How To Calculate The Bang For Your Marketing Bucks

Two credit unions offer tips for tracking and evaluating dollar return on promotions and campaigns.
Catherine Siskos

The day after mailing a promotional offer or hosting a booth at a community event is never the end of a marketing assignment. Instead, it’s just the beginning of one of the most important and difficult parts of these campaigns assigning a real dollar value to the return on that investment.

To demonstrate that a particular campaign or promotional offer boosted business or earnings, marketing executives need an indisputable way to measure those results so that they can’t be attributed to something else the credit union did. In the fuzzy world of consumer behavior, finding such a clear correlation might seem as elusive as the Holy Grail, but as more credit unions look for ways to slash costs and maximize the value of every dollar spent, marketing executives who don’t calculate that return are asking for a budget cut.

It’s an essential piece of information, says Rich Jones, senior vice president for marketing, business development, and business intelligence at Eli Lilly Federal Credit Union ($1B, Indianapolis, IN). If you don’t keep track of that return and your marketing department needs more money, the first thing your CFO is going to ask is What’s in it for me?’

The best answer to that question lies in the following tips and strategies.


  • HQ: Medford, OR
  • ASSETS: $854M
  • MEMBERS: 75,553
  • 12-MO SHARE GROWTH: 4.86%
  • 12-MO LOAN GROWTH: 2.97%
  • ROA: 1.47%

Make Your Efforts Easy To Trace

Whether it’s a promotional mailing or a marketing event, you need a strong causal link to the results. And promotional offers mailed to select members or honored for a limited time help restrict where the business came from, making it easier to trace. Rogue Credit Union ($854M, Medford, OR), for instance, typically times promotional offers to coincide with the dozens of community events it hosts each year as a way to better track results.

The offers have a definitive stop and start time, says Jeanne Pickens, Rogue’s senior vice president of marketing.

Promotional offers that involve non-credit union partners can also help pin the results on a specific marketing campaign. Through its Cars for Kids program, Eli Lilly and its dealer partner each donated $100 to a local hospital for every car the cooperative financed through the program. These joint donations made it easy for marketing to attribute $421,000 in new auto loan balances to Cars for Kids.

Categorize Marketing Costs

At Eli Lilly, Jones allocates his marketing expenses according to key performance indicators such as member growth, loan balance acquisition, and deposit balance growth. The categorization makes it easier to track costs associated with a particular goal, like membership growth. But it also generates a treasure trove of performance data from past marketing campaigns including the Cars for Kids program the credit union has offered in years past, which helps Jones set an achievable goal.

This last year we wanted to create $300,000 in new auto loans based on our performance history in prior years, and we blew that goal out of the water, says Jones of the credit union’s $421,000 windfall in new loans.

Gauge Results With Performance Metrics

Demonstrating that marketers brought in a certain amount of new business is only half the battle. To make the case that those marketing efforts were worthwhile, you need to calculate a real dollar return on that investment, which Rogue regularly does.


  • ELI LILLY Federal credit union
  • HQ: Indianapolis, IN
  • ASSETS: $1B
  • MEMBERS: 59,382
  • 12-MO SHARE GROWTH: 2.80%
  • 12-MO LOAN GROWTH: 7.79%
  • ROA: 1.17%

Last summer, Pickens launched the credit union’s Switch campaign to coax new and existing members to refinance an auto or RV loan. The campaign generated approximately $35 million in refinanced loans, which had a weighted average interest rate of 2.97% the metric used to gauge the return. The credit union determines this weighted average rate based on the income the loans are expected to generate as well as what it could have made by investing the funds elsewhere. To calculate the return, however, Pickens uses ultra conservative numbers by factoring in much-lower-than-expected interest income and all of the costs associated with attracting the loans, even non-marketing expenses.

Some of those costs included a total of $65,000 for marketing and more than $500,000 in member incentives. In the end, the credit union was left with a 37.8% return on its investment, Pickens says.

The Switch campaign, though, was not Pickens’s crowning achievement for the year. That’s because although Switch generated the most loan growth of any marketing campaign in 2013, it also offered the lowest return for the credit union’s marketing dollars.

A separate promotion to attract RV loans produced the highest return a whopping 1,880%. And that marketing promotion, which resulted in $22 million in loans, will generate about $902,400 in net income the first year alone in return for a $45,000 marketing investment plus another $3,000 in staff incentives.

The RV promotion offers a painful truth to marketers who want to dazzle a chief financial officer with a spectacular result: that is, a strong return has less to do with marketing brilliance than it is does with mathematics.

Even though the Switch promotion generated twice as much loan volume, the loans from the RV promotion produced a higher return because they were for larger balances and returned a higher yield, Pickens says. Lower investment rates at the time also helped beef up the return by raising an already high weighted average interest rate even further.

Conduct A Post-Mortem

Every marketing endeavor calls for some Monday morning quarterbacking. After the Switch campaign, Pickens and her team wondered if they could have improved their return by adjusting the rate up or reducing the incentives.

It’s a numbers game, she says. Would we have attracted as many loans if we had a rate that was 50 basis points higher? That’s the kind of after analysis we do.

If Rouge were to offer the promotion again, Pickens would adjust the incentives for the credit union’s staff.

We wouldn’t have to drive our staff as much since so much of the business was coming word of mouth, she says.

At Eli Lilly, every promotional offer gets a similar post-mortem, and the department tracks and analyzes results for as many as 30 different marketing pieces every quarter. The team considers which promotional mailings work and which ones need fixing. If the latter, then the department conducts even more analysis to determine how to improve marketing performance.

There are three variables to review, Jones says. You may have had the wrong mailing list, a bad offer, or you didn’t tell a compelling enough story for members to act on the offer.

In his experience, it’s rarely the third.

Accept That Some Returns Will Always Be Fuzzy

The community events that Rogue engages in run the gamut from sponsoring charity fund drives to hosting a local festival, and these marketing efforts help raise awareness about the credit union while articulating its Living Local brand. But determining a return for those branding efforts is murky territory. I can come up with a number, but I don’t have a lot of confidence in it, Pickens says.

As an alternative, she takes the total number of attendees and divides it by the total marketing cost for the event. This produces a metric Pickens calls dollars per community member touched. Although the metric doesn’t help her determine how successful her efforts were at promoting the credit union’s brand, it does offer a straight cost-benefits analysis of how much she spent to reach each member.

Understand How Credit Unions Make Money

The most impressive returns for marketing dollars are almost always related to loans. Too many marketers focus their efforts on increasing deposits or membership, Jones says, but that’s not how credit unions make money.

They take member deposits and loan them out at margin, he says, and it’s that net interest margin that you want strong results for. At the end of the day, consumers don’t want a loan, Jones adds. They want a car and a home. So marketers need to understand that they’re not out pitching loans; they’re pitching dreams.

April 11, 2014

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