Scaling Customer Acquisition Through Digital Account Openings

Written by

A strong digital account opening strategy, when done correctly, can generate returns on investment that are both obvious and large.

Critical to this strategy, however, is to have a granular and holistic understanding of customer acquisition cost, or CAC. Customer acquisition cost is a broad topic and is usually composed of multiple channels. Digital account opening is a tool used to acquire customers, and therefore should be included in your financial institution’s CAC. ‍It may even be able to reduce your current CAC.

Financial institutions define CAC differently, and there is no limit to its granularity. We advise financial institutions to separate user acquisition cost into two buckets: digital CAC and physical CAC. This piece will focus on digital CAC.

With respect to digital CAC, there are a number of inputs that can include:

  • The digital account opening platform;
  • social media advertising spend;
  • print ad spend (mailers, billboards);
  • general ad spend (commercials, radio);
  • retargeting ad spend (i.e. Adroll); and
  • creative costs.

Optionally, a financial institution can also include the salaries and bonuses of employees directly responsible for growth, any overhead related to employees directly responsible for growth and even physical CAC, if this is less than 20% of overall CAC spend.

How Does Digital Account Opening Reduce CAC? ‍
Digital account opening platforms are actually intended to lower your customer acquisition costs. Initially, this might sound counterintuitive: how would installing a digital account platform, which is an additional cost, reduce CAC over the long run?

The answer is scale.

For example, let’s say your financial institution spends $1 million on marketing and gains 10,000 new customers. This results in a CAC of $100 per customer. Compare that to spending $1.2 million on marketing that includes digital account opening. Providing the ability for customers to easily open accounts through online, mobile and tablet channels results in 15,000 customers, dropping your CAC to $80. In this example, implementing a fast and easy way for customers to open accounts reduced CAC by 20% and increased the return on existing marketing spend.‍

Once you have a successful marketing machine that includes strong digital account opening, you will want to scale quickly. Marketing spend decisions should be driven by quantitative metrics. You should be able to confidently expect that if it increases marketing spend by $X, you will see a Y increase in new accounts and a Z increase in new deposits.

The only additional costs your financial institution incurs for account opening are per application costs — which tend to be nominal inputs to the overall CAC calculation. ‍

What is a Good CAC for a Financial Institution?‍
CAC has so many variables and broad-definitions that it is nearly impossible to tell financial institutions what is “good” and what is “bad.” Across CAC industry benchmarks, financial services has one of the highest costs to acquire new customers:

Technology (Software): $395

Telecom: $315‍

Banking/Insurance: $303

‍Real Estate: $213

Technology (Hardware): $182

Financial: $175

Marketing Agency: $141

Transportation: $98

Manufacturing: $83

Consumer Goods: $22

Retail: $10

Travel: $7‍ ‍‍

Customer acquisition cost and digital account opening go hand-in-hand. Financial institutions should focus on the output of any marketing spend, as opposed to the input cost. Different marketing strategies will have varied levels of scalability. It’s important to invest in strategies that can scale exponentially and cost-effectively. By focusing on these principles, your financial institution will quickly realize a path towards industry-leading growth and profit metrics, putting your financial institution ahead of the competition.

A Top-Performing Bank Explains Why It Sponsors Three NFL Teams

Written by


Best-Performing Stadium Sponsorships

Sponsoring a local sports team is an effective way to resonate with a community.

It’s something M&T Bank Corp. takes so seriously that it sponsors three NFL teams: the Buffalo Bills, in the bank’s hometown of Buffalo, New York; the New York Jets, who play out of Metlife Stadium in East Rutherford, New Jersey, and the Baltimore Ravens.

Since 2003, the $121.6 billion asset bank has held naming rights for the Ravens’ home field, M&T Bank Stadium in Baltimore, Maryland. It’s a relationship the bank extended in 2014, for a cool $60 million, keeping M&T’s logo on the stadium until 2027.

“We are embedded in the communities where we live and work, [and] we understand that those teams are important to their communities, including our employees, customers and prospects,” says Betsey Locke, senior vice president of brand, advertising and sponsorships at M&T.

Back in 2003, M&T was relatively unknown in the Baltimore market, she says. Holding the naming rights for the Ravens’ stadium “gave us immediate credibility. We’re now perceived as a hometown bank.”

