The Art of Acquisition

Wooing Retail Bank Customers

in the Digital Age
OC TOBER 2021

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 Introduction
There’s something almost self-
contradictory about the term customer
acquisition. The word acquisition
implies one-sided procurement—hardly
something applicable to the two-way
relationships expected by today’s
consumers.
It’s good then that banks also talk
about fostering customer relationships,
which begin when banks and potential
new customers are introduced at the
acquisition stage. Both assess whether
the other is a right fit, and like most
relationships, the right impression on
a “first date” can lay the foundation
for a rewarding and loyal partnership.
Nobody—neither bank nor customer—
wants to invest time or money on a
string of bad dates.
The less digitally savvy the bank, the
harder it is, if not impossible, to connect
with the right prospects that lead to
long-term relationships. Add in laws
that complicate certain uses of data
that would otherwise be important for
marketers trying to connect with the
right audiences, and a lasting connection
can be as elusive as it is expensive.
At the same time, evolving consumer
preferences sparked by the global health
crisis created a runway for innovation,
with 42% of companies increasing their
1. Mastercard-sponsored Harvard Business Review Analytic Services report, Become 2021.
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innovation dollars during the pandemic.1
This led to major investments by fintech
companies, unconventional entrants
and traditional players in creating a new
banking experience and new products.
Not only have consumer preferences
and behaviors changed but so have
the way banks respond to the changes.
As consumers’ digital preferences
accelerated during the pandemic,
the line between traditional retail
banks and fintech companies blurred
and competition among all financial
institutions increased.
As the pandemic continues to have
implications on global economies and
consumers, retail banks will need to keep
up with evolving consumer behavior
to drive growth. Customer acquisition
strategies must include access to quality,
first-party data and the ability to
generate insights and continuously refine
tactics.
This report looks at:
• Some of the challenges faced by retail
banks in digital acquisition
• A five-step approach to acquisition
• Stories about how retail banks have
approached acquisition
2
 The Challenge
“Consumers have The global health crisis accelerated digital adoption by at least two years,
which dramatically impacted the way consumers interact with brands.2
reduced their reliance Nearly 70% of consumers are more likely to prefer a brand that offers an
on face-to-face easy and convenient digital experience.3 That’s expected to increase as 88%
interactions with their of consumers expect companies and brands to accelerate digital initiatives
and capabilities and accelerate the move to a digital-first future.4 And for
banks as nearly 90% banking specifically, consumers expect 74% of interactions with financial
of consumers who did services to be digital.5
not use banking apps
The word digital in digital banking is largely redundant now.6 The digital
before Covid now evolution in banking was inevitable with companies like Amazon, Netflix
plan to continue using and Spotify delivering digital experiences that consumers then came to
them. ” expect from non-digitally native brands. Then Covid-19 hastened the
shift to digital as people sought out contactless, convenient and safer
shopping experiences. In retail, inventory-light showrooms are fusing with
immersive commerce online. Bank branches, once a staple for attracting
new customers, are undergoing a similar evolution to remain relevant.7
Consumers have reduced their reliance on face-to-face interactions with
their banks as nearly 90% of consumers who did not use banking apps
before Covid now plan to continue using them.8

2. Mastercard Recovery Insights: Commerce E-volution, 2021.

3. Mastercard-sponsored Harvard Business Review Analytic Services report, Become 2021.
4. Salesforce, State of the Connected Consumer, 2021.
5. Appnovian, February 2021.
6. “Dropping ‘digital’ from digital banking: 5 Trends for 2020.” Banking Dive, 13 January 2020.
7. “A New Leaf for the Bank Branch.” Banking Dive, July 26, 2021.
8. Mastercard’s “Global State of Pay” report.

