Of the 760 financial institutions that The Financial Brand interviewed, the highest ranking prediction (54%) was that the industry was going to remove friction from the customer journey. The next two most mentioned trends were the improved use of data and advanced analytics and improvements in multi-channel delivery (mentioned by 54% and 45% respectively).
Yet in order to make the most of all of these three trends you need to know your customer acquisition cost. And this means more than just knowing the difference between the revenue you’re earning and the cost incurred in attracting prospects and customers to your website.
You need granular data to understand the precise contribution of each marketing activity (and the cost) to customer conversion. This allows you to quantify the price of every lead that you do and do not convert.
Here are our top tips on how to optimise your customer acquisition cost:
1. Consolidate all your customer data to improve data and advanced analytics
- Employ tools that allow you to consolidate your data, and make it easy for you to gain insights. This should enable non-technical users to be able to access information they seek in a quick manner.
2. Don't look at results in isloation
- Although it can be beneficial to look at results in isolation, you need to keep the bigger picture in mind to avoid skewed results, understand the customer journey and draw insights to optimise costs and revenue.
- For example, when looking at keywords, one of our clients was focusing on the individual words that were unprofitable. However, when we looked at the bigger picture their keyword channel as a whole was very good, with a 2:1 ratio on customer acquisition to spend. We were able to identify that many customers first came to the website from one keyword, but returned through another. The combination of which was what led to the conversion.
3. Know your customers and their journeys
- Because this is how you make each customer feel valued, by trying to understand the reasons behind their actions
- By understanding what takes customers away from completing a transaction, you could try to provide this information as the pathway to encourage them to convert
- View detailed reports of what customers are doing when they are going through your conversion funnel
- Understand of the entire end-to-end journey so as to take into account the longer term impact of returns/cancellations/loan defaults.
- When people were signing up for a personal loan we realised majority of the drop offs, occurred with people going back to check what APR% they were signing up for. By displaying this constantly during the pathway, less users were going back to view this information
4. Drill into to channel insights
- How can we replicate the success of one channel in another?
- Do you get information about how channels interact with each other?
- How Fospha provides intelligence based on this information:
- One of our clients realised, that 32% of personal loan applications from a particular partner were already acquired by them through organic means. A lower spend with this partner, had no impact on gross number.
The story doesn’t end there
Once you’ve gained these insights, be sure to share them with the relevant people internally so that objectives can be set to optimise these results.
Your aim should be to lower your costs, scale your lead generation across multiple sources and improve revenue generation from more converted customers, so you scale more profitably.
Yet the story doesn’t end with the purchase, you also need to look at returns, defaults and claims made to understand lifetime revenue earned and lifetime costs required to keep customers engaged.