. It could be from a credit card. It could be from ACH, we’ve seen a lot of that come into the system. A lot more demographics. A lot more psychographics. A lot more geographics. So all of that is coming to fruition as we look to do a better job of segmentation. So practically, what does that look like?

You’re looking at a profile of 100,000 Home Equity users. Primary indicators of Home Equity skewed around several different elements; invitation to apply ITA, income, net worth, loan-to-value, the year the home was built. These were primary indicators of propensity to own a home equity loan.

Secondarily, we have some propensity models. On a scale of one to 100, were you in the market for a home equity loan? On a scale of one to 20, were you in the market to refinance your home equity loan? Were you a mail order buyer? Did you have children? What was your tenure? It’s those things (remember, we talked about the other 20 or 30 different filters) that go into creating this funnel. Well, this is what it practically looks like. These are things that we think through in order to break through the barrier of offer resistance.

Across the board, globally, I’m going to share three numbers. The first is $5. For every dollar invested in our approach, this Predisposition of Response, we generated $5 in profit on the back end. I’ll take that bet any day. The second number is 5%. This is representative of the number of consumers that we mail to, on average. So not big numbers, right? These are small numbers. The last one is 13%. And this is our average combined response rate compared to an average DMA number of 9%. We do much better than the national benchmark. Again, working on this Predisposition of Response, using our data to focus on most likely buyers.

We categorized the results across a number of different categories. The first was categorically channel, right? We did direct mail only, email only, and then a mix of email and direct mail. We categorized across campaign type, be it preapproval, reboarding, onboarding, prospecting … we categorized it that way so we could look at the data.

Two big key findings that we found in the study: the first was that if we use direct mail and email together, your balances go up by 2x in almost every case. The second finding that we found, when we use time personalization, also known as marketing automation, your performance, overall balance performance, response performance, goes up by 4x.

So there is something to marketing automation, there is something to recognizing an event in the consumer’s life with you and doing something with it that creates a lift. It creates greater receptivity. It creates better response.

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

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.

Six Relevant Data Sources to Create Better Connections

It’s clear. In today’s data-rich environment, retailers must optimize the consumer experience to drive business through actionable insights. 83%[1] of marketers exceed their forecasted return on investment (ROI) by implementing personalization driven by data. 91%[2] of consumers assume brands will recognize and remember them. With first-year churn at 50% for financial institutions, it’s understood that personalization can help reverse that trend.

 “Data is the new oil. It’s valuable, but if unrefined it cannot really be used.”

Dave Humby, Chief Data Scientist at Starcount

Oil starts as crude and is only usable after it’s been refined. The same goes for data. To make it actionable and provide a personalized experience, we need to draw from multiple data sources. The following six data resources will help align your audience with your marketing efforts and help you create timely and relevant communications.

Key Data Source 1: Demographics

Demographics, the study of a population and its components, provide insight into a household’s composition, including finances, life events, buying activities, buying behavior and major purchases. They also deliver facts, like age, gender, income level, race and ethnicity. These components help create solid customer/member profiles and are the foundation of any successful campaign.

Demographics, in combination with your core data, help determine segmentation, where they exist and their basic characteristics. Armed with this knowledge, you can confidently develop your marketing strategy and plan.

However, demographic data is limited. “It offers a singular view, like a snapshot in time,” offers Amy McConnell, VP of Marketing Strategy at Marquis, a financial services market leader. “To really harness the power of demographics, you should use this intelligence in conjunction with other data sources.”

Key Data Source 2: Psychographics

Psychographic data sets explore values, attitudes, interests and personality. From them, we can gain a deeper understanding of our financial institutions’ customers/members. This intelligence gives us insight on where they work, play and how they spend their money. All of which aids in understanding who our customers/members are and how to best reach them.

These insights into individual tendencies enable you to build a robust behavior profile, deepen your understanding of segment behavior and assist with strategic media placement. “Psychographics allow you to target smarter by knowing and finding who needs your financial institution’s services,” McConnell added, “They also help drive retention and enhance product offerings based on usage patterns.”

Key Data Source 3: Propensity

Propensity data defines who is in the market for a specific product, like an auto or mortgage loan, and who is likely to have products elsewhere. Drawn from transactions, online and social tracking, surveys and more, propensity data predicts brand affinity along with customer/member preferences and behavior. This data enables strategic targeting and allows you to implement a mirroring effect. However, propensity information is only the likelihood a consumer is interested in specific product, not a guarantee. It’s best to couple this information with other relevant data sources.

Key Data Source 4: Mapping

Mapping converts data into visual references based on location. The visual effect creates a new perspective, making customer/member and prospect clusters as well as their proximity to you and competitors’ financial institutions more visible. For example, in an area dominated by apartment buildings, a personal loan may seem appropriate; however, when demographic, psychographic, and propensity data are overlaid, the dwellers may be more prone to be in the market for a mortgage. It is important to partner with your compliance affiliates to avoid regulatory concerns and mitigate any risks with the usage of mapping and demographic data for marketing perspectives.

