Marketing Spend Is Up. Results Are Not.
Customer acquisition is more expensive than ever. Financial institutions are pouring millions into traditional marketing—TV spots, radio buys, billboards, and direct mail—only to face shrinking returns, rising media costs, and audiences that are harder to engage.
Despite the effort and expense, these tactics often fall short of building the kinds of customer relationships that drive long-term value: accounts that grow, deposit, and stay. Today’s banks are stuck spending more to get less—and many don’t realize there’s a better way.
This guide takes a hard look at the true cost of the traditional marketing toolkit and offers a modern alternative: a strategy that lowers acquisition costs, grows sticky deposits, and deepens relationships with both individual and commercial customers.
We’ll break down:
The projected cost-per-acquisition (CAC) of traditional bank marketing channels like direct mail, billboards, and TV.
Why these channels often struggle to deliver lasting value.
How banks can unlock a smarter, more scalable approach to growth—without ballooning their ad budgets.
And in the final section, we’ll explore how strategic partnerships—like offering Health Savings Accounts (HSAs) through a partner such as Lively—can deliver measurable growth, lower costs, and higher returns, while positioning your bank as a trusted solution for today’s financially stressed consumers and employers.
The Cost of Traditional Channels: A Closer Look at CAC
1. Direct Mail: $600–$1,000 CAC
Direct mail remains a staple of financial marketing due to its trackability and personalization. But its effectiveness is waning in a digital-first world. Consider this:
Average response rate: ~4.4% (for existing customers), <1% for new prospects.
Cost per piece: $0.50 to $1.50 (including printing and postage).
Volume: To generate 100 new accounts, banks often mail 50,000+ pieces.
Estimated CAC: Assuming a 0.5% conversion rate, direct mail CAC typically ranges from $600 to $1,000 per new account, depending on targeting precision and offer value.
2. Television Advertising: $700–$1,200 CAC
TV offers scale and emotional storytelling, but comes with steep production and media costs:
30-second spot: $5,000 to $250,000+, depending on market.
Ad production: $20,000 to $100,000.
Targeting: Limited; hard to isolate individual campaign performance.
Estimated CAC: Upwards of $1,200 for consumer financial products, especially for younger demographics who increasingly consume digital media.
3. Billboards & OOH: $800+ CAC
Billboards build brand familiarity but offer limited attribution. Cost drivers include:
Rental cost: $2,000 to $15,000/month per location.
Design/printing: $1,000 to $3,000 per execution.
Measurement: Impressions-based; conversions are largely inferred.
Estimated CAC: Difficult to measure directly, but typically $800 or more per account when blended with supporting digital attribution.
4. Radio Advertising: $500–$800 CAC
Radio can hyper-target local markets but often lacks the conversion punch of digital. Costs include:
Spot cost: $200 to $5,000 depending on time slot and region.
Production: $500 to $5,000.
Reach: High frequency, but susceptible to ad skipping.
Estimated CAC: Around $500–$800, especially in major metropolitan areas.
Why CAC Alone Isn’t Enough: Understanding True Customer Value
Looking at Customer Acquisition Cost (CAC) in isolation can be misleading. To evaluate marketing performance and strategic growth, financial institutions need to assess the actual value of a new customer over time—especially for deposit-driven products.
Let’s break down a common scenario for a newly acquired account:
Assumptions:
Average balance: $1,500
Interest paid to customer: 0.05%
Net interest margin (NIM): 4.5%
Duration: 180 days (6 months)
CAC: $650
The Result:
Over six months, the institution earns $32.87 in net interest income on the held deposits.
If the customer also uses a debit card regularly—with ~$8,400 in spend over the same period—that generates about $42 in interchange revenue (assuming a conservative 1% interchange rate).
Total 180-Day Value:
$32.87 (interest spread)
$42.00 (interchange revenue)
Total: $74.87
Net Outcome:
$650 CAC – $74.87 return = -$575.13
That’s a -88% ROI over six months.
How Long to Break Even?
With no debit card activity, it would take nearly 10 years to recoup the $650 acquisition cost at current deposit yields.
With average debit engagement, the break-even window shortens to approximately 4.3 years.
What This Means for Financial Institutions
These numbers highlight the importance of driving down CAC and increasing account value early in the relationship:
Traditional acquisition tactics (with CACs ranging from $600–$1,200) are hard to justify unless accounts produce additional revenue streams, higher balances, or longer tenure.
Cross-selling, product bundling, and engagement strategies can help—but they take time and may not offset a high upfront spend.
Sustainable growth comes from aligning acquisition channels with products that deliver both low CAC and strong, long-term deposit value.
