Conversions Don’t Matter: The Key Metrics for Credit Unions and Banks

Credit unions and banks frequently default to tracking metrics as the primary method to gauge the success of their efforts. The main metric often used is "Conversions," encompassing everything from clicks to completed applications. But are we tracking the right information?

Conversions serve as the backbone of marketing and sales efforts, but they don't always provide the full picture. While people may visit your website or click on a link, that doesn't guarantee it will lead to a filled-out application. More crucially, it doesn't always result in an application being approved and funded. These are the metrics that genuinely matter.

From Theory to Practice:

Let’s look at real world data from a community lender in a non-NBA metro area. Here are their top three campaigns as Facebook reports them in Ad Manager:

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Your agency is probably focused on clicks and might tell you campaign (B) is the winner. But you want to dig deeper as there is more to this story.

Your first question is “how many loan applications did we get from these campaigns?” Let’s put that data in.

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With this additional information, engagement campaign (B) is not looking so great. So should we move forward with Campaign (A)?
But what if Campaign (A)’s applications were garbage? How many of these applications became funded loans? 

Every denied application costs you money for no return, weakens your brand equity, and clogs your underwriting department.

You’re a growth marketer who cares about value, so let’s keep going. How many dollars in lending did we book and how much profit will we book from these loans?

Now that we have value, we can calculate the ratio of Value to Cost. Most growth marketers look for this ‘magic ratio’ to be 3 or higher. The higher it is, the more gas you should pour on that fire.

Now you know what to do next month!:

• You’re leaving money on the table with your Geo Car Buyer campaign. It’s too small, since every dollar spent on this campaign adds $8 in value to the business
  Increase spend by 25% and monitor the magic ratio for decline.
  
• Your AA ticket campaign might be worthwhile, depending on the cost of the give-away and the back-end effort required to fulfill the incentive.
  
• Your engagement campaign is destroying value. Kill it and try something different.

The real success begins now, with this new information in hand. The focus pivots toward the right metrics. By doing so, efforts can be optimized, and funded dollars can be increased without spending an extra penny on marketing. By shifting the focus to metrics such as approved and funded applications, a whole new level of success can be unlocked using the resources you already have.

More clicks doesn't always equate to completed applications, and completed applications don't automatically lead to approved and funded accounts. It's essential to track metrics that genuinely matter; otherwise, you're left with guesswork.