Banking on Digital Growth
Banking on Digital Growth

Episode · 4 months ago

112) #InsideDigitalGrowth: 4 Types of Attribution: Measuring Conversion & Acquisition

ABOUT THIS EPISODE

How can we improve the way our marketing measures and reports on customer acquisition using digital channels right now? We're pretty much just measuring clicks, but not conversions, and not acquisitions.

In this episode, I'll be answering this question from Andrew, a CMO for a financial brand on the west coast.

I’ll cover:

- The view of marketing as a cost center (or, worse, kids playing with crayons)

- The 4 types of attribution

- How to find your cost per acquisition

You can find this interview and many more by subscribing to Banking on Digital Growth on Apple Podcasts, on Spotify, or here.

Listening on a desktop & can’t see the links? Just search for Banking on Digital Growth in your favorite podcast player.
 

Andrew ask how can we improve the wayour marketing measures and reports on customer acquisition using digitalchannels right now. We're pretty much just measuring clicks but notconversions, not acquisition. That's a great question. Andrew and one that Ilook forward to answering for you on today's episode of banking on digitalgrowth mm mm You're listening to Banking ondigital growth with James robert lay a podcast that empowers financial brandmarketing, sales and leadership teams to maximize their digital growthpotential by generating 10 times more loans and deposits. Today's episode ispart of the inside digital growth series where James robert shares,answers to some of the biggest digital marketing and sales questions he getsfrom the digital growth community. Have a question you want to get answers toon a future episode, visit www dot go ask jr dot com to submit your questiontoday. Now let's go inside digital growth greetings and hello, thank youfor tuning into the 112th episode of the Banking on digital Growth podcastwhere I James robert lay your digital anthropologists, continue to coach andguide you along your digital growth journey as you commit to continue toguide people beyond their financial stress towards a bigger, better,brighter future. Today's episode is part of the inside Digital growthseries and I'll be answering a question from Andrew, who is a CMO for afinancial brand on the West Coast. Once again, Andrew asked how can we improvethe way our marketing measures and reports on customer acquisition usingdigital channels. Right now we're pretty much just measuring clicks butnot conversions, not acquisitions. This is a fantastic question Andrew and onethat I will answer for you today...

...because when you gain clarity intoacquisition or really what we're going to discuss today, More importantly, thecost of acquisition, everything begins to transform for the better for you,for your marketing team, for your financial brand and the good news isthat we have already educated and empowered financial brands on theirdigital growth journey. Their marketing teams. Their cell seems even the littleleadership teams around how to measure cost of acquisition along with whatthey need to do next to turn these insights into action, which is what I'mhoping that we'll be able to do for you and others listening today. In fact,the study to identify the average cost of acquisition for financial brands isone that we've been researching and working to quantify for the past threeyears as there is not a tremendous amount of available data for banks andcreditors to benchmark against furthermore, the reason the study ofidentifying the average cost of acquisition for financial brands is sochallenging is there are many different variables at play, including differentproduct types. For example, consumer versus commercial which have differentmarket sizes and demands. Rule versus Metro versus Suburban, which havedifferent channel cost online channels versus offline channels, all of whichbring products to the marketplace. Finally, this lack of clarity isfurther amplified by the fact that at the executive level for many financialbrands, there's a lack of awareness and understanding around the modern digitalconsumer journey. And so traditionally speaking, when we look back here at thehistory of acquisition of accounts of loans, four banks and credit unionsacquisition historically was just the second step, the second stop on a twopart journey Step, one or part one was...

