Reprinted from

sascom

magazine

Performance Management Supplement

Financial Services 2007

IDENTIFYING
EFFECTIVE
MARKETING
PROGRAMS
You need to be able to track
the overall effectiveness of
marketing programs. Im not
talking about specific campaigns like how the broadband cross-sell marketing
campaign did via the Web

Managing marketing
performance

with the three free months

SECRET FORMULA OR DISCIPLINED APPROACH?

the effectiveness across all

MarkMoorman

offer to existing digital cable

customers. Thats a campaign
performance report. And,
while those detailed reports
are important, Im talking
about an aggregated view of
of those marketing programs
both direct (e.g., personal-

ome years ago a retail credit card

group I was working with decided
to change its store card to a full-service
MasterCard. It was a very positive decision, and one that was well ahead of its
time. However, in the heady early days a
decision was made to send out these new
MasterCards to every customer, including
all of the dormant accounts, without
screening for credit.
Initially this decision increased the
groups revenues significantly, and things
went very well for about six months. At
around the six-month mark, though, credit
failures started and kept on coming. It
got so bad that the card group was sold to
reduce the losses for the retailer.

While the problem with this endeavor

is clear to the most casual observer, this
same problem exists in more discreet ways
throughout financial services marketing.
In financial services, marketing struggles
with the usual challenges of branding,
customer acquisition and customer retention, but it also struggles with the risk
associated with monetary transactions.
So performance management for financial services marketing groups is critical,
and getting it right can raise not only the
top line but the bottom line as well.
Marketing executives and their teams
have been hampered by issues associated
with managing the performance of their
marketing organizations for a long time.

ized e-mail offers and catalog

campaigns) and broader
media vehicles (e.g., search
engine marketing, trade promotion and print ads).
By having both a top-down
aggregated view and the
ability to drill down into the
details, you will have a better
understanding of the impact
each program is having on
the business to determine
what the right media mix
should be.
Excerpt from The Holy Grail
of Marketing Metrics by
Michele Eggers, Customer
Intelligence Product Manager
at SAS. Read the full article:
www.sas.com/pmsupp-holygrail

Performance management for financial services marketing groups is critical,

and getting it right can raise not only the top line but the bottom line as well.

These challenges include:

Aligning marketing activities and
resources to strategies and goals.
Linking marketing performance to the
companys financial performance.
Maintaining accountability on the
marketing team.
Integrating and optimizing spending
across marketing.
Understanding and improving the
efficiency and effectiveness of marketing
activities.
Financial services marketing departments struggle with how to address
these critical issues while also keeping
in mind the ultimate goal: creating a
customer-centered, strategic process
within the marketing organization. To be
successful, the process must be enabled
by the right technology, easy to use,
provide timely access to the right information and assure that the entire marketing
organization immediately understands
the impact of its decisions and actions
on both finances and customers.
The right metrics mean marketing magic
Understanding the right metrics for your
organization is vital. Organizations need to
create standard marketing key performance
indicators (KPIs) that are a compilation of
marketing best practices. The areas that
need to be covered are:
Marketing program metrics provide
insights into the efficiency and effectiveness of your marketing efforts.
Customer metrics help you examine
multiple customer dimensions to provide
insights into their satisfaction, value,
segment migration, etc.
Business/financial metrics give
macro-level sales, profitability and cost
information to the CMO and other
executives for a quick reading on the
marketing departments financial impact.
Marketing process metrics focus on
the efficiency of the entire marketing
process to identify best practices and
areas that need improvement.

Creating these KPIs is the most difficult

process. Which events best describe the
desired outcome, and how do you balance
events so you dont end up with unexpected results? The story about the credit
card organization driving up revenue but
not watching risk is played out over and
over in banks today. Whether it is accountopening drives that create more unprofitable accounts, or cross-sell initiatives that
move money from a more profitable
product to one of lesser value, understanding the right customer buttons to push
and the right focus for your organization can
be a real struggle.
Understanding the deep-rooted,
causal relationships between metrics and
the marketing activities that drive them is
crucial. You need both a historical view
and a forward look at trends, not just a
snapshot in time. Analytics can help.
Properly using analytics to look back
so that you can more accurately look
forward is a great place to start building
KPIs that matter. Adding analytics to
your marketing performance management
initiative can help you:
Forecast the results of a campaign
targeted at high-value customers.
Validate the forecast and connect the
campaign to the results.
Identify trends that help you understand aberrations and isolate factors
such as seasonality, weather, etc.
Direct resources to areas more likely to
produce higher returns or proactively
address issues before they happen.
All aboard!
Once you have defined effective KPIs, you
must map and disseminate this information
throughout the organization. While we
will not discuss the policy and procedure
changes here, be aware that the bulk of the
work of disseminating this information is
human- and policy-related.
Your employees act according to their
incentives, but that doesnt automatically
mean theyll act according to the organizations overall performance metrics.

SAS Institute Inc. World Headquarters

Therefore, proper incentive policies are

critical to overall success. Once you have
set incentive policies, the next critical step
is delivering information. Control, security
and timeliness are a few of the key issues
with information delivery. It is important
that you be able to manage the information
from a central point of control but also
offer many secured views of that data.
This often requires powerful data access
because the data is often stored in several
different sources and requires a great deal
of transforming and cleansing to make
sense as a KPI. Look for technologies
that provide:
Strong data access.
Robust data cleansing.
Multiple aggregation roles.
Role-based security.
Central management and metadata.
Web deployment.
In this day of performance-based
management, marketing organizations are
being asked to manage to create specific
outcomes. But marketing is still more art
than science. It is important to take the
time to understand the effects of metrics
on the business.
Be encouraged, though. There are
valuable ways to approach this. Use the
data you have. Use analytical analysis to
define KPIs based on history and trends.
Use technologies that access the data and
present it in the most manageable way
to the organization. And remember, it is
a learning process. Like any other good
learning, it may take time and patience
and the right tools to perfect it.

BIO
Mark Moorman, Advisor in the Office of the Chief
Technology Officer at SAS, works with customers,
partners and SAS divisions to address changing
business and technology dynamics. Prior to this role,
Moorman led SAS Financial Services Practice.

ONLINE
Learn about SAS for Marketing Performance
Management: www.sas.com/pmsupp-mpm

+1 919 677 8000

To contact your local SAS office, please visit: www.sas.com/offices

sascom is published quarterly by SAS Institute Inc. Copyright 2007 SAS Institute Inc., Cary, NC, USA. SAS and all other SAS Institute Inc. product or service
names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries. indicates USA registration. Other brand and product
names are trademarks of their respective companies. Copyright 2007, SAS Institute Inc. All rights reserved. 103176_454750.0807