Every summer, marketing executives at banks and credit unions are hard at work on the following year’s marketing plan.Delivering Value asked two Harland Clarke Marketing Services experts — Steve Nikitas, senior strategist, and Betsy Bentley, executive director — about how to best approach this challenging annual process, and why it pays to start doing it differently.
DV: Why should marketers start to think differently about how they spend their marketing dollars?
Steve: I think the majority of marketers who set budgets are frustrated because they have to allocate future funds without always having measured results from past campaigns. So they end up taking a shot in the dark, not knowing what sort of impact their prior marketing initiatives have had. When we talk about getting marketers to start thinking differently, first and foremost, it’s about using intelligence rather than guesswork to set budgets.
DV: Don’t most marketers do some kind of measurement?
Steve: The problem is not that they aren’t measuring results. It’s that marketers are not necessarily using measurement as effectively as they could. They’re not relying on data that specifically shows what worked and what didn’t when allocating marketing funds, so they’re deciding the following year’s plans without knowing the full results of current marketing programs. But this is a complex issue, because it ties in to the many challenges marketers face. In fact, research from The Financial Brand shows that the top two challenges marketers say they face are insufficient budgetary funding (46 percent) and difficulty measuring and proving their efforts (38 percent). Clearly, they have a lot to deal with.
DV: How can financial institutions use market research more effectively?
Steve: By measuring on a monthly basis, marketers can stay on top of the impact their initiatives are having. Prior to joining Harland Clarke, I worked for several financial institutions and I always measured the results of our marketing efforts. I did that to justify the initiatives to myself, my CEO and the board of directors so they could see that the budget was being spent as effectively and judiciously as possible. If it wasn’t, that would mean I wasn’t doing my job and being an effective custodian of the money our account holders had entrusted to us.
Betsy: Many small and regional banks and credit unions have limited marketing resources. So while they know it’s a best practice to utilize marketing research, they just don’t get to it. Instead, when developing their marketing budgets, they’ll say, “Let’s increase it by five percent.” It’s not nearly as scientific as it should be.