...awareness, which was some type ofbroadcast marketing, driving acquisition to the physical branchlocation. And so before we move forward to look forward towards the future ofhow you can measure the cost of acquisition at your financial branddigitally. Let's first take a brief walk back through the past for somecontext here before digital. A consumer's journey, as I mentionedbefore, would have started through some type of brand or product awarenesscreated by a traditional broadcast marketing channel. That might be T. V.Maybe it was print radio, direct mail newspaper ad. It doesn't really matterbecause from there the second stop on that consumers journey would have beendriven into a physical branch location where they would have applied for theloan or they would have opened up the account. Now the challenge with thislegacy broadcast marketing model was that it was almost impossible tomeasure cost of acquisition and at best financial marketing teams would attemptto justify spin with their executive teams. Maybe there's CFOS by hopefullyreporting some sort of direct response measurement that was rooted in what wewould call first touch attribution. And we're gonna come back to that pointhere in a moment. So for example, let's say during the month of March, We spent$50,000 on a broadcast marketing campaign And that included some T. V.ads, some radio ads, some newspaper ads. Maybe we'll drop in some direct melonce again, it doesn't matter what these channels were. We just spent$50,000 on some type of broadcast marketing campaign. And to quantifysuccess, we would have had to report a...

...perceived increase in deposits or loans,whatever the product that the marketing campaign was framed around promoting.And if we wanted to take these numbers further marketing could then attempt toattribute how they helped to acquire. Let's just say, 100 and 50 new accountsthrough these traditional marketing campaign efforts. And as a result, whenwe take 100 and 50 new accounts that we acquired, quote unquote on the $50,000that we spent, We could say that the average cost of acquisition was around$333 per new account. Now. In reality, there was really no true way formarketing to quantify conversions and do a direct attribution to thetraditional marketing campaign, let alone identify what marketing channeldrove of the greatest results for conversion happening in a physicalbranch location. And so as a result, because of this lack of directattribution, executive teams and CFOs that were primarily driven by bottomline numbers, this was the reason that marketing gained and not so goodrepresent reputation as either a a necessary evil, be a cost center or Creally the worst cases. Marketing was just viewed as kids that played withpainting crayons and didn't really get any respect in the organization. Andunfortunately, one of those three perspectives, either a necessary evilor marketing being viewed as a cost center or worse kids that just playwith, you know, painting crayons all day long. That is a belief that formany financial brands and their marketing teams still holds true intoday's digital world. So over time,...

...some smart marketing teams started toattempt to get even better at attribution reporting down to specificchannels utilizing some type of code. Some type of code, whether it was on adirect mail or or, or even I recall back in the day, financial brandmarketing teams were using codes in emails that they would send out. Andthe problem with the use of these quote unquote channel codes is they put theburden of acquisition on consumers as consumers then had to inform a branchstaff team member of that code. And if if the branch team member forgot to askthe consumer for the code, well, all attribution numbers begin to becomeskewed. And so let's flash forward beyond utilizing attribution codes,which was a great attempt to try to bridge the gap. But let's flash forwardto the present and begin to look towards the future of where you can gofrom here because we have seen vast improvements in the ability to measurecost of acquisition when compared to the days of traditional broadcastmarketing. Now, one of the biggest challenges today for financialmarketers is not the fact that they lack insight into channel performancedata for specific campaigns. Instead, the challenge for the modern financialmarketer is the lack of awareness and understanding at the executive levelaround how consumers shop and buy financial products. No longer is theconsumer buying journey linear from point A broadcast marketing to point B.Branch cells. Instead, there is a very mushy middle of consideration thatcomplicates the attribution model. And...

...this is why training and education isso important for marketing. For sells teams even more. So I would say forleadership teams to gain clarity into the modern digital consumer buyingjourney and how quickly Modern marketing and sell strategies, thosebest practices have evolved have transformed even just over the past 3-5years. And while it is easier to measure direct attribution throughplatforms like paid search via google PPC, as consumers are often in theactive search for a solution to their problem in their own consumer buyingjourney measuring attribution for other digital channels, including, let's sayit's email, maybe it's display or re marketing ads, maybe it's social media,Maybe it's content like articles, videos, blogs. When you take in all ofthese different channels as a whole, measuring direct attribution becomesfar more challenging. Far more complicated. In fact, the vast majorityof these channels are how financial brands nurture consumers through theconsideration stage of the buying journey to bridge the gap betweenawareness and purchase. And so when we think about the digital consumerjourney, you know, we can look at five stages, we can look at awarenessconsideration, purchase, adoption, and advocacy. But for the point of thisconversation, what we're really focused on are the first three which areawareness consideration and purchase. So where does this leave financialbrand marketers and their teams? Well, there are four options. Will call themfour measurement models to consider when measuring attribution through themarketing that you're doing. First we have what is known as first touchattribution, then we have last touch...