Placing a bank’s logo on a local stadium and aligning the brand with a well-loved team can make an impact; that’s what drives even efficiency-conscious companies like M&T to spend millions on these sponsorships. It’s a unique relationship that Bank Director sought to understand by looking at the recent records of major sports teams.

In addition to win/loss records, the ranking accounts for the popularity of the sport, based on survey data from Gallup.

“Football remains the biggest and most popular sport,” says Locke. “The NFL draws the largest, strongest partnership ROI and the greatest fan affinity.”

Sponsoring sports teams is a tactic embraced by banks nationwide. There are more than 250 minor league baseball teams in the U.S., for example, and naming-rights sponsorships with these teams include big regional banks like Cincinnati-based Fifth Third Bancorp (the $168.8 billion asset company sponsors the Toledo Mud Hens) as well as smaller banks like $9.6 billion asset NBT Bancorp, in Norwich, New York, which sponsors the Syracuse Mets.

College teams offer another popular option. Through its Centennial Bank brand, Home Bancshares, based in Conway, Arkansas, has naming rights on the stadium that’s home to Arkansas State University’s Red Wolves football team – John Allison, the chairman of the $15.3 billion asset company, is an alumnus of the school.

M&T gets hundreds of sponsorship requests from sports teams to arts and cultural activities, says Locke. Her team uses a scorecard to conduct an initial review and determine whether a request meets the minimum requirements for M&T to seriously consider it. They look at things like alignment with the bank’s target audience, whether the opportunity will effectively promote M&T’s brand and differentiate the company in the marketplace, and if the bank will be able to promote its products and services to new audiences. Requests that pass this initial review are then handed off to a committee that meets quarterly to decide which requests to ultimately pursue.

Sponsoring the Ravens is a good fit, says Locke, because M&T doesn’t just cut a check. “We do community efforts together,” she says. For example, 150 employees from both organizations worked together to rehab a Boys & Girls Club of America in Baltimore earlier this year. Showing that both organizations are “deeply embedded in the community” is an important piece of the partnership, says Locke.

For the Ravens and other partners, M&T tracks the return on its investment through a number of key metrics, including impressions and engagement on traditional and social media. The bank also offers branded checking accounts for fans of the Ravens, Jets and Bills. These affinity accounts are promoted alongside the sponsorship, and M&T tracks their growth as part of the checking portfolio.

Fans’ love of the game goes beyond the numbers. A team’s record doesn’t account for its history, and teams that perform well one year can break fans’ hearts the next.

Locke says M&T is with fans through the good times and the bad. “Fans are deeply engaged and support [their] teams year-round,” she says. And football promotes values that M&T wants to align itself with. “[It’s] about teamwork, love for the sport, love for the community,” she says.

Best-Performing Stadium Sponsorships

Rank Sponsoring Bank Team League Win/Loss Record Score*
#1 M&T Bank Corp. Baltimore Ravens NFL 62.5% 1.2
#2 Wells Fargo & Co. Philadelphia 76ers NBA 62.2% 1.8
#3 TD Bank Boston Celtics NBA 59.8% 2.8
#4 U.S. Bancorp Minnesota Vikings NFL 53.1% 5.0
#5 Barclays New York Islanders NHL 58.5% 5.6
#5 Capital One Financial Corp. Washington Capitals NHL 58.5% 5.6
#7 PNC Financial Services Group Carolina Hurricanes NHL 56.1% 6.4
#8 SunTrust Banks Atlanta Braves MLB 55.6% 7.2
#9 Citizens Financial Group Philadelphia Phillies MLB 49.4% 7.8
#10 Bank of America Corp. Carolina Panthers NFL 43.8% 8.6

Source: Source: Gallup, NFL, MLB, NHL, MLS
*The score is based on the popularity of the sport as well as the win/loss records for each team. Where the bank sponsors an arena that hosts two sports teams, the best-performing team appears in the ranking.

The 10 Most Successful Financial Advertisers Right Now

Written by


advertising-11-23-18.pngFinancial institutions have long struggled to stand out in the marketplace and build their brand.

This is because they offer very similar products and services to consumers. But a clear strategy and well-defined corporate culture—and a story told with an effective advertising campaign—can help prospective clients understand what makes a bank special.

We’ve put together a list of banks that do that well.