In today’s margin-sensitive environment, a smarter acquisition strategy isn’t just nice to have—it’s a financial imperative.
A New Path Forward: HSAs and Strategic Partnerships
From Advertising to Asset Generation
As the previous section made clear, a CAC of $600–$1,200 can only be justified if the customer delivers meaningful, sustained value. But in many cases, the math simply doesn’t work. Even with healthy balances and debit card usage, it can take years to break even—unless the acquisition cost comes down or the account becomes more valuable over time.
That’s where Health Savings Accounts (HSAs) offer a compelling alternative.
By embedding HSAs into your core offering, financial institutions can reduce CAC, increase long-term deposit value, and attract high-quality retail and commercial relationships—all while avoiding the long payback periods associated with traditional acquisition strategies.
Why HSAs?
High-balance, high-retention accounts: Over 37 million HSA accounts now exist, totaling more than $123 billion in assets.
Steady growth: 62% of HR leaders expect HDHP enrollment to increase in the coming year, expanding the HSA-eligible market.
Commercial opportunity: 78% of employers already offer HSAs—often managed by third-party providers—creating room for banking relationships.
Sticky deposits, not just sticky products: Because HSA funds are restricted to IRS-qualified medical expenses, they are less likely to be withdrawn for everyday spending. The result: balances that sit, grow, and generate stable, high-retention deposits for the institution.
By shifting from high-spend, low-return marketing tactics to value-driven partnerships, banks can turn their acquisition strategies into asset-generation engines—capturing deposits, increasing margin, and building customer relationships that actually pay off.
The CAC Difference: Lower Cost, Higher Value
Traditional advertising channels often result in customer acquisition costs (CAC) ranging from $600 to over $1,200 per new account. While these tactics can deliver reach and brand lift, they require substantial media investment and offer no guarantee of long-term deposit growth or meaningful customer engagement.
As outlined in the earlier analysis, when the average customer delivers just $75 in value over 180 days, this CAC model becomes difficult to justify—especially in a margin-sensitive environment.
HSA partnerships offer a compelling alternative. Rather than relying solely on paid media, financial institutions can leverage embedded distribution, commercial benefit alignment, and product utility to significantly lower CAC—often to under $100 per new account.
Here’s what drives the efficiency:
Co-marketing and distribution alignment: Many modern HSA providers offer integrated marketing support, co-branded materials, and digital onboarding tools that reduce the need for standalone campaign investment. For financial institutions, this can mean acquiring accounts with little or no direct advertising spend.
Operational efficiency: Managing HSAs in-house often results in unprofitable accounts—an estimated $69 loss per account per year due to fulfillment, compliance, and support costs. Partnering with a third-party provider can eliminate these internal burdens, turning HSAs into a net-positive product line.
Deposit ownership and revenue opportunity: Under the right model, the financial institution retains the HSA deposits while the partner handles administration. This structure allows banks and credit unions to benefit from interchange, interest margin, and fee revenue—without having to invest in the underlying infrastructure.
Scalability through specialization: With access to support, education, and customer service resources purpose-built for HSAs, financial institutions can grow these programs efficiently—especially for commercial clients who want bundled banking and benefits solutions.
In short, the difference isn’t just in CAC. It’s in the total cost-to-serve, the long-term revenue opportunity, and the strategic alignment with where customer demand is heading.
The Bottom Line: Smarter Growth, Measurable ROI
Comparing CAC and ROI: Traditional vs. HSA Partner Model
Channel | Estimated CAC | Deposit Growth | Long-Term Value | Operational Burden |
Direct Mail | $600–$1,000 | Low–Moderate | Variable | Medium |
Television | $700–$1,200 | Low | Short-term | High |
Billboards/OOH | $800+ | Awareness only | Low | Low |
Radio | $500–$800 | Low | Short-term | Medium |
HSA Partnership | < $100 | High | High | Low |
Assumes minimal marketing spend and use of a partner-based HSA distribution model with deposit ownership retained by the financial institution.
Conclusion: Rethink the ROI of Marketing Spend
Traditional media tactics have their place—but for financial institutions seeking profitable, durable relationships, they’re no longer enough. The economics don’t lie: when CAC exceeds potential account value for years, even well-branded institutions are operating at a loss.
Strategic alternatives like HSA partnerships offer a way forward: lower acquisition costs, higher retention, and more meaningful deposits. By aligning acquisition with real customer utility—especially in health and financial wellness—institutions can move beyond transactional advertising toward scalable, sustainable growth.
The future of financial marketing isn’t about visibility alone. It’s about delivering value that lasts.
Lively for Financial Institutions