Success of digital marketing campaigns can be deceiving
The virtual explosion of communication channels is a double-edged sword for marketers. On the one hand, the plethora of options means we will never lack for a way to talk with consumers. On the other, so many choices can often lead to a lack of organization and purpose.
In no channel is this more true than digital. Forever on the hunt for new acquisition channels, financial marketers are anxious to see how Facebook, Twitter, Snapchat, Instagram, and others might fill their funnel of applicants. Financial product comparison sites, content-driven options, and mobile apps are other digital channels earning a slice of the budget from inquisitive financial marketers.
Like most financial marketers out there, we are still getting our feet wet in these new channels. One thing we’ve quickly learned is the key to marketing in social and other digital channels is to remember your goal. Digital campaigns will yield greater numbers, simply by the high-traffic nature of the channels deployed within them. But, is a higher number of leads really what you’re after? Do you want 15,000 credit card applicants if 14,900 of them lack the credit history to meet your underwriting criteria? This is a particularly important consideration for credit union issues, which tend to be more conservative than large banks and others marketing credit products in the digital realm.
The interesting thing about digital marketing is the industry’s refusal to give up. Even though 40 percent of digital marketers admit lead quality is a significant barrier to success in digital, they are undaunted. Eighty-eight percent of those same marketers say they are seeing improvements and are set on optimizing their digital campaigns to increase effectiveness.
From our time in the digital space, we’ve noticed there is one very effective way to improve the quality of leads generated by digital marketing: audience segmentation.
This first came to light during a trial campaign on a credit card comparison website. Huge numbers of applications came flooding in from the site, to which we had uploaded our credit card product information, nothing more. No fancy digital ads, no special acquisition offers, no targeting whatsoever. While the number of applications was very large, few applicants were getting approved by our underwriting team, which uses much tighter standards when reviewing online applications. This is largely due to the higher rate of low-quality (and often fraudulent) applications that come from online channels.
The fact was, we knew nothing about the applicants prior to displaying our products to them. We didn’t understand who they were, what their credit histories could be or even their motivations for applying. With such an abysmal approval rate, it was obvious we needed to direct our marketing dollars and underwriting resources in a more thoughtful and intentional way. Social networks, which would allow for deeper segmentation, became the focus of our next campaigns.
We started with Facebook, which has historically ranked highest in effectiveness among the most popular social channels for B2C marketing campaigns.
Here are some key learnings from our Facebook testing:
- Whenever possible, target your audience directly. If you have a membership population, use Facebook’s targeting skill to find your members online and display your ad only to them. Your click rates will soar when you can target the right people with your message.
- No list – no problem. Facebook offers a variety of other targeting methods. But, if you are a lender, be wary of targeting methodologies that may put you in hot water with fair lending regulations.
- Be persistent and test often. We are still working to refine our targeting and messaging after channel marketing for almost a year. Your audience needs to get used to seeing you on Facebook and your messages before they will resonate. Don’t despair if results don’t come quickly. Facebook is an extremely cost-effective marketing channel so you can test often.
In upcoming digital campaigns, we’ll continue to go even deeper. Our goal is to target the micro-moments that trigger credit union members to seek out credit. Perhaps a member just bought a new home and is shopping for furniture. Maybe she is getting ready to send three kids back to school and could use a cash-back reward to ease the burden. These are the moments that digital makes possible to identify – and we will be there.
Remember the high traffic, combined with a tendency for credit hungry consumers (and fraudsters) to seek out credit online, is often what’s behind the incredible response from digital campaigns. Keep in mind, too, that your investment in digital campaigns goes far beyond the ad buy. Consider the value of your time, not to mention the time of your compliance and underwriting team members. To avoid the overexcitement that can disguise true ROI, articulate clearly your ultimate goal and stick to that goal.