Key Data Source 5: Credit Scores

Credit score data leverages a secondary credit risk ranking to help create segments and determine opportunities. A strong credit score is a great indicator for prequalified offers and prescreening for credit increases and activations. However, credit monitoring services, like FICO, are highly regulated. If used with close monitoring and approval from compliance affiliates, the data can help create a powerful and personalized experience to delight your customers/members and strengthen your connection.

Key Data Source 6: Credit Monitoring

Credit monitoring data allows you to know what customers/members are doing outside of your financial institution. “What if you could monitor what your customers and members are doing outside of your organization and take action on it?” asks Andrew Lampkins, SVP of Marketing Client Relationships at Marquis. Credit monitoring helps drive timely and relevant marketing messages at the right time.

Data Management and Reporting

With the vast amount of intelligence collected from these sources, interpreting the data often can be daunting, time consuming, and utilize multiple resources. Using a partner to collect and interpret the data may help to alleviate the strain. Companies like Marquis put their experience and expertise at their client’s disposal. Marquis’ insights help develop strategic marketing plans based on their data, the institutions unique customer/member base and the financial institution’s product offerings.

Without measurable results, ROI can be attributable to other sources. Marquis also offers reporting tools to help their clients discover what campaigns are successful and where programs can improve. The Marquis NEXT Reporting Tool delivers a complete view of campaigns, from product performance to opening rates. Lampkins adds, “A tool like Marquis NEXT is ideal to see the growth of new products due to your campaigns.”

Go Forth and Personalize!

Data is valuable. The insight it provides is the basis of any personalization which guides us on who to target, what consumers want, when they want it and where they are most likely to view the message.

For these reasons, these six data sources are essential to your marketing strategy. They are the keys to winning campaigns with compelling offers and a personalized experience. You’ll gain valuable insights, allowing you to learn more about your audience and their needs. Multiple data sources will also uncover new marketable segments that enable continuous growth. Most importantly, personalized content with the right message delivered at the right time creates loyal and lifelong customers/members who will turn to you first for their financial needs.

[1] Invesp https://www.invespcro.com/blog/data-driven-marketing/

[2] Accenture https://www.accenture.com/_acnmedia/pdf-77/accenture-pulse-survey.pdf

Making Data Analytics Work for Your Financial Institution

It’s the latest buzz word, trend and essential marketing must-have – data analytics. Big brands use it to inform their marketing decisions, from loyalty programs to customer communication, and they’ve seen remarkable results. According to Gartner, Inc., marketing analytics accounts for the largest piece of the marketing budget pie – 9.2%*. OK, it works for Macy’s, but how does that translate into the financial realm?

What Is It, Exactly?

Data analytics is the process of examining and analyzing data in order to draw conclusions so you get answers you can work with. Let’s say you want to determine which clients enjoy a profitable relationship with your institution. You’ve got the data – the number of accounts, balances, rates, fees, costs, etc. – and a way to pull it all together. Now all you need to do is add a data element (or two!) to your analysis and it becomes very clear where these profitable relationships live and what products and/or balances make them valuable. You have the information you need to plan an effective course of action.

What Do You Learn?

Basically, you don’t want to sell a personal loan that funds education to a retiree, and you wouldn’t ask the owner of a low-balance account to open a high-yield Money Marketing Account. Today, consumers expect you to know them, and they feel unappreciated if targeted with the wrong message. Without analyzing your data and keeping it clean, much of your marketing efforts will be lost.

Learn From Every Department.

Collecting data for use in analysis is the easy part. Think about all the data available that would enhance your marketing efforts.

Customer Relations – A young couple just opened a joint account. How can you establish your institution as a trusted financial resource? Maybe a link to your money management services?

Sales – Another couple bought a 30-year-old house 6 years ago. It could be time for an upgrade and a HELOC would interest them.

Now you can send them targeted messages that make sense.

Act On What You Learn.

Throughout your institution – product development, strategic planning, pricing, sales calling/closing activity – all departments can utilize and benefit from data analytics. Many companies use custom software tools specific to the needs of that department. The data is gathered, analyzed and translated, but remains siloed. No marketing insight is gained. No marketing action can be taken.

And that’s the key to all analytics – Action. Many collect data. Some even analyze it. But few really leverage the data to drive meaningful marketing programs. Do you have an action plan for your institution’s analytics?

Marquis Can Help.

Whether you work at a bank or credit union, it is vital to both understand and embrace the value analytics plays in financial institutions. At Marquis, we can unify your data sets and translate them into answers you can use. From there, we can guide you on which actions are proven to drive results. Isn’t it time your institution generated more value from your analytics?

Resources

*https://lab.getapp.com/marketing-analytics-data-analysis-in-marketing/