...attribution. Third, we have linearattribution and then fourth we have last non direct click attribution. Andwhat I want to do is start off by exploring together all four of theseand we'll begin with first touch attribution. Now, first touchattribution model simply forces us to focus on the first touch a consumer haswith your financial brand. So for example, if a consumer discovered youduring the awareness stage of their buying journey through a paid searchadd, let's say google PPC this channel, i E google PPC would get the creditwhen it comes to conversion for a loan or deposit application. That is in fact,if you are able to track attribution through the buying journey via yourthird party loan applications or your third party deposit applications andthat's a conversation that I've provided some solutions around goingback to episode number 16. Technology has transformed our world and digitalhas changed the way consumers shop for and buy financial services forever. Now,consumers make purchase decisions long before they walk into a branch. If theywalk into a branch at all, but your financial brand still wants to growloans and deposits, we get it. Digital growth can feel confusing, frustratingand overwhelming for any financial brand, marketing and sales leader, butit doesn't have to because James robert wrote the book that guides you everystep of the way along your digital growth journey, visit www dot digitalgrowth dot com to get a preview of his best selling book banking on digitalgrowth or order a copy right now for you and your team from amazon Inside,you'll find a strategic marketing manifesto that was written to transformfinancial brands and it is packed full...

...of practical and proven insights youcan start using today to confidently generate 10 times more loans anddeposits. Now back to the show. The challenge here is what happens if theystart that application online. They abandoned it because of friction andthen they come into the branch or they call in to complete the application orthey moved to another device. What channel gets the win at that point isthat the branch is at the call center, Is that the PPC ad? And so I know andI've heard marketing teams share this with me time and time again. It will beinteresting to see what happens in the, in this post covid world, particularlyas the world has now opened back up. I have been making predictions that willprobably see some trends back to pre covid behaviors on all fronts in alldifferent areas of life. So it'll be interesting to see what happens herewhen it comes to the most important stage of the consumer buying journey,which is in this case is we're talking today acquisition. But I hear frommarketing teams the frustration that they're running all of these digital adcampaigns, they're running social campaigns, but then they're not able totrack that attribution if someone transitions to another channel, whetherit be the call center, whether that be a physical branch location. So withthese questions and the concerns and almost the conflict in mind, I want tomove on to the second attribution model, which is last touch attribution and thelast touch attribution model provides conversion credit to the last platformor the last channel that an account holder of perspective account hold wereconverted from. So for example, let's say a consumer engages and clicks on agoogle PPC ad, But they don't convert on the first visit. Now, it's importantto note this because from our studies,...

...we have found that 98% of consumersnever ever convert on the first visit to a financial brands website. So whathappens? Well, this is where we can begin to re market these visitors onsocial media. Maybe it's with another ad promoting some type of helpful oreducational resource or offered during the consideration stage of their buyingjourney. And so let's assume that this consumer engages with this educationalcontent. Maybe it's uh, maybe it's a lot of different pieces of content,Maybe it's an e book, some blog articles, videos, podcasts, marketing,automation emails, Maybe they even attend the webinar and It's from thatWebinar, they'll then receive some follow up automated email series thatare that share even more helpful content that over time, 30, 60, 90,maybe 180 plus days over time, all of this content in the consideration stageof their buying journey leads to a conversion on a digital loanapplication or digital deposit application. In this last touchattribution model, the webinar and maybe even more specific, the automatedwebinar email nurture series. That is the channel that gets the conversionwhen but how many other touchpoints assisted with the conversion along theway. And if we go back in that narrative, well, we had social media remarketing from that first initial visit to all of the additional content thatwas consumed by this new account holder. So with this question in mind, who getsthe win or how do we how do we spread this win over multiple channels? Let'scontinue to explore the next option for attribution measurement, which islinear attribution. And that's because...

