Justify marketing as an investment by measuring your success.

• Author: Triplett, Ted
• Position: CUSTOMER RETENTION

AS THE ECONOMY CONTINUES TO REGAIN ITS STRENGTH, financial institutions large and small have been looking for ways to conserve cash, do more with less, combine efforts and invest in only what matters. According to the 2012 ABA Bank Marketing Survey Report, respondents listed budget and cost controls (25.3 percent) as the biggest marketing challenge they will face in the next 12 months.

Many banks are living the old saying, "A penny saved is a penny earned." As a result, many banks are cutting back on their marketing budgets, thinking that by not spending they're actually saving money. Though this saying has the best of intentions, the truth is too many banks are operating in scarcity mode and using that as an excuse for poor performance.

Always measure for success

There is a huge misconception about marketing as an "expense." Many CFOs, CEOs and their management counterparts view it as such because it falls under expenses in the income statement--and clearly that seems true when the bank is cutting checks to fund their marketing efforts.

This misconception is perpetuated because of the countless banks that develop marketing campaigns for marketing's sake and don't measure for success. Therefore when banks look at cutting costs, marketing budgets are usually the first to be trimmed. However, marketing can actually be a bank's best investment.

By definition, marketing is a group of business activities that correlates with an overall strategy to drive revenue growth. Marketing also helps differentiate your bank from your competitors, which in turn enables you to price products and services at a fair profit without the need to compete on price.

Marketing directors are wise to leverage their dollars for measurable returns in new customer growth, retention and expansion of wallet share. Banks need to start thinking less about their marketing "budget" and more about their "return on investment." Remember, it's not how much money you spend that counts--it's how much money you make!

Effectively measuring your marketing results is the best way to validate marketing as an investment and NOT an expense. Your marketing must be well...