As markets and organizational objectives shift over time, often marketing budgets don't keep pace, resulting in misaligned budgets.
The very first step in determining how to allocate your marketing spend is understanding how marketing supports the bank's goals. Following these four steps will help in recognizing marketing as a long-term investment and aligning your marketing budget with your corporate strategy.
STEP 1: Bank Goals
Your first exercise should be to evaluate your marketing budget for alignment to your bank's goals. Initially, this might mean pushing your peers for a clear and agreed-upon definition of your overall strategy. Once the goals are articulated, prioritize your budget to reach those goals.
It's important to get and remain in the loop. This will establish marketing's role in the planning process from the start. Understanding corporate strategy development is critical if your goal is to align with that strategy.
You can achieve this by identifying which marketing objectives will positively influence your corporate objectives. You will want to make sure corporate objectives are designed for a constructive impact on revenue later. This is a more sound approach that better reflects what marketing truly does.
Next, identify your bank's top goals. For example, this may be increasing revenue, expanding into new markets, or differentiating from the competition. From those top goals, choose the objectives where you think marketing can make the greatest impact.
STEP 2: Marketing Budget to Support Bank Goals
Create a simple chart to rank each objective and goal by importance and then equate actual marketing budget dollars to them. This allows you to evaluate your plans and consider adjustments. Below is an example:
|Objectives/Goals||Importance Ranking by %||Actual Budget||% of Budget||Difference|
|Checking Account Production||50%||$30,000||37%||-13%|
|CD/Money Market Balances||20%||$25,000||30%||10%|
|Home Equity Lending||20%||$10,000||12%||-8%|
Identify what you want to accomplish and generate specific marketing goals. Maybe your aim is to attract a specific number of new customers with advertising, a branding campaign, an email referral program; or you might like to convince a certain percentage of your customer base to upgrade to your newest product.
Be realistic. Put substantial thought into the activities you choose and continually challenge yourself. If they don't tie into one of the bank's overarching goals, question if you should be doing them at all.
STEP 3: Develop KPIs, Execute, and Measure
You'll need to define your key performance indicators (KPIs) before you spend any of your marketing dollars. That way you can refer back to them to measure your success.
Your KPIs should align your marketing budget with the bank's goals. You'll want to choose metrics that allow you to show clear gains, whether in customer retention rates, customer lifetime value, account acquisition costs, or sales growth.
Continually track progress. A CEO ultimately thinks about marketing in terms of how much revenue it helps influence. Make sure your KPIs are simple, relevant, and can show results through the evolution of awareness, engagement, and qualified leads that eventually closed deals.
Don't wait until the end of the year. Throughout the year, make a concerted effort to monitor the success of your marketing campaigns so that you make adjustments when needed.
STEP 4: Repeat Annually
Wilderman is vice president of marketing at North Shore Bank, Brookfield and a member of the 2018-2019 WBA Marketing Committee.