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 Breaking through the noise to connect with consumers in the digital era and deliver
impressive marketing ROI has become more challenging for a few reasons:

Data limits impact consumer connection

Regulations beyond geographic borders, such as the Brussels effect stemming from
the EU’s General Data Protection Regulation or the California effect stemming
from the California Consumer Privacy Act, make privacy adherence a global priority
regardless of location.9 Coupled with risk policies and the elimination of third-party
cookies, banks that were already grappling with identifying and engaging with
consumers are even more challenged in using data to understand online consumer
behavior. These factors have similarly made it harder to control acquisition costs.
Cost per click (CPC) for financial institutions averages $160, and barriers on data can
serve to quickly increase the cost of making relevant connections with consumers.10

One size doesn’t fit all

The digital noise hitting today’s consumers is staggering between daily emails,
text messages, digital ads and social media posts. The challenge for any marketer
is creating relevant content and creative to capture the attention of in-market
consumers on the channels they prefer. Data and consumer insights are the way
marketers develop relevant content, creative and focus on the right channels.

Consumer journeys and insights are disjointed

Each step of the consumer journey, starting from the early stages of acquisition,
needs to be carefully designed and managed and with a clear purpose. Consumers
will go elsewhere if instructions or next steps are vague, the product is not relevant,
product information is confusing, and the call to action is unclear. In addition, the
consumer may not engage outside their preferred channels. With low engagement
and high abandonment rates comes high costs. Banks also struggle with deriving
meaningful insights across multiple channels, including internal sources, data
management platform partners, and online channels to inform journey design.

 any acquisition strategies may lack marketing

M
experimentation
Testing variations of audiences, content, calls to action, channels and creatives can
provide valuable insights on the right combination of offers and messaging, journey
design and relevant consumers. It also allows marketers to make quick changes when
consumers aren’t taking the desired action. Incremental enhancements add up over
time and can improve return on ad spend (ROAS), overall acquisition rates and cost
per acquisition. In addition, learnings can help inform planning and refine strategies
for future campaigns.

9. No More Chalk vs Cheese: The Coming Together of Business Competitiveness and Data Privacy.” Mastercard and
Trūata, June 2021.
10. Projected 2021 Average Cost Per Lead By Industry and Channel, Linchpin, June 2021.

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 Success in customer acquisition hinges on the ability to generate insights from
data to launch effective digital campaigns that identify, attract and convert
new customers. Consumers now expect re-imagined banking experiences that
are authentically digital-first, convenient and intuitive. This expectation applies
throughout the consumer journey, from discovering new products and card
applications to making payments and redeeming rewards.

The following five steps help banks develop impactful digital acquisition strategies:

#1 #2 #3 #4
Choose Capture Convince Close

#5 Calculate

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 Customer story: 1. Choose
Once the bank’s acquisition goals and business objectives are defined, the
A retail bank in Southeast first step in a digital-first marketing strategy is to define the types of new
Asia wanted to increase customers who will help the bank reach their goals.
digital acquisitions while
reducing marketing costs. More precise, data-driven audience identification is key to acquiring
Mastercard’s marketing high-value customers and maximizing long-term returns on marketing
experts helped increase investments. While generic open market acquisition efforts that focus on
overall ROI by focusing brand reach and conversion volume may yield higher card applications and
on discovering high-value new account openings, their impact on broader business performance can
audiences with advanced be stunted by low activation rates and engagement.
segmentation of anonymized
and aggregated transaction Identifying the right prospects to engage — whether for open market
insights. The analyses acquisition or cross-selling to existing customers — requires robust insights.
led to a refined prospect Combining insights on existing customers across a bank’s database with
audience with stronger third-party sources can paint a picture of existing high-value cardholders.
intent. The bank ran two This kind of analysis informs lookalike models that identify high-value
digital acquisition campaigns prospects for acquisition. Everything from an existing customers’ product
based on the new audience preferences to third-party insights on consumer travel intent, can offer
segmentation and saw better insight into what consumer groups will help banks meet their goals
an 18% increase in credit and maximize portfolio performance post-acquisition.
card approvals and a
42% decrease in cost per Payment networks can then enhance outreach efforts by overlaying
acquisition (CPA). anonymized and aggregated spend data. Cross-market spend insights
and global spend benchmarks can refine audience identification and other
insights to build relevant engagement strategies.

