Organizing Personalization Around Revenue Goals: A 4-Step Method for Financial Institutions

Today, resource and process challenges still stand in the way of meaningful implementation regarding personalization for brands within financial services. It’s true that despite it being a top priority for companies in the industry, 63% reported resources for personalization are either limited or only made available on-demand after they’ve made a business case.

Additional findings on The State of Personalization Maturity in Financial Services uncovered that 83% of financial institutions experience program disruptions in the form of executive mandates prioritized over the existing personalization roadmap.

These issues often stem from a need for executive leadership to better understand the resources, data practices, roadmap building, and testing guidelines that facilitate high-performing personalization programs. For example, the same research found that 42% of executive leaders believed personalization to be a part of the organization’s DNA, compared to 19% of Middle Managers – those closer to day-to-day operations.

But rather than wait for change, personalization practitioners can do their part and help communicate their work’s value and impact in meaningful terms to the business by creating personalization revenue goals for finance. These goals will create a baseline to set realistic targets, whereby conversations about the necessary resources and processes for continued growth can flow.

Organizing your personalization program around revenue goals

Aligning your personalization strategy with revenue goals provides a clear framework for optimizing your efforts and driving scalable results.

Here’s how adopting this approach can make a difference:

Personalization can help teams fulfill many goals across the financial services customer lifecycle, but executives will always want to know its ultimate impact on the bottom line. The easiest way to do this is by organizing program activities around KPIs that drive towards a particular revenue goal, which we’ll discuss later.

One of the critical advantages of orienting your program around revenue goals is the clarity it provides in prioritization. Not all campaigns have an equal impact on revenue generation. By evaluating campaigns based on their potential revenue contribution, you can prioritize the ones with the highest potential impact as part of the more extensive personalization roadmap. This ensures you concentrate on initiatives that align with your institution’s financial objectives.

A revenue-driven approach empowers you to make data-driven decisions about where to allocate resources. You can double down on these strategies by identifying the campaigns that consistently drive revenue growth. Simultaneously, campaigns that aren’t yielding the desired results can be reassessed or adjusted. This iterative process enables you to optimize your efforts by concentrating resources where they matter most.

Ultimately, you create a solid foundation for growth by organizing your personalization program around revenue goals. Since you’re creating a measurement system that reflects the program’s success relative to itself and the actual value it brings to the business, greater executive engagement and sponsorship are fostered. This increased commitment and investment in the program can even bring about fewer organizational diversions from the roadmap and quicker growth.

A 4-step method for financial brands putting personalization revenue goals into practice

The foundational step toward effectively quantifying the impact of your personalization program is first to establish a clear revenue goal. One example might be to: “Increase revenue by 15% within the next fiscal year.”

This specific goal sets a measurable target and serves as a guiding star, directing all personalization efforts toward achieving a tangible impact on the institution’s revenue streams. Once you’ve defined your primary audience strategy, you can focus on how each audience contributes to that goal.

Using the example above, you should segment your audiences by engagement. The goal is to divide your audience into prospects, low-engagement customers, medium-engagement customers, and highly engaged customers – structuring your personalization roadmap around getting each audience to convert to the next step.

When your entire team is aligned with a shared revenue goal and knows how your personalization strategy relates to it, it generates a shared language that unifies different departments and stakeholders and creates a collective sense of ownership over the program’s success.

The next crucial step is to establish the principal Key Performance Indicators (KPIs) that align with each of your audience segments and contribute to your overarching goal. These KPIs will serve as quantifiable measures of the specific actions you aim for your consumers to take and should tie intricately to how you realize your revenue objectives.

We’ll illustrate how each principal KPI rolls up to our defined audience strategy:

Application Submitted: This KPI directly reflects the efficacy of user engagement among prospects that show intent and high intent among existing users by prompting them to take a critical revenue-generating action that would lead to acquisition or cross-selling. Increasing the number of applications submitted within a given time frame may be a good KPI for both prospects and highly engaged customers.

App Download: For low-engaged or new customers, consider increasing opportunities for day-to-day engagement with your FI brand. To do this, look at the number of app downloads following interactions with personalized marketing content as your KPI, as it sets the stage for future opportunities for on-demand messaging, like push notifications.

Reward/Offer Sign-Up: Finally, a reward or offer may be just the push medium-engaged customers need to take action. The number of opt-ins for these programs would be a significant KPI to track, ultimately contributing to increased revenue through enhanced customer loyalty and spending.

By establishing these principal KPIs, each aligned with a specific revenue-driving goal, you create a clear and measurable framework for evaluating the direct influence of your personalization program on your organization’s financial success. These indicators enable you to gauge the immediate impact and provide valuable insights into the effectiveness of your strategies, allowing for data-driven optimizations that further enhance your revenue-generating capabilities.

