Extraordinary Banker™
Extraordinary Banker™ Issue 5, 2007
By Ford Saeks

It’s long been said that “if you cannot measure it — you cannot manage it.” Nowhere is this more true than with direct and internet marketing campaigns, where the necessity of examining what works and what doesn’t directly influences the bottom line.

Busy executives know that every minute counts. In a competitive marketplace — like community banking — it’s critical that you make the most of your marketing efforts. One of the best ways to accomplish this is with a solid marketing plan combined with a marketing calendar and performance benchmarks. It sounds like common sense, but some things that are simple aren’t easy. However, with the right strategy, they can be.

It’s time to review your marketing strategy to ensure you’re maximizing your ROI.

If you’re like most financial institutions we work with, an important consideration for you is to increase your core deposits. Maybe your focus now is to increase the usage of online banking services, to attract new business customers for commercial loans, or to grow your marketing database list.

Over the years, I’ve used a four-step system to gauge direct marketing performance, and it starts with a basic understanding of the following questions. Can you answer them?

1. What does it cost you to reach your prospects?
   
2. How many of these leads get converted into customers?
   
3. What’s the upfront profit on the first sale or transaction?
   
4. What’s the long-term value of the customer/client?

These are important profit-producing questions that need to be part of your marketing plan and taken into consideration as you develop and implement your marketing strategies. To apply, select a specific time period or promotion and then track your results.

For example, if you send a postcard mailing to 2,500 prospects and the printing and mailing cost is $ .65 each, then the answer to question #1 is $1,625 (2,500 x .65). If you get 50 new customers from the mailing, then you know how many leads were converted and you have the answer to question #2.

If you earn $100 on the first transaction, you raised $5,000— the answer to question #3.

Next, consider the long-term value of gaining a new personal banking or commercial customer. Question #4 is the most important question.

There are other considerations too, like the overlap of other promotions, time frames and the synergistic effect of your other marketing efforts to add value and produce profits.

Zoom… Zoom!

Another way to drive home the importance of having a marketing plan is to imagine your dream car. What color and model is it? Now picture yourself in the driver’s seat, but with one little caveat… the windows are all painted black and there are no gauges for fuel, oil pressure or speed. You turn the key and the engine roars. You push the pedal to floor and zoom, zoom, away you go!

What do you think is going to happen next? Certainly, you’re going to crash— not a pretty picture.

Are you surprised to know that many businesses operate their marketing efforts similar to this scenario? They send out a few postcard campaigns and direct mailings, invest in a website, make a few signs and counter displays— oh yeah, and don’t forget about the pretty brochures with a picture of their building, their logo and tons of content with no call-to-action.

I hate to see good money being tossed down the drain because there isn’t even a basic marketing plan in place. Or maybe there’s a plan, but it’s being implemented without tracking, testing, or measurable benchmarks for improvement.

Click here to download Issue 5 (pdf format)