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• Strategies for Reducing Bank Customer Acquisition Cost [2024]

  24 septembre 2024, par Daniel Crough — Banking and Financial Services

  Acquiring new customers is no small feat — regardless of the size of your team. The expenses of various marketing efforts tend to pile up fast, even more so when your business operates in a highly competitive industry like banking. At the same time, marketing budgets continue to decrease — dropping from an average of 9.1% of total company revenue in 2023 down to 7.7% in 2024 — prompting businesses in the financial services industry to figure out how they can do more with less.

  That brings us to bank customer acquisition cost (CAC) — a key business metric that can reveal quite a bit about your bank’s long-term profitability and potential for achieving sustainable growth. 

  This article will cover the ins and outs of bank customer acquisition costs and share actionable tips and strategies you can implement to reduce CAC.

  What is customer acquisition cost in banking ? 

  

  The global market volume of neobanks — fintech companies and digital banking platforms, often referred to as “challenger banks” — was estimated at $4.96 trillion in 2023. It’s expected to continue growing at a compound annual growth rate (CAGR) of 13.15% in the coming years, potentially reaching $10.44 trillion by 2028.

  That’s enough of an indicator that the financial services industry is now a highly competitive landscape where companies are often competing for the attention of a relatively limited audience. 

  Plus, several app-only banks based in Europe have made significant progress in attracting new customers to their financial products : 

  

  Unsurprisingly, this flurry of competition is putting upward pressure on customer acquisition and retention costs across the banking sector.

  Customer acquisition cost (CAC) — the sum of all costs and resources related to acquiring an additional customer — is one of the key business metrics to keep an eye on when trying to maximise your return on investment (ROI) and profitability, especially if your company operates in the banking industry.

  Here’s the basic formula you can use to calculate the cost of acquisition in banking : 

  Customer Acquisition Cost (CAC) = Total Amount Spent (TS) / Total New Customers Acquired (TNC)

  In essence, it requires you to divide the total cost of acquiring consumers — including sales and marketing expenses — by the total number of new customers your company has gained within a specific timeframe.

  There’s one thing you need to keep in mind : 

  The customer acquisition process involves more than just your marketing and sales departments. 

  While marketing and sales channels play a crucial role in this process, the list of expenses that may contribute to customer acquisition costs in banking goes well beyond that. 

  Here’s a quick breakdown of the customer acquisition cost formula to show you which costs make up the total amount spent : 

  • All advertising and marketing costs, including traditional (direct mail, billboards, TV and print advertising) and digital channels (email, Google ads, social media and influencer marketing)
  • Cost of outsourced marketing services, including any independent contractors involved in the process 
  • Salaries and commissions for the marketing team and sales representatives
  • Software subscriptions, including marketing software and web analytics tools 
  • Other overhead and operational costs 

  And until you’ve taken all these expenses into account, you won’t be able to accurately estimate how much it actually costs you to attract potential customers.

  Another thing to keep in mind is that there’s no universal definition of “good CAC.” 

  The average customer acquisition cost varies across different industries and business models. That said, you can generally expect a higher-than-average CAC in highly competitive sectors — namely, the financial, manufacturing and real estate industries. 

  Importance of tracking customer acquisition cost in banking 

  

  Customer acquisition costs are an important indicator of a banking business’s potential growth and profitability. Monitoring this fundamental business metric can provide data-driven insights about your current bank customer acquisition strategy — and offers a few notable benefits : 

  • Measuring the performance and effectiveness of different channels and campaigns and making data-driven decisions regarding future marketing efforts
  • Improving return on investment (ROI) by determining the most effective strategies for acquiring new customers 
  • Improving profitability by assessing the value per customer and improving profit margins 
  • Benchmarking against industry competitors to see where your business’s CAC stands compared to the banking industry average

  At the risk of stating the obvious, acquiring new customers isn’t always easy. That’s true for many highly competitive industries — especially the banking sector, which is currently witnessing the rapid rise of digital disruptors. 

