CASE STUDY

How Marketing Analytics in Banking Helped to Optimize the Client’s Marketing Spend?

May 24, 2022

Highlights of the Case Study: 

Particulars Description 
Client A leading bank that sought to improve transparency in marketing spending and outcomes 
Business Challenge Our client wanted to assess the suitability or appropriateness of their current marketing practices vis-a-vis the returns. 
Impact Quantzig’s marketing decision-making framework helped our client reduce the risk of misallocating or underfunding high-priority marketing campaigns and initiatives. 

Game-Changing Solutions for Banking Industry 

Banks and other BFSI industry players make marketing decisions that involve branding campaigns and promotions, allocation of budgets for ad platforms, and identifying the channels and frequency of media touchpoints. They need to evaluate the impact of these on a weekly, monthly, or quarterly basis to assess customer acquisition costs (CAC). In an age of limited personnel resources, time, and budgets, marketers in the BFSI industry must continuously seek to improve marketing outcomes with limited spending. Many of these marketers tend to overlook and undervalue common signals for marketing decision making, such as the following: 

  • Cost per acquisition (CPA) 
  • Return on Ad Spend (ROAS) 
  • Customer lifetime value (CLV) 
  • Net promoter score (NPS) 

The marketing analytics team at Quantzig provides an optimal solution to banks and marketers in the BFSI industry with our Marketing Decision Management framework. We help them determine how these common signals drive rewards, goals, costs, and risks.  

The Challenges of the Banking Client 

Our client employs various methods to drive business growth, such as television ads, digital and print media, and seasonal promotions. It also offers higher returns on fixed deposits during the festive seasons to incentivize customers to choose its services. These activities led our client to spend around $300,000 annually on its marketing campaigns without proactively budgeting. Quantzig worked with the bank to observe its existing marketing decision-making process and identify factors that can improve the transparency of its marketing spending and outcomes. 

Our client wanted to assess the appropriateness of its current marketing practices. Secondly, it sought to determine whether it was targeting its marketing expenditure and content toward the right audiences at the right time through the most relevant channels to achieve the requisite outcome. Lastly, it wanted our marketing analytics team to recommend and develop a new marketing decision-making framework to evaluate the effectiveness and results of its marketing campaigns.  

Quantzig’s Marketing Analytics Solution for Banks 

Banks generate vast amounts of data that can be leveraged to derive valuable insights. Quantzig’s marketing analytics team used Python as a coding language and machine learning concepts as statistical learning to analyze the marketing data of our clients in the banking sector.  

In this case, our team used a marketing decision-making framework based on data-mining techniques. Our framework measured the accuracy and precision of our client’s existing marketing strategies. As a part of this project, our team used a trend model and accurately predicted the monthly marketing expenditure of our client. Secondly, we used a data-driven customer behavior segmentation technique through our recency frequency monetary (RFM) model. Our model used Pareto values and CHAID decision trees to rank and cluster our client’s customers based on their recent transactions. These practices helped us identify if our client was targeting its marketing campaigns toward the correct customer group.  

Quantzig also examined how our client’s marketing activities impacted its performance over the years. We obtained data from primary sources via questionnaires and interviews with the client’s customers. Hypotheses were tested using techniques such as Spearman’s rank correlation coefficient and Kendall’s coefficient of concordance to determine a relationship between our client’s marketing budget and its profitability. 

The objective of our decision-making framework was to help our client’s marketing team understand whether they were targeting their campaigns toward the right customers. This analysis showed that the client could redirect its marketing spending to high-value clients and minimize the customer category that was least receptive to their services.  

Impact Analysis of Quantzig’s Marketing Analytics in Banking Industry 

Our marketing decision-making framework helped our client reduce its risk of misallocating or underfunding high-priority marketing campaigns and initiatives. Our team focused on universal benchmarks such as CLV, CPA, and NPS to determine whether the marketing spending would have a positive ROI compared to other capital allocation opportunities.  

The impacts of using Quantzig’s Marketing Decision Management framework were as follows: 

  • Reduced paid search advertising spend 
  • Expedited marketing budget development process from 3 months to 4 weeks  
  • An increase in the overall marketing budget for niche practices by 10% 
  • Enabled our client to generate an average of $20.12 for every dollar spent on marketing 
  • Witnessed a spike in high-deposit customers 
  • Achieved higher brand exposure 

Key Outcomes 

Quantzig’s deployment of the Marketing Decision Management framework enabled our client to optimize its marketing spending by targeting the right customers to achieve a higher ROI. Our interventions led our client to generate an average of $20.12 for every dollar spent on marketing. It also maximized its brand exposure while reducing its paid search advertising spend. Our scientific, data-backed analysis helped our client expedite the marketing budget development process from three months to four weeks. This quick turn-around time will have a significant role in achieving the client’s quarterly goals. 

Broad Perspective on Marketing Analytics in the BFSI Sector 

The global pandemic has set precedence for tighter marketing spend management across various sectors, and the banking sector is no exception. The marketing budgets of banks are closely scrutinized, and hence marketers need to redirect their spending toward higher revenue-generating channels. Quantzig’s data-driven approach helps marketers replace their existing marketing practices with our unique decision-making framework to develop a rational budgeting process. 

Key Takeaways 

The use of Quantzig’s Marketing Decision Management framework is beneficial in various ways: 

  • Reduces paid search advertising spend 
  • Helps to make marketing campaigns more effective 
  • Ensures higher conversion rates 
  • Achieves higher brand exposure 
  • Guarantees business growth and higher ROI

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