To ensure your personalization program is on the right path, establish secondary metrics—or more minor actions along the customer journey that pave the way for significant conversions—as signals you’re heading in the correct direction.

Some secondary metrics for FIs include:

Let’s revisit the objective of increasing the number of submitted applications. To create mini-milestones, you might establish the frequency of navigational interactions with the “Apply Now” page as a critical secondary metric. Each visit to this page represents a step closer to the ultimate goal of application submission. By monitoring these mini-milestones, you gain insights into users’ increasing interest and commitment, allowing you to adapt your personalization strategies in real time to enhance the likelihood of conversions.

In boosting participation in rewards or special offers programs, treating interactions with tools and critical pages as mini milestones can provide actionable insights. Consider the click-through rate (CTR) for users clicking on “Learn More” pages or engaging with calculators related to the rewards program. These interactions reflect a user’s interest in exploring the benefits and features of the program, akin to mini achievements on the path toward program sign-ups.

Secondary metrics aligning with user intent are milestones that signify growing engagement. For instance, as you aim to increase app downloads, tracking the CTR of a ‘Learn More’ or ‘Register’ CTA establishes a sequence of minor achievements. Each search signifies a user’s intent to gather more information, leading them incrementally toward the ultimate conversion of downloading the app.

Incorporating these secondary metrics as mini milestones infuses your assessment process with a dynamic perspective. Rather than viewing personalization outcomes as binary—success or failure—you develop a nuanced understanding of user progression. This view empowers you to optimize your personalization strategies iteratively, addressing bottlenecks and capitalizing on successful engagement points.

In the pursuit of translating your personalization program’s impact on potential revenue, it’s imperative to establish a concrete method for quantifying the monetary contribution of each principal Key Performance Indicator (KPI).

Formula to Associate Revenue to Your KPIs:

KPI Number x Percentage Take Rate x Revenue of Behavior = Total Potential Revenue

This formula encapsulates the interplay between user engagement (KPI Number), the likelihood of successful conversions (Percentage Take Rate), and the financial value of the behavior (Revenue of Behavior) to yield the Total Potential Revenue attributed to the KPI.

Let’s dive into each of these variables:

Before the campaign, you should review the average KPI rate for the last 30 days. (You can find this in your chosen analytics platform; if you’re using Dynamic Yield, it’ll be in your Audience Explorer). Using this rate, set an estimate of how much it will improve. After the campaign, you can identify the difference between the control and test variation.

Your Take Rate will depend on the metric you are viewing. For example, if you’re looking at app submissions, you’d look at historical data to understand the average apps submitted and the average number of users approved. On the other hand, the Take Rate would be 100% for metrics like reward clicks because those users thoroughly act on the web and/or app.

Connect the behaviors you’re trying to encourage with a similarly used business metric. For example, if you’re looking at application submissions, you could use the average spend of a new cardholder in their first year as your revenue metric.

If you’re unsure about your Revenue of Behavior, speak with your analytics team. Most will have an internal model used to calculate the revenue of the behaviors they’re trying to encourage.

Examples of Associating Revenue With KPIs

Here are two examples of the formula in action:

Application Submissions

Say you have 1,000 ‘Applications Submissions.’ If the average approval rate stands at 30% and the revenue associated with each application submission amounts to $150, you can then calculate the total revenue generated from this KPI as such:

1,000 (Number of Applications) x 30% (Approval Rate) x $150 (Revenue per Application Submission) = $45,000

App Download 

Imagine the number of clicks leading to ‘App Downloads’ is 10,000. Suppose the average completion rate of ‘App Downloads’ is 20%, and each ‘App Download’ is associated with a revenue of $25. In that case, you can then calculate the total revenue generated from this KPI as such:

10,000 (Number of App Download Clicks) x 20% (Completion Rate) x $25 (Revenue per App Download) = $50,000

It doesn’t have to be perfect.

Start your revenue calculation framework with estimates and use these numbers as an overarching barometer of your program. Once your first campaign is complete, you can plug in the actual numbers to cross-check your data against your estimate. You can refine your strategies based on the insights gained from these revenue calculations, continually steering your program toward enhanced revenue outcomes. The more data you collect, the more accurate your estimates will become.

Revenue goals set a healthy foundation for your program’s long-term growth.

Centering your personalization program around revenue goals offers a range of advantages. A revenue-driven strategy can guide your financial institution’s personalization journey from accurate impact assessment to resource allocation, prioritization, and roadmap planning. It is the key to unlocking executive understanding and alignment and the first step in maturing your organization’s personalization program. Setting comprehensive revenue goals sets a strategy that becomes a competitive advantage in sustainable growth and success in the ever-evolving financial services landscape.