  Case in point, the fintech market alone is currently valued at $312.98 billion and is expected to reach $556.70 billion by 2030, following a CAGR of 14%.

  

  However, strong competition is only one of the challenges banks face throughout the process of attracting potential customers. 

  Here are a few other things to keep in mind : 

  • Ethical business practices and strict compliance requirements when it comes to the privacy and security of customer data, including meeting data protection standards and ensuring regulatory compliance
  • Lack of personalisation throughout the customer journey, which today’s customers view as a lack of understanding of — and even interest in — their needs and preferences 
  • Limited mobile banking capabilities, which further points to a failure to innovate and adapt — one of the leading risks that financial services may face 

  7 strategies for reducing bank customer acquisition costs 

  

  When working on optimising your banking customer acquisition strategy, the key thing to keep in mind is that there are two sides to improving CAC : 

  On the one hand, you have efforts to decrease the costs associated with acquiring a new customer — and on the other, you have the importance of attracting high-value customers. 

  1. Eliminate friction points in the customer onboarding process

  One of the first things financial institutions should do is examine their existing digital onboarding process and look for friction points that might cause potential customers to drop off. After all, a streamlined onboarding process will minimise barriers to conversion, increasing the number of new customers acquired and improving overall customer satisfaction. 

  Keep in mind that, at the 30-day mark, finance mobile apps have an average user retention rate of 3% : 

  

  That says a lot about the importance of providing a frictionless onboarding experience as a retail bank or any other financial institution. 

  Granted, a single point of friction is rarely enough to cause customers to churn. It’s typically a combination of several factors — a lengthy sign-up process with complicated password requirements and time-consuming customer identification or poor customer service, for example — that occur during the key moments of the customer journey.

  In order to keep tabs on customer experiences across different touchpoints and spot potential barriers in their journey, you’ll need a reliable source of data. Matomo’s Funnels report can show you exactly where your website visitors are dropping off. 

  2. Get more personalised with your marketing efforts 

  Generic experiences are rarely the way to go — especially when you’re contending for the attention of prospective customers in such a competitive sector. 

  Besides, 62% of people who made an online purchase within the last six months have said that brands would lose their loyalty following a non-personalised experience. 

  What’s more shocking is that only a year earlier, that number stood at 45%.

  

  When it comes to improving marketing efficiency and sales strategies, 94% of marketers agree that personalisation is key : 

  

  It’s evident that personalised marketing supported by behavioural segmentation can significantly improve conversion rates — and, most importantly, reduce acquisition costs. 

  Of course, it’s virtually impossible to deliver targeted, personalised marketing messaging without creating audience segments and detailed buyer personas. Matomo’s Segmentation feature can help by allowing you to split website visitors into smaller groups and get much-needed insights for behavioural segmentation. 

  3. Build an omnichannel marketing strategy 

  Customer expectations, behaviours and preferences are constantly evolving, making it crucial for financial services to adapt their customer acquisition strategies accordingly. Meeting prospective customers on their preferred channels is a big part of that. 

  The issue is that modern banking customers tend to move across different channels. That’s one of the reasons why it’s becoming increasingly more difficult to deliver a unified experience throughout the entire customer journey and close the gap between digital and in-person customer interactions. 

  Omnichannel marketing gives you a way to keep up with customers’ ever-evolving expectations :

  Adopting this marketing strategy will allow you to meet customers where they are and deliver a seamless experience across a wide range of digital channels and touchpoints, leading to more exposure — and, ultimately, increasing the number of acquired customers.

  Matomo can support your omnichannel efforts by providing accurate, unsampled data needed for cross-channel analytics and marketing attribution. 

  4. Work on your social media presence 

  Social networks are among the most popular — and successful — digital marketing channels, with millions (even billions, depending on the platform) of active users. 

