The pros and cons of direct mail campaigns for financial institutions
In the age of digital-first banking, direct mail has made a surprising resurgence. This marketing strategy involves sending a physical piece of collateral—a letter, brochure, package, postcard, etc.—directly to your prospect’s home address. Direct mail campaigns can result in higher conversion rates, larger sales pipelines, and a deeper personal connection with consumers, but they can also be expensive and tricky to execute. In this blog post, we’ll discuss the pros and cons of direct mail for lenders and other financial institutions.
Pro: Larger Sales Pipelines and Higher Conversions
The Direct Marketing Association recently found direct mail’s response rate is 4.4%, compared to 0.12% for email. This response rate is somewhat lower for financial institutions, but increased responses lead to higher conversion rates, which results in more qualified leads landing in your sales pipeline.
In fact, recent data shows that direct marketing efforts have response rates of up to 1.16% in the lending industry. While this number might not seem extraordinary, it is powerful for lenders. For example, when targeting and mailing up to 120,000 people, 1.16% means you have 1,392 respondents who are highly interested in your products or services. Then consider the fact that 75% of those respondents applied and 50% converted. Do the calculations—how much additional revenue would 522 funded loans mean to your institution?
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