...the linear attribution model helpsfinancial marketers start to really uncover the truth about differentdigital ad channels and the role that each one of them plays in a consumerbuying journey all the way through to the conversion process. Once again, youyou cannot simply give credit to one digital marketing channel based onfirst touch or Last touch attribution because it does not let me repeat firsttouch and Last touch attribution alone does not provide any insight or clarityinto the overall digital consumer buying journey. Put another way all youget is the introduction or the conclusion to a much bigger story whenyou're measuring first touch or at last touch attribution alone. And so this iswhere the linear attribution model makes the most sense when you thinkabout how conversion fits into a larger buying narrative, a larger buyingjourney as every touch point on, that journey impacts a consumer's pathtowards conversion. I hear financial execs and and leadership teams complainall the time that social media doesn't drive cells and it doesn't bring directconversions. My pushback on this, this is short sighted thinking that's rootedin legacy direct marketing and sells models because in reality there is avery slim chance that social media will ever drive any direct conversion likesay google PPC does or and remember, I'm not gonna say google PPC does likegoogle PPC has the potential to because that's not always the case when youthink about google PPC, it's a direct...

...buying engine connecting people topossible solutions for their pain points. And so it's a different type ofbuyer on a different type of journey, but that doesn't always translate to adirect conversion then because someone, even when searching, google is mostlikely in the consideration stage of their buying journey. Now let's comeback to social media because when we think about social media and all of thecontent outside of social media, we have blogs, we have videos, we havesocial media posts. Each one of these is just one more touch points on a muchlarger and more complex buying journey and that's where we can come back tothose three stages of the buying journey. We have awareness, we haveconsideration and purchase. So all of these different touch points points,all of these different activities fall into the consideration stage of thebuying journey and truth be told if a consumer did not like your socialcontent or they did not find your blog articles, your videos, your podcasthelpful. I'm willing to bet they probably would not convert in the firstplace. And it is here that I implore, I implore financial brand executives andtheir leadership teams to not fall into the, into the last touch attributiontrap because last touch attribution does not account for all of thedifferent digital touchpoints and content that helped to influence. Andthat's the key word here, the content that helped to influence a consumersbuying decision. And this is where linear attribution provides clarityinto all the different touchpoints a consumer has engaged with on their pathtowards conversion. However, linear attribution still hasthe potential to fall short because it does not include direct attributionwhen someone types in your websites,...

...your l directly into the web browser'saddress bar. And that now brings us to the fourth option for attributionmeasurement, which is last non direct click attribution. And so if you'restill with me, I'm gonna walk you through this because last non directclick attribution model helps to solve the challenges that are attributed tolinear or last touch attribution because it ignores all direct traffic. In fact, last non direct click is agreat model to filter out direct conversions that could be dominatingall of your web conversion reports because this essentially highlights thelast touch that isn't direct. The problem with direct conversions is youdon't gain much visibility into a consumer's digital behavior. Directconversion only informs you of brand aware users who are converting as theytype in your U. R. L. Directly into a web browser to apply for a loan or toopen an account. And so the big question here is then, how do theseconsumers become brand aware? What steps do they take along their owndigital buying journey? What content or other ads helped to play a role ininfluencing they're buying decision in the process. And this is exactly whatlast non direct click attribution helps you discover. So knowing thecomplexities of different attribution models, I recommend that we first breakdown what the ideal cost of acquisition for your financial brand could bethrough a very simple formulaic...

...approach for each product line that youhave, each of the key product lines that you have. Instead of trying to dothis measuring cost of acquisition here as a single point of view for all ofyour product lines combined. If you try to do this for all of your productlines combined, it won't provide any clarity because when you think aboutsetting benchmarks for future success to measure against this is where we canstart breaking down individual buying journeys, safer checking, auto creditcard, personal loans, mortgages, commercial small business, etcetera. And so this is also gonna help you seta benchmark when looking and knowing what the LTV is. The lifetime value foreach one of these product lines because we need this lifetime value to measureagainst cost of acquisition. And that's because ideal cost of acquisition isgoing to be influenced by the lifetime value for various product types,consumer versus commercial, which might have different market sizes and demandsrural versus metro versus suburban, which have different channel costflying versus online. All of us once again bring these products to bear inthe marketplace. And a good way to benchmark your cost of acquisition isby comparing it to lifetime value of an account holder, which can be viewed intwo different ratio models. And so the first one here is comparing lifetimevalue to cost of acquisition three minimum a minimum of a 3 - one ratio.For example, let's say the lifetime value for a particular account type oralone Is $900. and in this 3-1 ratio,...