To identify successful advertisers in the banking space, Bank Director focused on two key metrics: number of impressions—how many times a company’s ads were viewed on TV—and the average estimated cost per impression for each brand. This second metric is weighted to account for peak vs. non-peak advertising times. Together, the two metrics reward a balance between brand reach and an effective use of ad dollars.

Each metric was ranked, and the final score represents an average of the two ranks. In cases where the average of the two was a tie, the bank with the most impressions earned the higher score.

Credit unions and lenders that compete directly with banks are included, along with retail and commercial banks.

Bellevue, Washington-based iSpot.tv, an analytics firm that uses smart televisions to track ad activity, provided the data. The measurement was based on national ad activity from Jan. 1 through Sept. 10, 2018.

The ranking doesn’t account for the creativity of each bank’s advertising, but a compelling, creative ad with clear messaging can be effective in achieving the bank’s strategic goals.

Fifth Third Bancorp was savvy with its ad dollars, at $0.12 per 1,000 impressions, and placed second in the ranking. Its ad campaigns during the time period generated 442 million impressions.

The most buzz for the regional bank came from is its “Fee Sharks” ad, part of the “Banking a Fifth Third Better” branding campaign.

“The overall goal of [the Fifth Third Better] campaign is to build the Fifth Third Bank brand,” says Matt Jauchius, the bank’s chief marketing officer. “We believe that a stronger brand leads to growth and profitability for the bank overall.”

The campaign has been effective, resulting in a 21-percent increase in brand consideration over a roughly one-year period. Brand consideration is a metric Fifth Third and other companies use to measure the likelihood customers would consider the brand the next time they’re looking for a particular product or service. In banking, that tends to be whether a customer would consider the institution for their primary banking relationship—usually a checking account.

“Effective advertising needs to be rooted in a truth about the brand itself,” says Robert Lambrechts, the chief creative officer at Pereira & O’Dell. The San Francisco-based advertising agency worked with Fifth Third on the brand campaign.

“Find the thing that is true about your brand,” he advises. “[Be] honest with yourselves about who you are [and] what you want to do.”

The Fifth Third team found ties between its core value to go above and beyond and the bank’s unique name: Fifth Third employees give more than 100 percent—166.7 percent, to be precise—to help their customers.

Ads like the fee shark are quirky, memorable ways to highlight products, services and features—like fee-free ATMs. All the ads in the branding campaign feature a plucky young woman clad in a blue suit, with a Fifth Third pin and distinctive glasses, who serves as a brand ambassador and a proxy for the bank’s employees. She communicates the brand promise: that the bank works hard to meet the customer’s needs.

Fifth Third uses internal and third-party data to better understand what prospective customers want, how to motivate them, and when and where to place the ad effort—whether that’s on TV or radio, in print, on a billboard or on social media.

JPMorgan Chase & Co. topped the ranking, generating more than 5 billion impressions and spending a little more than an estimated $7 per 1,000 impressions—the fifth most cost-effective of the financial institutions examined in the ranking. The bank has run a number of TV spots in 2018. The ad with the most impressions—“Michaela’s Way,” featuring ballerina Michaela DePrince—promotes Chase QuickPay, which includes the real-time payments solution Zelle.

Donna Veira, chief marketing officer for Chase’s consumer banking and wealth management divisions, told AdAge: “We looked at all of the day-to-day, practical ways in which our customers are using QuickPay and brought those to life.”

Other spots show how easily tennis star Serena Williams uses the bank’s cash-free ATMs, or promote the bank’s business solutions and investment advice.

Most Successful Financial Advertisers

      # of Impressions Estimated cost per 1,000 impressions
  1 JPMorgan Chase & Co. 5,371,208,561 $7.36
  2 Fifth Third Bancorp 441,698,444 $0.12
  3 Citigroup 3,862,125,267 $13.44
  4 PNC Financial Services Group 1,400,939,671 $12.64
  5 Capital One Financial Corp. 545,702,921 $12.56
  6 Regions Financial Corp. 210,530,040 $12.29
  7 PenFed Federal Credit Union 144,093,408 $1.77
  8 Purepoint Financial
(division of MUFG Union Bank, N.A.) 		46,254,915 $1.11
  9 SoFi 1,477,462,492 $15.60
  10 Ally Bank 1,495,976,740 $16.20

Data source: iSpot.tv