Working Through the Challenges Associated with ROI Calculations

Are you interested in calculating the ROI for your marketing campaigns? Most of our bank and credit union clients are. However, it is usually easier said than done because of two obstacles: tracking and attribution.

In order to give credit for a sale to a campaign or, more specifically, to a particular marketing channel used within the campaign, you need to do two things: (1) track all of the steps in the buying process and (2) determine whether the campaign and/or the marketing channel deserves some or all of the credit for the sale.

Since bank and credit union marketing campaigns typically involve multiple channels and the sales process typically involves multiple steps – both online and offline – tracking every step is difficult. For example: it’s plausible that a prospect who ultimately completed a sale first learned about your mortgage program from your search ad and landing page, which they accessed from their phone; was later reminded of your program when they drove past your billboard or heard your radio spot; researched rates posted on your website from their computer at work; and, finally, stopped by a branch days later to talk with a team member, who directed them to get pre-qualified. In this scenario, each marketing channel played an important role in the sale, as did your branch. But it would be nearly impossible to account for each step, and any method of portioning out credit for the sale would be totally unscientific.

So, where does this leave us?

Following are a few ideas about how to approach the problems of tracking, attribution, and ROI calculations from several different angles. Note that none of these suggestions are a solution in and of themselves, but taken together, they could help you create a framework for measuring your marketing investments:

  1. Clearly communicate the challenges of tracking and attribution. To provide yourself some breathing room, consider walking through a scenario like the one above with your executive management team to illustrate the obstacles you face. Explain that tracking and attribution for the purposes of calculating ROI is a priority, but it is a work in progress.
  2. Start at a high level and then work your way down. At a high level, you can measure seasonally adjusted or year-over-year changes in campaign budgets and sales to gauge the relative effectiveness of your campaigns and present general ROI calculations. You can use outside indices (e.g., the Mortgage Bankers Association’s Weekly Mortgage Survey) as benchmarks, allowing you to account for changes in the overall marketplace that may positively or negatively influence your results.
  3. Do a good job tracking prospects across digital channels. Obviously, tracking prospects through digital channels is easier than tracking them through most traditional channels, but that doesn’t mean every bank and credit union does it well. Make it clear to everyone involved with your digital channels that your goal is to track the journey of each prospect who completes a sale backward to their first contact – so what can be tracked, should be tracked. Your internal team members and your external partners should coordinate efforts. Tracking prospects through online applications supplied by third parties can be very challenging. But there are a variety of solutions and workarounds. Your provider is the best place to start – rest assured, you aren’t the only one asking them to work with you to facilitate tracking.
  4. Get your interns involved. Since gaps will likely exist in your automated sales tracking for the foreseeable future, you may want to use manual labor to trace sales back through the sales pipeline. Interns can review account holder information and compare it to call logs, form submissions, and other data from the sales process to help attribute sales to your campaigns and/or marketing channels. This research can also uncover whether the prospect opened additional or different accounts than the one advertised.
  5. Conduct tests to measure the importance of specific channels. If your footprint can be divided into at least two separate markets and you can establish baselines and benchmarks for each market (e.g., Baseline: Market A = $5 million monthly mortgage volume; Market B = $7 million monthly mortgage volume), you can effectively test specific marketing channels by isolating the channel during your campaign. For example, you can run search ads, social ads, billboards, and direct mail in Market A, but leave direct mail out of the mix in Market B. By isolating the direct mail channel, you can measure its importance to the campaign by comparing your results from Market A and Market B.
  6. Recognize that trackability and effectiveness are not one and the same. Don’t fall into the trap of believing that channels that are hard to track are ineffective. While it is true that the effectiveness of a channel most likely will improve if results are tracked and adjustments are made, it doesn’t mean that channels that are difficult to track are ineffective. By testing various channels, and tracking sales, you should be able to identify the right mix of both digital and traditional channels.
  7. Consider developing formulas for attribution. Say you are able to track a prospect who completes a sale, from seeing a search ad and your website landing page and then contact with a branch. Think about attributing a percentage of the sale to each channel, for example 80%/10%/10% or 60%/30%/10% or 33%/33%/33%. You can decide the appropriate breakdown.

If you’re interested in discussing tracking, attribution, ROI calculations, and other marketing metrics, we’d love to start a conversation.