What banks should (and shouldn’t) put in next year’s marketing budget

Subscribe to The Financial Brand FREE by email!

Just as most banking industry practices change rapidly, financial marketing budgets fluctuate from year to year, not only in terms of dollar amounts, but also in terms of which projects receive money. What worked last budget season will not work this time around.

“Previously, we had a relatively easy way to predict what our next year will be like,” says Sarah Bacehowski, president of Mills Marketing. “We have to approach things a little differently now.”

In a webinar hosted by The financial brand Bacehowski spoke of what is proverbially “in” and “out” in marketing trends. It outlines the key steps every bank or credit union should take in designing their next budgets, as well as what marketing teams should completely exclude from their estimated spend.

What to know in advance

For starters, Bacehowski says most of the institutions she speaks with don’t even plan for the next 12 months – they actually only plan for the next six months at a time.

“Six months is doable and tactical,” she says. “God forbid, another pandemic or something is happening. We need some flexibility and the ability to be nimble.

To anticipate :

Financial institutions should stop planning their marketing budgets a full year in advance. Six months could be just as effective and less likely to be overwhelmed by outside forces.

Within this framework, Bacehowski recommends looking at what should be completely excluded from the marketing budget, starting with the development and upgrades of various channels.

“These are things that are no longer marketing expenses,” she insists. In other words, marketing teams should no longer allocate monetary resources to building different digital channels such as transparent online loan application solutions.

Things Financial Marketers Should Exclude From Their Budget:

  • Online loan applications
  • Improved chat
  • Donations
  • E-Sign
  • Mergers and Acquisitions
  • Website

Read more about The Financial Brand on Marketing:

One of the biggest budgets Bacehowski has helped her clients eliminate donations, which she says should never have been part of marketing allowances.

“We have always worked with our clients on this,” she emphasizes. “For as long as I can remember, sponsorships and donations have been built into the marketing budget, which frankly never made much sense to me.”

This does not mean that financial institutions cannot allocate funds from another budget to donations, she continues. However, the ROI of these programs (which she says is zero) doesn’t make sense for a marketing department.

The factors Bacehowski cited above shouldn’t be part of a financial marketing budget at all, but there are projects that can be shared with other departments to maximize the efficiency of an institution’s cash flow. . Surveys are a prime example, she says, noting that such routine surveys can benefit multiple departments in a bank or credit union – not just marketing.

( Dig deeper: Building a data culture that supports the transformation of digital banking)

Budget items that can be shared between marketing and other departments:

  • Surveys
  • Sales training
  • Fraud initiatives
  • Customer journey

“Shared costs allow marketers to do bigger and bolder things,” she argues.

To truly assess Return on Experience (ROX) for consumers – an industry-leading metric, Bacehowski argues that banks and credit unions should use more frequently – there are several related features that can no longer be ignored.

New metrics that should be included in financial marketing budgets:

  • Referral rewards
  • Media
  • Content / creation
  • Branding
  • Strategy (BI)
  • Sales programs
  • Share of portfolio growth
  • Market share growth

Referral rewards weren’t on that list at all, Bacehowski notes, let alone were that high. Still, she explains that marketing budgets that focus on media-oriented campaigns should incorporate referral reward programs.

Additionally, sales programs might not be on every marketing team’s list, but Bacehowski suggests they should be ‘in the back of your mind’, especially for any financial institution that wants to ‘get strong in your business’. the media ”.

( Read more: Best in Class: How Banks Are Mastering the Social Media Game)

SIGN UP FOR THIS FREE WEBINAR

Secure the distributed cloud

It’s time to take the next step in evolving cloud strategies. Find out about this emerging strategy and how it can improve your digital posture.

Wednesday, October 20 at 12 p.m. (ET)

4 steps to establishing a flexible budget

Many banks and credit unions can already take some of the actions described below. However, Bacehowski thinks it is important that they take all measures. For example, while just about any financial institution might collect some data to inform their marketing campaigns (as shown in step two), they might undermine the entire budget by failing to get advice from the rest. of the institution, believing instead that they can rely on historical data or opinions to inform their plans.

To avoid these potential obstacles, the president of Mills Marketing has a step-by-step process that she recommends that financial marketers integrate into their existing process.

1: Identify and rank key performance indicators

To get started, every financial institution should start with these five universal mandates:

  • Growth of low-cost deposits
  • Growth of the basic relationship
  • Improved asset quality
  • Generation of non-interest income
  • Improved selling price / brand equity

These five elements are neither flashy nor unique, but Mills Marketing identifies them as essential factors that should guide all marketing campaigns. Banks and credit unions can of course add to the list or put them in a different order.

2: Collect baseline data to support decision making

“We need to be more careful with our data,” Bacehowski insists. “We need to be guided to become better, more strategic marketers. “

Data comes in many forms, and financial institutions ultimately have to decide what types of macro and micro data they want to extract. However, it must be a balanced set of data points including (but not limited to):

  • Market and industry shares
  • Disruptive activity and impact
  • Profitable customer profiles
  • Product and sale trends
  • Local and merchant landscapes

( Learn more: Banks, credit unions had better focus on these big data trends)

3: Ask and align

The third step is where “the rubber meets the road” for most bank marketing teams, Bacehowski says.

“If I were to say that there was a stumbling block for a lot of our clients before we started the budgeting process, this is it,” she says. “They’re trying to create a marketing plan based on the story or a hypothesis or just a very small sample of what members of the marketing team might know to be true.”

It can be difficult and time consuming, but it is imperative to involve senior management and business leaders, interview them and ask them questions about what they think, she continues. This not only ensures that everyone is on the same page and that the needs of each department are met, but it also introduces different ideas.

“There hasn’t been a single time I’ve gone through this process where everyone finds the same answers,” Bacehowski says, “which means there’s probably some misunderstanding or misunderstanding. “

Open the discussion:

Marketers can dread bringing in senior executives, but this step in the planning process is crucial to getting budget approval.

4: Develop an effective schedule

Ultimately, once all the data is collected and the team is on board, the last thing in the planning process is to design a schedule. But, the way the schedule unfolds comes down to finding that “perfect budget,” which is a struggle, admits Bacehowski. And it comes back to that first point: Financial marketers can no longer budget based on history.

To put it in perspective, she explains that she just got a quote to have the windows in her house cleaned – and it was six pages long.

“The contractor basically said, ‘I’m going to give you everything I can do to make your house look great and you can start removing the things you don’t want. “” Bacehowski says this is how bank and credit union marketing teams should approach their budget plan.

Maybe the department won’t get approval for all of its campaigns from senior management, but it can help teams strategically plan what is needed versus what they can completely. to delete.

Source link

About Deborah Wilson

Check Also

Caleres Appoints Suzy Cirulis Senior Vice President, Client Marketing | National company

ST. LOUIS – (BUSINESS WIRE) – October 6, 2021– Suzy Cirulis joined Caleres (NYSE: CAL) …

Leave a Reply

Your email address will not be published. Required fields are marked *