Most financial institutions have an online presence and at least some online marketing activity.  Traditionally, direct mail and branch locations have been the biggest marketing channels for financial institutions.  However, the ease and ubiquitous availability of various online channels and mediums to access customers via websites, targeted emails, banner ads, SMS, MMS, etc. makes online marketing a requirement.  As the list of options has grown, it has become increasingly clear that without a robust online presence and corresponding marketing plan, your marketing strategy is incomplete.
 

Are you truly maximizing your ROI from this medium?  Do you have the appropriate data infrastructure in place to manage, measure, and modify your offers based on your customers’ needs?  Which channels are you going to start with?  Which channels are more important and impactful for your line of business?  What is the demographic profile of your customers, or are there several segments with different profiles?  All these questions need some thought before valuable marketing dollars are spent.  Lack of appropriate data infrastructure, measurements and metrics that speak to the goals of the organization would lead to failure of otherwise valuable and effective programs.
 

In our recent analysis, we concluded that companies do not clearly define the metrics upfront which leads to serious conflict in reading the results.  Lack of clear definition often results in incorrect data collection and inaccurate assessment of a marketing campaign; and therefore a misdirected future plan.  As you will see below the deeper we go into analysis of the campaigns, the more we realize the complexity that goes into accessing the impacts from these campaigns.
 

By far, email is the most prominent channel used for targeted campaigns. As you run an email campaign or a series of campaigns, there are scores of metrics that can be tracked.  The four most critical are:
 

Open Rate
 

Open Rate is simply the ratio of number of unique users opening the email (does not guarantee they read it) to the number of emails sent.  It illustrates how relevant the email subject line is to the receiver.  Simple enough, right?  But what if one of your email receivers forwarded the email to his/her department or company and most of those receivers opened the email.  If you are not cognizant of this behavior, the results could be misleading.
 

Click-through Rates
 

This metric measures the effectiveness of your email and how many times your readers found your offer compelling enough to click through to the sales page. This is the ratio of number of clicks from a link in the email to number of receivers. 
 

Due to the nature of the emails and privacy concerns, or simply by nature, some of the email recipients avoid clicking into the body of an email and go directly to the website.  A robust data environment is required to capture this behavior so that appropriate business rules are instituted, and the behavior is properly allocated based on the email campaign.
 

Conversion Rates
 

This metric is the most important, but also the most complex because it is very broad and depends on what the email campaign is trying to achieve.  Precisely identifying conversion is the key to developing a deeper understating of the impact of an email campaign through the Conversion Rate.  Most people don't give the identification of conversion events enough thought.  You will use this metric to track your return on investment, as well as the actual effectiveness of your marketing campaign.
 

The definition of conversion is broad.  Below are some example conversions that you may want to measure.

• Makes a purchase
• Opts into a newsletter
• Submits some type of personal information
• Subscribes to an RSS feed
• Prints a page
• Uses "email this page to a friend" functionality
• Spends more than 10 minutes browsing the site
• Downloads a document or application
• Looks at a set of important pages
• Views a set number of pages during a visit
• Clicks a particular link to leave your site
• Searches for a specific product or piece of information

As you will see, it takes significant forethought to identify and define the correct parameters to use and to have the right data infrastructure in place to capture the various parameters.
 

Opt-out Rates

This important metric will tell you if your email campaigns are driving your customers away.  The Opt-out rate is the ratio of number of email recipients who unsubscribe from receiving future emails from you to the number of emails sent.  Most often, you are either not offering the value your customers/prospects expect, or they do not associate you with your emails. You will always have people unsubscribing from your emails.  Some will sign up to receive a free promotion and then unsubscribe from future emails the very next day. This is very common, but also an important metric to track so that you can gain insight into the relevancy of the offers you are making.
 

As you will observe, a simple email campaign itself is quite complicated to measure and calibrate.  When we include the impact of other campaigns and the other channels you are using simultaneously to reach your customers, the measurement becomes even more complicated.
 

The consultants at Profit Technologies have been dealing with these issues within the banking industry for years.  We have developed proven business rules to accommodate for all the interactions and complexities across channels and products; specifically in the online environment so that the ROI on our campaigns are maximized. We are experts at data management, analytics, testing, and measuring marketing campaigns, online or offline.