e book seven critical reasons why digital marketing should not be ignored

Seven Critical

Reasons Why

Digital Marketing

Should Not Be Ignored

And What It Means To Your

Financial Institution If It Is

© DeepTarget Inc. All Rights Reserved

An eBook for FI Marketers and Leaders By

http://www.deeptarget.com/

Introduction 2


Targeted marketing through contemporary channels can make a big difference to the top line and bottom line of your

financial institution. This eBook will detail the many reasons why. Moreover, it is a key factor in customer retention – an

important short and long-term goal for any organization.

Yet, despite this, many financial institutions continue to put an overarching emphasis on everything but marketing! Some

questions that need to be answered are as follows:

• Are you giving your competition the upper hand?

• Do you truly know and accommodate your customer?

• Are you using the latest proven marketing strategies?

• Are you improving quality with the information at hand?

Giving lower priority and minimal attention to online and digital marketing strategies and tactics can impact you in ways that

are not beneficial to the overall health of the FI. This paper gives an overview of why they should not be neglected, and in

fact, why they should be on par with other strategic initiatives within the organization.

With a greater customer focus,

increased emphasis on targeted

marketing and effective customer

retention plans, you may discover

greater profitability within your

existing customer base.

Seven Critical Reasons Why Digital

Marketing Should Not Be Ignored

Reason #1 - Acquiring New Customers is Expensive!

3


In addition, they have demonstrated that as a customer relationship with a company

lengthens, profits from that customer increase. And not by an insignificant amount either!



Studies have shown that

companies spend five to seven

times more money on

acquiring new customers as

they do on retaining those

they already have.

Reason #2 - Customer-Driven Profit

Strategies Should Not Be Ignored

4


It is important to analyze which customers to retain. Yet, how

many companies are using this valuable data about their

customers in order to personalize and target campaigns to

customers in a way that maximizes their value and profit?

Financial institutions must find a way to retain profitable

customers, turn marginally unprofitable customers profitable,

and reduce the marketing budget spent on the most costly

customers. However, before firms can address these issues and

take action they must closely monitor customer

behaviour to develop insights that allow them to target

the right customer segment with a relevant,

compelling offer at a time when the customer is most

open to receiving the message.

When looking at retention programs, you must appreciate who

you want to retain and why. To determine which customers to

keep, which to try to move to a profitable customer segment,

and which to let go, financial institutions must now turn to new

marketing strategies and channels.



The 80-20 rule applies in many cases where the top 20% of

customers account for most or all of the profit.

Reason #3 - What It Means To Be

Customer Focused

5


Always keep in mind that the purpose of marketing is to generate customer-perceived value, profitably.

This means turning the four P’s of marketing to be all about the CUSTOMER:

Product is about customer’s needs and wants

Price is about cost to the customer

Place is about convenience

Promotion is about communication (that counts)



The move to a greater customer focus is an attempt

to see things from a customer perspective.

Reason #4 - Why Loyalty Counts

6


Their growing numbers becomes an annuity. You can

manage the costs of servicing their needs. And, as a

great bonus, they act as word-of-mouth marketers for

you.

There is also strong evidence that retention increases

in direct proportion with the number of products held

by a customer, i.e. they become “sticky”.



Loyal customers are typically more

profitable customers. There are no

acquisition costs. They tend to buy

more products and services and are

more liable to try out new ones.

Reason #5 - In the New World,

Data and Metrics Count Too

7


Success in marketing today means it is essential

to understand which customers are to be

targeted and to measure their reaction to the

offer. Using your marketing budget to solicit

unprofitable or marginal customers is simply

not good business.

By leveraging your information assets, you

can become more familiar with specific

customers’ needs, which translates into more

applicable products and responsive services,

leading to improved customer satisfaction.



By better understanding the

customer, an FI is able to more

effectively target the right

promotion, to the right

prospects, at the right time

through the right channels.

Reason #6 – You Should Know Your

Customers – They Are Not All The Same

8


Using combinations of internally created information, web

gathered and outside sourced information, the cost of

customer acquisition can be reduced and new product sales

can be increased. Many financial institutions have thus have

adopted customer knowledge infrastructure as a support tool

in their approach to marketing.

The tangible benefits of this can be clearly measured, as can

the spin-off benefits relating to enhanced customer service

and staff morale.

The typical results of customer knowledge-based marketing

activity show a 200% to 400% improvement in converted

response rates. The actual results vary by product, but as a

“rule of-thumb” expect the rate of response before this

approach to be multiplied by a factor of 2 to 4 times.

Continued on next page…



Combined with the right targeting software, delivered

though the channels where the customer wants to

communicate, you can grow your business and

increase income, while reducing costs.

Reason #6 – You Should Know Your

Customers – They Are Not All The Same

9


Studies have found that market leaders increase customer

value by sending customers information based on past

purchasing behaviour and on marketing insights derived from

predictive algorithms. Customer intelligence models based on

rules engines can deliver the kind of detailed customer insight

that lets you communicate effectively with customers based on

variables such as life stage, product usage, and attitudes. As

your customer evolves based on changes or stages of their life,

you can also evolve your communication to them.

Financial firms that incorporate these rules are the most likely

to deepen their relationships with customers, and ultimately to

increase the value and revenue reaped from their full spectrum

of customers.

It is reported that a detailed, comprehensive analysis of

customer data ('customer intelligence') can generate an

average five-year return on investment of up to 431%

compared to 55% from a pure customer strategy, according to

a recent study by research firm IDC (www.idc.com).

…Continued from previous page



Extending special offers to the right customers can

increase retention of top-tier customers by more than

12%. These are serious numbers!

http://www.idc.com/

http://www.idc.com/

http://www.idc.com/

http://www.idc.com/

http://www.idc.com/

Reason #7 – Welcome To The New

Marketing Paradigm

10


It is important to have a strategy to get from where you are now to where you could be. It is a step you will have to make

to remain competitive in today’s economy. You already have the customer data. All you need to do is manage its

transformation into marketing information, and use it to deliver messages that make an impact – to your top line and

bottom line.



This is the new way of

planning to get a greater

customer wallet share, and

to deliver a more focused

way of achieving income

targets. With targeted

marketing, the more timely

and relevant the contact, the

more likely customers will

respond and buy a “new” or

“improved” product or

service.

Seven Critical

Reasons Why

Digital Marketing

Should Not Be Ignored

And What It Means To Your

Financial Institution If It Is


An eBook for FI Marketers and Leaders By

At DeepTarget, we make software

that can help turn up the volume of

your marketing messages.

We use multiple channels (online

banking, web, email, mobile, etc.) for

cross-selling to grow high-quality

relationships and generate income

while pinpointing a personalized

marketing message for each

customer.

Your messages are delivered where

and when your customers will see

them, helping you with relevant and

timely contact.

Growth of digital media usage and

DeepTarget’s innovations have

helped with its broad adoption and

growth in the Financial Services

sector.

Visit our website here and email

us at [email protected] for a

free, personalized consultation.



mailto:[email protected]

e book seven critical reasons why digital marketing should not be ignored

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customer relationship

customer increase

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greater customer focus

profitable customer

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