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 Customer story: 2. Capture
Identifying high-value audiences and refining the communication of a
Customer story: A bank in product’s value proposition to those audiences go hand in hand. The idea
southern Europe wanted to of tools like lookalike modeling is that audiences with similar traits to
expand beyond its network known audiences will be receptive to similar products. Ultimately, customer
of physical branches and acquisition plans that communicate all the product features that will
develop a digital presence. resonate the most with high-potential prospect groups, including the card
Covid-19 accelerated the benefits, user experience, loyalty programs and apps, will see greater
bank’s effort to move returns.
online. Mastercard helped
the bank define its digital This principle applies to each target audience and depends on data
value proposition and analyses from the “Choose” stage to understand what matters most to the
develop its first-ever fully consumer groups a bank wants to engage. Product positioning and offers
digital prepaid card to meet should be tailored based on what a prospect values in banking. For example,
the needs of cardholders if an audience group has a higher propensity to spend on travel based on
in-region. The acquisition aggregated and anonymized transaction patterns, a card with compelling
campaign’s messaging concierge and travel benefits is more likely to capture their attention. A
focused on what consumers different audience might be more likely to spend during the holiday season
needed the most at the so they will be attracted to cards that provide e-commerce partnerships or
time—a card that they could e-commerce package insurance.
apply for, use and manage
without ever setting foot And that alignment of audience preferences and products should continue
in a physical branch. The reinforcing the value proposition.
launch campaign increased
card applications by
45% and grew leads in
the acquisition funnel by
500,000.

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 Customer story: 3. Convince
The managing of someone’s money should be a truly personal experience
The pandemic pushed a and despite all the digital technology we interact with, consumers still want
retail bank in the Middle to feel that their bank understands their needs. This desire for personalized
East to launch a fully digital experiences still applies to what is often a consumer’s first interaction with
suite of products, including a a bank—the bank’s acquisition marketing.
checking account and debit
card. Many competitors in The third stage of a strong digital acquisition strategy focuses on
the region were launching convincing prospects with personalized copy and creatives. Knowing just
similar products, but digital the right thing to say and how to deliver it comes from practice. Sometimes
offerings were a sea of an emotional plea works best; other times, something more rational might
sameness in the region. be preferred.
Mastercard helped the bank
identify three audiences to Real-time analyses of campaign performance data can help identify ideal
focus on and then launched (and less than ideal) campaign approaches. Dynamic content then allows
a digital acquisition pipeline for continuous testing of tactics to finely tune and personalize messaging.
and campaign directed The result is a virtuous loop as this newly generated first-party campaign
at each of their identified performance feeds back into the first-party data provided by bank and
audiences. They tested payment networks to refine execution.
different creatives and
copy that Mastercard
designed and executed. By
testing different journeys
to convince consumers, the
bank was able to increase
account openings by 150%+
and app downloads by 2x.

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 Customer story: 4. Close
Even the most engaging conversation can sometimes go no further if the
A retail bank in Singapore environment isn’t right. Campaigns that perform higher up in the funnel can
wanted to develop a long- still fail to convert prospects into new customers if they aren’t delivered in
term digital acquisition audiences’ preferred channels. Customer acquisition also fails if the act of
strategy and test it with a signing up for an account or applying for a credit card is too clunky.
new campaign for its credit
card portfolio. The bank Some online acquisition channels may produce more volume. Others may
worked with Mastercard produce fewer, but higher quality or higher intent prospects. A measure
on a three-month digital of success can come from extending testing beyond click-through rates
media plan, including a to incorporate which clicks ended in conversions. After all, just because a
custom audience strategy message or creative enjoys broad appeal doesn’t mean that it’s reaching
with a focus on high- the right audience.
performing channels like
search, aggregators and Many traditional banks are taking inspiration from fintech innovators’
programmatic media. By nimbleness and adopting a “growth hacker” approach—growing the
focusing on high-potential business by testing, analyzing and prioritizing innovative, often data-driven
prospects based on behavior growth strategies. Channel performance can guide media allocations
and spend models, the new dynamically based on performance indicators and how consumers respond
strategy increased overall to creative, journey, channel and message.
card leads and applications
by 45% and 31% respectively, Banks are also focused on UX design in the actual conversion. For example,
and increased the quality of the ability to apply for an account on the spot doesn’t automatically remove
candidates applying for the the need for laborious form filling or guarantee real-time approvals. Open
credit card by 8%. banking is helping with functions like automated form filling, soft credit
scoring and instant know-your-customer verifications.11