  In fact, 89% of marketers report using Facebook as their main platform for social media marketing, while another 80% use Instagram to reach their target audience and promote their business. 

  

  And according to The State of Social Media in Banking 2023 report, nine out of ten banks (89%) consider social media is important, while another 88% are active on their social media accounts. 

  That is to say, even traditionally conservative industries — like banking and finance — realise the crucial role of social media in promoting their services and engaging with customers on their preferred channels : 

  It’s an excellent way for businesses in the financial sector to gain exposure, drive traffic to their website and acquire new customers. 

  If you’re ready to improve social media visibility as part of your multichannel efforts, Matomo can help you track social media activity across 70 different platforms. 

  5. Shift the focus on customer loyalty and retention 

  Up until this point, the focus has mainly been on building new business relationships. However, one thing to keep in mind is that retaining existing customers is generally cheaper than investing in customer acquisition activities to attract new ones. 

  Of course, customer retention won’t directly impact your CAC. But what it can do is increase customer lifetime value, contributing to your company’s revenue and profits — which, in turn, can “balance out” your acquisition costs in the long run.

  That’s not to say that you should stop trying to bring in new clients ; far from it. 

  However, focusing on increasing customer loyalty — namely, delivering excellent customer service and building lasting business relationships — could motivate satisfied customers to become brand advocates. 

  As this survey of customer satisfaction for leading banks in the UK has shown, when clients are satisfied with a bank’s products and services, they’re more likely to recommend it. 

  

  Positive word-of-mouth recommendations can be a powerful way to drive customer acquisition. You can leverage that by launching a customer referral program and incentivising loyal customers to refer new ones to your business. 

  6. A/B test different elements to find ones that work 

  We’ve already underlined the importance of understanding your audience ; it’s the foundation for optimising the customer journey and delivering targeted marketing efforts that will attract more customers. 

  Another proven method that can be used to refine your customer acquisition strategy is A/B or split testing. 

  It involves testing different versions of specific elements of your marketing content — such as language, CTAs and visuals — to determine the most effective combinations that resonate with your target audience. 

  Besides your marketing campaigns, you can also split test different variants of your website or mobile app to see which version gets them to convert. 

  Matomo’s A/B Testing feature can be of huge help here : 

  

  7. Track other relevant customer acquisition metrics 

  To better assess your company’s profitability, you’ll have to go beyond CAC and factor in other critical metrics — namely, customer lifetime value (CLTV), churn rate and return on investment (ROI). 

  Here are the most important KPIs you should monitor in addition to CAC : 

  • Customer lifetime value (CLTV), which represents the revenue generated by a single customer throughout the duration of their relationship with your company and is another crucial indicator of customer profitability 
  • Churn rate — the rate at which your company loses clients within a given timeframe — can indicate how well you’re retaining customers 
  • Return on investment (ROI) — the revenue generated by new clients compared to the initial costs of acquiring them — can help you identify the most effective customer acquisition channels 

  These metrics work hand in hand. There needs to be a balance between the revenue the customer generates over their lifetime and the costs related to attracting them.

  Ideally, you should be aiming for lower CAC and customer churn and higher CLTV ; that’s usually a solid indicator of financial health and sustainable growth. 

  Lower bank customer acquisition costs with Matomo 

  Acquiring new customers will require a lot of time and resources, regardless of the industry you’re working in — but can be even more challenging in the financial sector, where you have to adapt to the ever-changing customer expectations and demands. 

  The strategies outlined above — combined with a thorough understanding of your customer’s behaviours and preferences — can help you lower the cost of bank customer acquisition.

  On that note, you can learn a lot about your customers through web analytics — and use those insights to support your customer acquisition process and ensure you’re delivering a seamless online banking experience. 

  If you need an alternative to Google Analytics that doesn’t rely on data sampling and ensures compliance with the strictest privacy regulations, all while being easy to use, choose Matomo — the go-to web analytics platform for more than 1 million websites around the globe. 