...the ideal cost of acquisition for aproduct Would be $300. The second ratio model to consider is then comparinglifetime value to cost of acquisition through 4-1 ratio. And so in thisexample, let's say that the lifetime value once again is For a particularproduct or an account is $900. Well now the ideal cost of acquisition for thisproduct would be $225. And so these two ratios of 3-1 of 4-1, it might even bea 5-1 ratio. It all comes down to looking at identifying first andforemost what is the lifetime value for each one of your key product lines? Andthen utilizing that lifetime value to begin to measure the ideal cost ofacquisition for those product lines and then come back and look at. Well wehave four different ways that we can measure attribution. First way beingfirst touch attribution, second being last touch, third being linearattribution and then fourth being last non direct click attribution. As wewrap up here, I want to come back to Andrews question which was how can weimprove the way our marketing measures and reports on customer acquisitionusing digital channels. Right now, we're pretty much just measuring clicks,not conversions. And I want to thank Andrew again for this question becausewhen you gain clarity into the lifetime value for each one of your key productlines, this is going to help you provide a foundational cost ofacquisition that is unique for your financial brand so that you can measurein benchmark against going forward.

We've been a tremendous amount ofresearch on benchmarking lifetime value for key product lines along with thecost of acquisition through primary and secondary research. But I also want toto mention that I've written prolifically around this subject inChapter 12 of banking on digital growth. Chapter 12 being dedicated to helpingfinancial brands prove marketing's value once and for all, because itreally does break my heart when I hear financial brand marketing teams and andthat that happened, it happens at least once a month. They share with me. Yeah,we're not really respected around here. People think that we're just anecessary evil or that were a cost center. The one that pains me the mostis when they feel like they are just kids that play with Peyton crayons. AndI get it. I understand where that perception comes from, but that is aperception that is rooted in the past. That is a perception that is rooted inlegacy marketing and really legacy marketing and sell systems. But thegood news is that it doesn't have to be that way. In addition to this podcast,I also recommend listening to episode number 16, which is no more vanitymetrics, Here's how to track conversions because if all you do islisten to episode number 16 an episode number 1 12 today and apply theinsights that you learn. I guarantee that you will maximize your financialbrands digital growth potential in the months and years to come. And so as wewrap up today's episode, that is part of the inside digital growth series. Ifyou have a question like Andrew, I want...

...to hear from you because I do want tohelp you maximize your digital growth potential. So text me your question to4155793004 And I will answer it for you on an upcoming podcasts or you mightalso have the opportunity to join me live for clarity calls, clarity callsis a new episode that we're launching where you and I will sit down anddiscuss your biggest digital marketing cells or leadership question and thentogether you'll walk away with some clarity so that you can continue tomove forward and make progress along your digital growth journey withcourage and confidence. The thing that I want you to remember, there are nobad questions. There's only one bad question and the only bad question thatthere is is the question that goes unasked as always and until next timebe well, do good and make your bed. Thank you for listening to anotherepisode of banking on digital growth with James, robert, ley. Like what youhear, Tell a friend about the podcast and leave us a review on apple podcasts,google podcasts or Spotify and subscribe while you're there. To geteven more practical improvement insights, visit www dot digital growthdot com to grab a preview of James roberts, best selling book banking ondigital growth or order a copy right now for you and your team from amazonInside you'll find a strategic marketing and sales blueprint framedaround 12 key areas of focus that empower you to confidently generate 10times more loans and deposits until next time, be well and do good. Mm.

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