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Top KPIs for Digital Marketing

Marketing is continuously evolving, and not many institutions know how to keep track of its fast pace. There is so much to do and a lot more to understand.

For banks, credit unions and financial institutions, marketing is usually helpful in answering the following questions-

  1. By whom are your financial products being used?
  2. What segment of products do they pick?
  3. What drives them to choose these products and when do they use them?
  4. How to cope with the changing needs of the users?
  5. What does their journey as a user/consumer look like?

Marketing in this era is more personal than before. It is more about emotional engagement, social messaging, customized and personalized content than features alone. You need to dive in a little more and research about what your customers need, how you can reach out to them in the most efficient manner and then gradually broadcast features and characteristics in your institution and products which will be most suitable in satisfying these consumer needs.

The primary role of marketing in banking and other financial institutions is not just to obtain more and more customers, but also to focus on retaining and preserving them.

If you are looking forward to developing and focusing on evolving marketing for your institution, here are the top 10 key performance indicators that you should be on the lookout for.

1. Conversion Rate

It is the rate to represent the number of leads who have been converted into customers and helps to analyze the effectiveness of marketing mediums and sales channels. Usually, when a customer’s journey is not smooth, the conversion rate is low, and this means that the channels that we are using are not as effective. Regularly tracking conversion rate is extremely important to determine which methods are working out the best, and for the methods which are not working out as planned, how to design them in a way which will lead to a better conversion rate. The rate determines the capability of your marketing campaign to convert one relationship to another and the result being - increased revenue.

CONVERSION RATE = CONVERTED LEADS
 
COST OF ACQUISITION

2. Cost of Acquisition

Cost of acquisition is the cost of capital that is used to acquire new customers. Getting to know your cost of acquisition helps you to know the cost of running the business and also in calculating the value that each customer is bringing in. It is also an indicator of an effective return on investment. Cost of acquiring a new customer needs to be minimized to have a better profit margin. CAC( Customer acquisition cost) is an indicator of capital efficiency and efficiency of sales and marketing strategies. A bank or any financial institution should have different targets for the different segment of customers, consider different approaches while setting a target CAC, and spend as low as possible if it is considerably new to the business.

COST OF ACQUISITION = TOTAL COST OF SALES AND MARKETING
 
NO. OF CUSTOMERS

3. Referral Performance Score ( RPS)

A referral performance score measures the growth of banking and credit union industry through referrals and relationships. It helps to keep a check on customer loyalty and makes it easier to take customer-related decisions. To make the referral system transparent and efficient, banks and credit unions can monitor customer experience, make the digital platforms more accessible, communicate and collaborate better within the employees and develop trust through efficient services. Focusing on referral performance score can help to do minimal spending on resources since no infrastructure building is required, and not much time is spent in designing marketing campaigns. The measurement of this score is usually done on a scale of 0-10.

4. Marketing influenced sales

 

Marketing influenced sales indicator measures the number of customers who have been acquired directly through marketing campaigns. Banks, credit unions should analyze this indicator quarterly. It helps to measure the effectiveness of marketing campaigns and decide what mediums and channels of communication and marketing should be stopped, started and continued. Marketing usually plays a more prominent role in spreading general awareness about the institutions, but sometimes it can play an important role in acquiring new customers as well. For example- Placing financial products on the bank website according to the relevancy that they hold to the kind of customers while addressing current lifestyles or activities of interest can attract potential leads and convert them into customers.

MARKETING INFLUENCED SALES = NO. Of CUSTOMERS CONVERTED FROM LEADS TO CUSTOMERS
 
TOTAL CUSTOMERS

5. Customer lifetime value ( LTV)

Customer lifetime value is an indicator which is used to measure the amount of gross profit a customer is bringing in his entire association with the banks and other financial institutions. It is the most valuable metric for the banking sector because they generally hold customers for a long period wherein the customer goes through different phases of the relationship with the institution. Keeping a quarterly track of this indicator will help banks to build more profit-generating relationships with their existing customers. It also helps in the calculation of other important indicators like the return on investment ( ROI).

LTV= GROSS MARGIN(%) X LENGTH OF LIFETIME IN PAY PERIODS X REVENUE PER SUBSCRIPTION PER DAY PERIOD

 

6. Customer Retention Rate (CRR)

As mentioned earlier in this article, the key for any financial institution to run with profits is to retain their customers over a long duration of time. Customer retention rate helps to measure customer loyalty. Banks and financial institutions should be able to identify, quantify and prioritize customers and also further anticipate how the needs of the customers are going to fluctuate in the future. This can be done by analyzing the customer retention rate effectively. If the retention rate is low, measures should be taken in understanding the factors which are leading to losing customers and working on customer journey and experience.

CRR = ( NO. OF CUSTOMERS AT THE END OF PERIOD - NO. OF CUSTOMERS ACQUIRED)* 100
 
NO. OF CUSTOMERS AT THE START OF THE PERIOD

7. Net Promoter Score

It is an indicator most commonly used for measuring customer satisfaction. Customer satisfaction plays a significant role in building customer loyalty. It helps a bank understand if the customer is a promoter of a product or not. The customers are asked to fill the metric and give the services a score from 0-10. The higher the score, the better it indicates the satisfaction of customers.

The scores indicate the following:

  • 0-6: The customer is a detractor, is not happy with the service and is likely to discourage the referral of the financial products.
  • 7-8: </strong The customer is passive. He is neither happy nor satisfied with the service. He will have a neutral opinion.
  • 9-10: The customer is a promoter. He is satisfied with the services of the institution and will promote the products and institution.

8. Goal completion rate (GCR)

It is the measure of the number of visitors who have achieved a specific goal on the bank’s or financial institution’s website or mobile application. These metrics usually include-

  1. a) Number of visitors
  2. b) Number of leads
  3. c) Number of customers acquired

Hence it is essential to measure Goal completion rate to monitor your online sales efforts and to ensure that the communication is happening through the best design and channel. This rate is calculated by making the customers answer the status of their goal completion in the form of a feedback survey and then, can be reported as a single percentage over a specific period.

9. Return on Marketing Investment ( ROI)

 

The number of leads being generated, the number of leads being converted into sales, and the profit being generated thereafter are the key factors which are used to determine the return on investment. The ideal standard for return on marketing investment is that the revenue being generated should be more than the investment being made in the campaign. ROI can be better determined if you are able to prioritize the metric you want to measure and keep a check on, for example, the number of leads or the number of sales generated. ROI is shown as an increase or decrease in percentage.

 

ROI = GAINS - INVESTMENT COSTS
 
INVESTMENT COSTS

10Brand awareness metrics

A key promoter indicator used to measure social and online conversion. It is an analysis used for analyzing how the brand is performing on social media channels like twitter, facebook, mentions, and searches. The comparison in brand awareness needs to be done over months so that the marketer can interpret how a brand has developed over a significant period. If the monthly comparison rate is increasing, it means that the campaign or strategy is working and the bank should continue to invest in the same. Social media is ever-changing, so the tracking and monitoring of this metric need to be frequent. Brand awareness can be measured through surveys or just analyzing website traffic carefully.

CONCLUSION

What you can measure is what you can manage, and as a bank or any financial institution tracking your, marketing KPIs can help thrive the business. Marketing is an opportunity to connect with customers and creating high success stories. Determine your marketing goals and align them with marketing indicators according to your strategies and priorities, and remember to have efficient tracking mechanisms.

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