  CTA : Start your 21-day free trial today to see how Matomo’s all-in-one solution can help you understand and attract new customers — all while respecting their privacy. 

• What is Web Log Analytics and Why You Should Use It

  26 juin 2024, par Erin

  Can’t use JavaScript tracking on your website ? Need a more secure and privacy-friendly way to understand your website visitors ? Web log analytics is your answer. This method pulls data directly from your server logs, offering a secure and privacy-respecting alternative.  

  In this blog, we cover what web log analytics is, how it compares to JavaScript tracking, who it is best suited for, and why it might be the right choice for you. 

  What are server logs ? 

  Before diving in, let’s start with the basics : What are server logs ? Think of your web server as a diary that notes every visit to your website. Each time someone visits, the server records details like : 

  • User agent : Information about the visitor’s browser and operating system. 

  • Timestamp : The exact time the request was made. 

  • Requested URL : The specific page or resource the visitor requested. 

  These “diary entries” are called server logs, and they provide a detailed record of all interactions with your website. 

  Server log example 

  Here’s what a server log looks like : 

  192.XXX.X.X – – [24/Jun/2024:14:32:01 +0000] “GET /index.html HTTP/1.1” 200 1024 “https://www.example.com/referrer.html” “Mozilla/5.0 (Windows NT 10.0 ; Win64 ; x64) AppleWebKit/537.36 (KHTML, like Gecko) Chrome/91.0.4472.124 Safari/537.36” 

  192.XXX.X.X – – [24/Jun/2024:14:32:02 +0000] “GET /style.css HTTP/1.1” 200 3456 “https://www.example.com/index.html” “Mozilla/5.0 (Windows NT 10.0 ; Win64 ; x64) AppleWebKit/537.36 (KHTML, like Gecko) Chrome/91.0.4472.124 Safari/537.36” 

  192.XXX.X.X – – [24/Jun/2024:14:32:03 +0000] “GET /script.js HTTP/1.1” 200 7890 “https://www.example.com/index.html” “Mozilla/5.0 (Windows NT 10.0 ; Win64 ; x64) AppleWebKit/537.36 (KHTML, like Gecko) Chrome/91.0.4472.124 Safari/537.36” 

  192.XXX.X.X – – [24/Jun/2024:14:32:04 +0000] “GET /images/logo.png HTTP/1.1” 200 1234 “https://www.example.com/index.html” “Mozilla/5.0 (Windows NT 10.0 ; Win64 ; x64) AppleWebKit/537.36 (KHTML, like Gecko) Chrome/91.0.4472.124 Safari/537.36” 

  Breakdown of the log entry 

  Each line in the server log represents a single request made by a visitor to your website. Here’s a detailed breakdown of what each part means : 

  • IP Address : 192.XXX.X.X 
    • This is the IP address of the visitor’s device. 
  • User Identifier : – – 
    • These fields are typically used for user identification and authentication, which are not applicable here, hence the hyphens. 
  • Timestamp : [24/Jun/2024:14:32:01 +0000] 
  • • • The date and time of the request, including the timezone. 
  • Request Line : “GET /index.html HTTP/1.1” 
    • The request method (GET), the requested resource (/index.html), and the HTTP version (HTTP/1.1). 
  • Response Code : 200 
    • The HTTP status code indicates the result of the request (200 means OK). 
  • Response Size : 1024 
    • The size of the response in bytes. 
  • Referrer : “https://www.example.com/referrer.html“ 
    • The URL of the referring page that led the visitor to the current page. 
  • User Agent : “Mozilla/5.0 (Windows NT 10.0 ; Win64 ; x64) AppleWebKit/537.36 (KHTML, like Gecko) Chrome/91.0.4472.124 Safari/537.36” 
    • Information about the visitor’s browser and operating system. 