Finally, to truly maximize the lifetime value of every consumer and

deliver long-term ROI, relationship-building and engagement strategies
begin the moment a consumer converts to a customer. For example, a
carefully mapped consumer journey and communication plan could focus
on welcoming a new cardholder, their first digital and in-store use of the
card—and even considers longer-term lifecycle management, including card
benefits and spend stimulation offers. It may even involve omnichannel
strategies, seamlessly transitioning from online to in-branch experiences
when a prospect applies online and activates in-person.

11. “Purposeful & Profitable: Financial Inclusion via Open Banking in the Middle East & Africa.” Mastercard, 2021.

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 Customer story: 5. Calculate
Data insights play an integral role in the matchmaking of a bank and
A fintech innovator in a new customer, as well as the ability to monitor the health of the
Brazil wanted to grow its institution’s portfolio engagement – this happens throughout the
digital acquisition pipeline consumer journey. From acquisitions to activations, multiple data
and increase the rate of streams allow institutions to find opportunities to continually dial up
cardholder activation. and improve areas in the customer journey where they may be losing
Mastercard helped the prospects.
company develop a new
omnichannel marketing Identifying and segmenting KPIs based on critical consumer engagement
strategy and built a points in the marketing funnel offers a targeted approach to generating
centralized dashboard insights about what’s working and what’s not in a bank’s strategy. It also
to measure and enhance provides opportunities to refine marketing tactics to boost results at
acquisition and conversion. every stage of the acquisition journey.
The fintech was able to
identify where it was losing Banks that have adopted an approach that mimics fintech innovators
prospects in the customer build these insights into an accessible, centralized dashboard that enables
journey—and improved its continuous measurement across the upper, middle and lower marketing
website landing pages and funnel. It also enables precise diagnosis of problem areas, such as high
deep links encouraging cross- levels of prospect attrition, and actionable insights to improve strategies.
channel interaction, mobile With continuous monitoring and refinement of creative messaging
downloads and account and visuals, audience performance, media investments and the digital
activation. The improvements consumer journey, banks will see incremental performance improvements
increased account openings and maximize ROI over time.
by 115% and even improved
organic conversion rates by
119%.

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More Resources
Banking’s Next Experiment:
Innovation in a Digital, Post-
Covid World
Rethinking Engagement:
Navigating the Card Lifecycle
Marketing Paradigm Shift
Banking’s Digital
Transformation Journey –
Middle East & Africa
New Approaches to Customer
Engagement & Loyalty
FOOTER DOCUMENT TITLE
The Art of Acquisition:
Wooing from Top to Bottom
With broader and more permanent adoption of digital everything, banking
acquisition strategies will be better served with the right data insights
that can help identify the right audiences, engage them with compelling,
relevant content and creative, and in the right channels with seamless and
connected digital experiences. The right wooing strategies should lead to
lasting customer relationships.
To learn more about how Mastercard is helping banks with digital
customer acquisition strategies, reach out to your representative or
the following expert:
Elena D’Andrea
Vice President, Product Management
Data & Services, Mastercard
www.mastercardservices.com
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