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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



© DeepTarget Inc. All Rights Reserved
Seven Critical Reasons Why Digital
                                                                    Marketing Should Not Be Ignored                    2


Introduction
   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.



© DeepTarget Inc. All Rights Reserved
Seven Critical Reasons Why Digital
                                                                   Marketing Should Not Be Ignored            3
Reason #1 - Acquiring New
Customers is Expensive!




                 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.




                 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!




© DeepTarget Inc. All Rights Reserved
Seven Critical Reasons Why Digital
                                                  Marketing Should Not Be Ignored                    4
Reason #2 - Customer-Driven Profit
Strategies Should Not Be Ignored

                     The 80-20 rule applies in many cases where the top 20% of
                          customers account for most or all of the profit.

                                              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.




© DeepTarget Inc. All Rights Reserved
Seven Critical Reasons Why Digital
                                                                   Marketing Should Not Be Ignored                    5
Reason #3 - What It Means To Be
Customer Focused




                       The move to a greater customer focus is an attempt
                           to see things from a customer perspective.

             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)


© DeepTarget Inc. All Rights Reserved
Seven Critical Reasons Why Digital
                                            Marketing Should Not Be Ignored                   6
Reason #4 - Why Loyalty Counts

                                            Their growing numbers becomes an annuity. You can
      Loyal customers are typically more    manage the costs of servicing their needs. And, as a
      profitable customers. There are no    great bonus, they act as word-of-mouth marketers for
                                            you.
      acquisition costs. They tend to buy
      more products and services and are    There is also strong evidence that retention increases
       more liable to try out new ones.     in direct proportion with the number of products held
                                            by a customer, i.e. they become “sticky”.




© DeepTarget Inc. All Rights Reserved
Seven Critical Reasons Why Digital
                                                        Marketing Should Not Be Ignored      7
Reason #5 - In the New World,
Data and Metrics Count Too


     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.




© DeepTarget Inc. All Rights Reserved
Seven Critical Reasons Why Digital
                                                   Marketing Should Not Be Ignored                  8
Reason #6 – You Should Know Your
Customers – They Are Not All The Same


                                             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.


© DeepTarget Inc. All Rights Reserved
Seven Critical Reasons Why Digital
                                                                    Marketing Should Not Be Ignored      9
Reason #6 – You Should Know Your
Customers – They Are Not All The Same

  …Continued from previous page
 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).

                           Extending special offers to the right customers can
                         increase retention of top-tier customers by more than
                                    12%. These are serious numbers!

© DeepTarget Inc. All Rights Reserved
Seven Critical Reasons Why Digital
                                                                   Marketing Should Not Be Ignored                  10
Reason #7 – Welcome To The New
Marketing Paradigm



                                                                                    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.


    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.




© DeepTarget Inc. All Rights Reserved
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           Seven Critical
                      customer.
                                                Reasons Why
       Your messages are delivered where
        and when your customers will see        Digital Marketing
       them, helping you with relevant and
                 timely contact.
                                                Should Not Be
                                                Ignored
        Growth of digital media usage and
          DeepTarget’s innovations have
        helped with its broad adoption and      And What It Means To Your
         growth in the Financial Services       Financial Institution If It Is
                       sector.
            Visit our website here and email    An eBook for FI Marketers and Leaders By
            us at info@deeptarget.com for a
            free, personalized consultation.
© DeepTarget Inc. All Rights Reserved

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E Book Seven Critical Reasons Why Digital Marketing Should Not Be Ignored

  • 1. 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 © DeepTarget Inc. All Rights Reserved
  • 2. Seven Critical Reasons Why Digital Marketing Should Not Be Ignored 2 Introduction 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. © DeepTarget Inc. All Rights Reserved
  • 3. Seven Critical Reasons Why Digital Marketing Should Not Be Ignored 3 Reason #1 - Acquiring New Customers is Expensive! 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. 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! © DeepTarget Inc. All Rights Reserved
  • 4. Seven Critical Reasons Why Digital Marketing Should Not Be Ignored 4 Reason #2 - Customer-Driven Profit Strategies Should Not Be Ignored The 80-20 rule applies in many cases where the top 20% of customers account for most or all of the profit. 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. © DeepTarget Inc. All Rights Reserved
  • 5. Seven Critical Reasons Why Digital Marketing Should Not Be Ignored 5 Reason #3 - What It Means To Be Customer Focused The move to a greater customer focus is an attempt to see things from a customer perspective. 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) © DeepTarget Inc. All Rights Reserved
  • 6. Seven Critical Reasons Why Digital Marketing Should Not Be Ignored 6 Reason #4 - Why Loyalty Counts Their growing numbers becomes an annuity. You can Loyal customers are typically more manage the costs of servicing their needs. And, as a profitable customers. There are no great bonus, they act as word-of-mouth marketers for you. acquisition costs. They tend to buy more products and services and are There is also strong evidence that retention increases more liable to try out new ones. in direct proportion with the number of products held by a customer, i.e. they become “sticky”. © DeepTarget Inc. All Rights Reserved
  • 7. Seven Critical Reasons Why Digital Marketing Should Not Be Ignored 7 Reason #5 - In the New World, Data and Metrics Count Too 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. © DeepTarget Inc. All Rights Reserved
  • 8. Seven Critical Reasons Why Digital Marketing Should Not Be Ignored 8 Reason #6 – You Should Know Your Customers – They Are Not All The Same 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. © DeepTarget Inc. All Rights Reserved
  • 9. Seven Critical Reasons Why Digital Marketing Should Not Be Ignored 9 Reason #6 – You Should Know Your Customers – They Are Not All The Same …Continued from previous page 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). Extending special offers to the right customers can increase retention of top-tier customers by more than 12%. These are serious numbers! © DeepTarget Inc. All Rights Reserved
  • 10. Seven Critical Reasons Why Digital Marketing Should Not Be Ignored 10 Reason #7 – Welcome To The New Marketing Paradigm 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. 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. © DeepTarget Inc. All Rights Reserved
  • 11. 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 Seven Critical customer. Reasons Why Your messages are delivered where and when your customers will see Digital Marketing them, helping you with relevant and timely contact. Should Not Be Ignored Growth of digital media usage and DeepTarget’s innovations have helped with its broad adoption and And What It Means To Your growth in the Financial Services Financial Institution If It Is sector. Visit our website here and email An eBook for FI Marketers and Leaders By us at info@deeptarget.com for a free, personalized consultation. © DeepTarget Inc. All Rights Reserved