ABA Banking Journal
No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
SUBSCRIBE
ABA Banking Journal
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive
No Result
View All Result
No Result
View All Result
ADVERTISEMENT
Home Retail and Marketing

Marketing and finance: bridging the gap

April 11, 2023
Reading Time: 5 mins read
Marketing and finance: bridging the gap

Establishing common definitions and employing visualizations to communicate data can help departments gain a better understanding of the metrics that matter.

By Jeremy Foster

Banks are more effective when departments work together toward common goals. While there are many articles, podcasts, etc. that talk about aligning teams, too many banks overlook disconnects that impeded achieving such a shared vision. Departments that are aligned around a vision and working toward common goals often don’t work as well together as they should, because they are using different languages and tracking progress toward goals differently.

Establishing common definitions and employing visualizations to communicate data can help departments gain a better understanding of the metrics that matter resulting in better collaboration and more effective decision-making. In this article, we will explore the power of aligning marketing and finance and look at some key metrics that can be used to help both departments work towards common goals.

The disconnect between marketing and finance

Marketing and finance are are notorious for their inability to communicate in many organizations. Traditionally, marketing has been viewed as a cost center, with little visibility into the ROI of campaigns. This often leads to tension between the marketing and finance departments, as finance is responsible for managing costs and ensuring profitability while marketing is focused on generating loans or growing deposits. Pressure for both departments to drive immediate results can sometimes lead either or both to sacrifice the organization’s long-term goals, even when both groups agree on what the long-term vision is. For example, if the bank is focused on growth, marketing may be emphasizing brand recognition and customer reach while finance is focused on increasing revenue. If the bank is focused on profitability, finance may be cutting budgets that the marketing department can actually use to generate profitability in the same year. These disconnects between the tactics and definitions of success used by each department can lead to inefficiencies, misaligned objectives and missed opportunities.

The power of a common language

The use of common terms and key performance indicators can help to bridge the gap between marketing and finance by making complex financial data easily understandable and actionable. By sharing data in a clear and concise way, multiple departments can gain a better understanding of the goals that matter to each other, leading to more informed decision-making and better collaboration.

rightwards arrow
View more
bank marketing articles.

For example, lifetime value, customer acquisition cost and total addressable market can all be tracked to provide insights that are useful to multiple departments. By breaking down these metrics into visual representations, such as charts, graphs and heat maps, banks can gain a deeper understanding of their customer bases and the impact of their marketing efforts.

Lifetime value

Lifetime value is a key metric that is used by both finance and marketing departments. By visualizing this data, businesses can identify patterns in customer behavior that allow them to make strategic decisions. At its simplest level, if the lifetime value of customers acquired through a certain marketing channel is higher than the cost of acquiring them, it may make sense to invest more resources in that channel.

Understanding lifetime value can also help banks identify their most valuable customers and tailor marketing campaigns to their needs. Better understanding of the sources of profitability and risk represented by customers can help marketing departments create targeted campaigns that resonate with their most profitable customers, and enable finance departments to better understand the opportunity and risk represented by concentration of specific customers.

Banking is one of the most complicated industries in which to measure consumer lifetime value, for several reasons. First, bank customers commonly have more than one product relationship with a specific bank—checking and savings accounts, mortgages, auto loans, etc. Checking accounts are often the centerpiece of a consumer-focused strategy (and usually should be, given that surveys have found customers tend to stick with their checking account for 15-20 years). But products such as mortgages are often more meaningful sources of profitability. Second, consumers may have the same product relationships across multiple banks. Several surveys have found that approximately 50 percent of customers have checking accounts at multiple institutions. Finally, because risk varies over time, interest rates also vary at different maturities or terms.

These factors can complicate pricing, leading banks who do not utilize funds transfer pricing or similar tools to mismanage risk. Larger banks often have relationship pricing modules, but many smaller l throw up their hands at the complexity and avoid measuring lifetime value at all. This is unfortunate, because there are some simple measurements that can provide valuable insight into lifetime value, even for banks who can’t afford the precision that comes with customer pricing and profitability modules.

Customer acquisition cost

Customer acquisition cost is another metric that is critical for both departments. By visualizing this data, businesses can better understand the costs associated with acquiring new customers. This information can then be used to optimize marketing campaigns and drive down costs. By breaking down customer acquisition cost by channel, banks can identify the most cost-effective channels and campaigns and allocate resources accordingly.

Visualizing customer acquisition cost can also help businesses identify areas where costs can be reduced. For example, if the cost of acquiring customers through social media is significantly higher than through other channels, banks may consider reducing their social media advertising spend. Similarly, if search engine marketing has been more successful at growing deposits than loans in one market and vice versa in another, reallocating marketing budgets to allow for better outcomes in each branch (and adjusting the deposit and loan growth goals for those branches to match) can make the marketing team and the branch managers more successful. Often while generating a higher return on investment for the bank.