  In the example above, there are multiple log entries for different resources (HTML page, CSS file, JavaScript file, and an image). This shows that when a visitor loads a webpage, multiple requests are made to load all the necessary resources. 

  What is web log analytics ? 

  Web log analytics is one of many methods for tracking visitors to your site.  

  

  Web log analytics is the process of analysing server log files to track and understand website visitors. Unlike traditional methods that use JavaScript tracking codes embedded in web pages, web log analytics pulls data directly from these server logs. 

  How it works : 

  1. Visitor request : A visitor’s browser requests your website. 
  2. Server logging : The server logs the request details. 
  3. Analysis : These logs are analysed to extract useful information about your visitors and their activities. 

  Web log analytics vs. JavaScript tracking 

  JavaScript tracking 

  JavaScript tracking is the most common method used to track website visitors. It involves embedding a JavaScript code snippet into your web pages. This code collects data on visitor interactions and sends it to a web analytics platform. 

  

  Differences and benefits :
  

  Privacy : 

  • Web log analytics : Since it doesn’t require embedding tracking codes, it is considered less intrusive and helps maintain higher privacy standards. 

  • JavaScript tracking : Embeds tracking codes directly on your website, which can be more invasive and raise privacy concerns. 

  Ease of setup : 

  • Web log analytics : No need to modify your website’s code. All you need is access to your server logs. 

  • JavaScript tracking : Requires adding tracking code on your web pages. This is generally an easier setup process.  

  Data collection : 

  • Web log analytics : Contain requests of users with adblockers (ghostery, adblock, adblock plus, privacy badger, etc.) sometimes making it more accurate. However, it may miss certain interactive elements like screen resolution or user events. It may also over-report data.  

  • JavaScript tracking : Can collect a wide range of data, including Custom dimensions, Ecommerce tracking, Heatmaps, Session recordings, Media and Form analytics, etc. 

  Why choose web log analytics ? 

  Enhanced privacy 

  Avoiding embedded tracking codes means there’s no JavaScript running on your visitors’ browsers. This significantly reduces the risk of data leakage and enhances overall privacy. 

  Comprehensive data collection 

  It isn’t affected by ad blockers or browser tracking protections, ensuring you capture more complete and accurate data about your visitors. 

  Historical data analysis 

  You can import and analyse historical log files, giving you insights into long-term visitor behaviour and trends. 

  Simple setup 

  Since it relies on server logs, there’s no need to alter your website’s code. This makes setup straightforward and minimises potential technical issues. 

  Who should use web log analytics ? 

  Web log analytics is particularly suited for businesses that prioritise data privacy and security.

  Organisations that handle sensitive data, such as banks, healthcare providers, and government agencies, can benefit from the enhanced privacy.  

  By avoiding JavaScript tracking, these entities minimise data exposure and comply with strict privacy regulations like Sarbanes Oxley and PCI. 

  Why use Matomo for web log analytics ? 

  Matomo stands out as a top choice for web log analytics because it prioritises privacy and data ownership

  

  Here’s why : 

  • Complete data control : You own all your data, so you don’t have to worry about third-party access. 
  • IP anonymisation : Matomo anonymises IP addresses to further protect user privacy. 
  • Bot filtering : Automatically excludes bots from your reports, ensuring you get accurate data. 
  • Simple migration : You can easily switch from other tools like AWStats by importing your historical logs into Matomo. 
  • Server log recognition : Recognises most server log formats (Apache, Nginx, IIS, etc.). 

  Start using web log analytics 

  Web log analytics offers a secure, privacy-focused alternative to traditional JavaScript tracking methods. By analysing server logs, you get valuable insights into your website traffic while maintaining high privacy standards.  

  If you’re serious about privacy and want reliable data, give Matomo’s web log analytics a try.  

  Start your 21-day free trial now. No credit card required. 

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• Revision 29747 : On incrémente la version du plugin

  8 juillet 2009, par kent1@… — Log

  On incrémente la version du plugin