This article originally appeared in Digital Wealth News’ MarTech Minutes
Marketing is a significant domain in the business world; it concerns itself with all activities leading to selling products and services. However, despite marketing’s apparent significance, the value and impact of marketing efforts are sometimes challenging to quantify. Feedback about marketing efficacy is not always immediate, and ROI (Return on Investment) may only sometimes be easily traceable back to a particular initiative. So, how can you prove the value of marketing dollars?
Recently, we sat down with Teresa Leno, CEO and Founder of Fresh Finance, to understand her take on vital approaches to help wealth organizations establish and showcase the value of their marketing efforts. Here are the key points she suggests organizations use to determine ‘marketing spend value’:
Attribution Modeling
Attribution modeling is a method to trace sales back to specific marketing efforts. By attributing leads, prospects, and sales to specific marketing campaigns, you can demonstrate which marketing tactics drive sales and which may need adjusting.
“Understanding the customer journey and which touchpoints push potential consumers towards purchasing, you can refine future marketing strategies to focus more on high-value tactics. For example, financial planning services or strategies tailored toward estate planning,” says Leno.
Customer Lifetime Value (CLV)
The value of a customer is not only about the initial sale but the complete revenue stream that a customer represents over time – this is the Customer Lifetime Value. By demonstrating high CLV, you prove that your marketing efforts result in one-off sales and create loyal customers that lead to a sustainable and steady income over time.
“It’s vital that marketing teams and advisors alike look forward since wealth management is NOT a one-sale-and-done scenario. It’s a lifetime cycle; wealth advisors hit multiple milestones from the birth of a child, think 529 plan, to retirement and liquidating restricted stock options into an IRA. Finance content can also follow life events, adding valuable insight to those experiencing them,” adds Leno.
Net Promoter Score (NPS)
Known as an index ranging from -100 to 100, the NPS gauges the willingness of customers to recommend a company’s products or services to others. A high NPS indicates that customers are not only satisfied with their purchase but are also willing to promote your business through word of mouth, proving the efficiency of your marketing efforts in generating customer loyalty and fostering a positive image.
Social Media Analytics
Social media platforms often provide robust analytics, offering insights into how content is performing among the audience. Metrics like engagement rate, follower growth, likes, shares, comments, and conversions can provide an accurate snapshot of your marketing campaigns’ effectiveness. Social media performance proves that your marketing efforts resonate well with your target audience, validating its value.
Return on Investment (ROI)
ROI is one of the most compelling ways to demonstrate the value of marketing. Calculating the net profit ratio to the total marketing cost makes it evident whether the investment in marketing initiatives yields a positive return. A high ROI proves the financial value of marketing efforts, allowing businesses to justify their marketing expenditures.
Leno says, “Wealth management marketing teams must source martech solutions that are not only cost-effective and free up human capital. Our Fresh Finance solution includes independent compatible solutions in the base pricing and not outside ‘add-ons’ that quickly become expensive. Building out a martech stack similar to a wealth tech platform provides the real value: build the best marketing platform with the best independent integrations.”
A/B Testing
Also known as split-testing, this method involves creating two different versions of a marketing element (like a webpage, an email, an ad, or a social media post), presenting them to similar audience segments, and comparing their effectiveness in establishing objectives. By comparing the performance of ‘version A’ with ‘version B,’ you can prove what marketing elements work best for your business.
In conclusion, marketing is essential to building your organization’s and advisors’ brands, gaining market share, driving growth, and fostering customer loyalty. However, proving marketing value involves leveraging numerous tools and tactics to offer visible and quantifiable results. From understanding the role of each marketing action in the customers’ journey to measuring customer lifetime value, social media analytics, ROI, and more, these elements can further validate and exemplify the effectiveness of your strategic marketing endeavors.
Leno adds, “Remember, one of the most significant values of marketing is its ability to foster customer relationships; proving its value occurs when organizations and their advisors can build and nurture a strong, engaged, and loyal customer base.”