Total addressable market

Finally, total addressable market is another metric that is useful to provide insights to both departments. For example, if a bank is considering expansion into a nearby community, it’s important for both marketing and finance to understand the number of customers in that market, the ease or difficulty in getting those customers to change their banking relationships, the products that are likely to be adopted in that community and the marketing budgets that will be required to succeed. Preferably before buying the land and hiring contractors.

Finance is the language of business, and it’s important for people to talk

Banks are built on relationships, both with their customers and internally. It’s often too easy for finance departments to allow their interactions to boil down to budgets and goals that are distributed via spreadsheet once a year. And it can be equally easy for bank marketing departments to focus on subjective measures such as whether a campaign or product “feels right.”. The best cure for both of those errors is frequent, rich conversations objectively informed by data between the departments. Finance teams can gain more understanding of a bank’s most important asset–its customers—from the nuance and context provided by the marketing team, and marketing professionals will be more successful when they approach their work from the context of a bank’s long-term financial and strategic objectives.

Jeremy Foster led retail banking, marketing and operations for a $500 million community bank . He is currently using his 20 years of experience in banking and financial technology as the chairman of Calque, Inc., a marketing and technology company that helps community lenders originate more mortgage loans by eliminating home purchase contingencies for their customers.

ADVERTISEMENT
Tags: Strategic marketing
ShareTweetPin

Related Posts

Fed analysis: Pandemic savings boom could be fueling inflation

Bank survey: Younger generations saving more money

Newsbytes
August 21, 2025

Younger generations are saving more money by making trade-offs to limit their spending, according to a new survey by Santander Bank.

Research finds finance industry leads in corporate social responsibility

Five tips for improving bank partnerships with nonprofits

Community Banking
August 21, 2025

Determining which organizations and programs in their communities banks should work with can be a major challenge.

Banker op-ed: Durbin-Marshall credit card bill will hurt small businesses

Survey: Financial strain leading to less reliance on credit cards

Newsbytes
August 19, 2025

More than half of U.S. credit card customers are “financially unhealthy,” with financial strain driving down card spending in 2025, according to a recent survey by J.D. Power.

Bank Community Engagement: Protecting teens from financial scammers

Bank-fintech partnership reboots families’ financial literacy journey

Financial Education
August 19, 2025

More financial institutions are offering technology and services to assist families in raising money-savvy kids.

Marketing Money Podcast: Marketing old products to new audiences

Marketing Money Podcast: More than a disclaimer – why compliance isn’t marketing

Retail and Marketing
August 8, 2025

Understanding how the role of compliance continues to change for bank marketers.

SEC repeals controversial crypto accounting rules for banks

Trump directs agencies to explore opening 401(k) plans to crypto, alternative assets

Human Resources
August 7, 2025

President Trump issued an executive order directing Secretary of Labor Lori Chavez-DeRemer to explore allowing the use of cryptocurrency and other alternative assets in 401(k) plans.

NEWSBYTES

OCC reduces semiannual assessment rates

August 29, 2025

Fed releases individual capital requirements for large banks

August 29, 2025

FDIC removes disparate impact from exam manual

August 29, 2025

SPONSORED CONTENT

10 Essentials of a New Loan Origination System

10 Essentials of a New Loan Origination System

August 29, 2025
Planning Your 2026 Budget? Allocate Resources to Support Growth and Retention Goals

Planning Your 2026 Budget? Allocate Resources to Support Growth and Retention Goals

August 1, 2025
Navigating Disruption in Ag Lending – Why Tariffs Are Just the Tip of the Iceberg

Navigating Disruption in Ag Lending – Why Tariffs Are Just the Tip of the Iceberg

July 1, 2025
AI Compliance and Regulation: What Financial Institutions Need to Know

Unlocking Deposit Growth: How Financial Institutions Can Activate Data for Precision Cross-Sell

June 1, 2025

PODCASTS

Demographic trends shaping the U.S. banking outlook

July 30, 2025

Podcast: How institutional banking helps build one regional bank’s strategy

July 24, 2025

The future of careers in risk and compliance

July 17, 2025
ADVERTISEMENT

American Bankers Association
1333 New Hampshire Ave NW
Washington, DC 20036
1-800-BANKERS (800-226-5377)
www.aba.com
About ABA
Privacy Policy
Contact ABA

ABA Banking Journal
About ABA Banking Journal
Media Kit
Advertising
Subscribe

© 2025 American Bankers Association. All rights reserved.

No Result
View All Result
  • Topics
    • Ag Banking
    • Commercial Lending
    • Community Banking
    • Compliance and Risk
    • Cybersecurity
    • Economy
    • Human Resources
    • Insurance
    • Legal
    • Mortgage
    • Mutual Funds
    • Payments
    • Policy
    • Retail and Marketing
    • Tax and Accounting
    • Technology
    • Wealth Management
  • Newsbytes
  • Podcasts
  • Magazine
    • Subscribe
    • Advertise
    • Magazine Archive
    • Newsletter Archive
    • Podcast Archive
    • Sponsored Content Archive

© 2025 American Bankers Association. All rights reserved.