Direct Mail For Banks: Why should you invest in it?
Have you ever noticed that out of all the direct mail you receive in your mailbox, most of them are from the financial institutions or banks promoting their recent offers or loans? It was and will always be one of the strongest marketing tools for banks, despite the prevalent albeit statistically dismissed statement that “direct mail marketing is dead.”
What Do The Statistics Have to Say?
2018 Direct Mail Response Rate Data from DMA reported that a staggering 67% of the financial service institutions like banks use direct mail marketing.
One of the famous marketing magazines, Target Marketing, periodically publishes a list of direct mail users every September. According to the latest report published in this magazine, banks are exponentially increasing their investment in direct mail marketing within the years.
Furthermore, the report stated that some of the biggest banks of The United States, such as American Express, Capital One, Citibank, Wells Fargo and Co, Bank of America, and others still use direct mail as an essential marketing tool. And it generates them a higher return on investment.
Wondering why banks are taking the traditional route when there are a plethora of digital marketing options available? Allow us to elaborate on why world-class banks still rely on the power of direct mail marketing:
Direct mail gets attention
No matter how technologically advanced we get, the homeowners still look forward to walking to their mailbox and checking if they have received any important mail. They spend a considerable amount of time going through them and check if they find anything of their use. Even at that particular moment, if what you are offering ever becomes their interest, your bank would be the first name that would come in their mind.
Direct mail is personal
With direct mail, you — as a financial institution marketer like banks — have the freedom to be as creative as possible and personalize the direct mailer, be it a flyer, brochure, postcard, or any marketing collateral. Personalization has the power to grab the attention of and engage the right audience with the right content at the right time. Direct mail marketing enables you to offer your direct mail services more humanely and intimately. A well-designed and personalized direct mail that directly goes in the hand of the consumers has a better chance of getting open and read, which significantly impacts the campaign’s outreach and effectiveness.
Direct mail relieves apprehension
Finance is a critical part of an individual’s life as well as the business’s operational cycle. Every investment, big or small, is made with careful consideration. And just like any other industry, banking is riddled with the facts and fiction, which makes consumers apprehensive of any investment. The technological advancement and proliferation in internet usage have further complicated their decision-making process. Direct mail, which can be personalized and made into an authentic piece, clarifies the skepticism that stops the consumers about the bank policies. It adds immense value to the consumer’s purchase cycle in banking services and strengthens the bank’s credibility.
Direct mail is less common
In this digital marketing era, where business across industry prefers reaching out to their customers through different online channels, offline communication is rare and can be leveraged. That’s why banks invest significantly in direct mail. They know that it’s not expected, which makes it even more appealing and worthy of attention. So, banks use direct mail to declare, slash in interest rates, new discounts on different types of loans, and other offers. They know that being less common will increase its open and readability rate.
Direct mail helps build a connection with the millennials
If you’re under the impression that millennials detest anything that is not advertised to them digitally, you are highly mistaken. If anything you’ll ever find them doing is dodging “in-the-face” digital ads that can be overwhelming at times. Millennials are on a lookout for something that can stand out of this digital noise, engage them, and make them feel valued. As the graph by USPS below suggests, compared to the non-millennials, millennials are more likely to open, read and share with relatively lesser possibility of throwing it without looking at it, given that it is well-written and the campaign is strategically executed.
Direct mail is easily accessed by senior citizens
Senior Citizens are often referred to as the greatest generation. It should not be a surprise that in this era of diverse digital options, which can be stressful to navigate, they always prefer the tangible and accessible direct mail personality. We can’t say they’re not inclined to communicate online, but they like paper-based offline communication and respond to it more quickly and frequently than the former.
Direct mail adds to the credibility
Relationships between banks and the customers are built entirely on trust. Every advertising tool is a mode to ensure consumers why they should trust their money with the respective bank. Being tangible and personalized, direct mail can generate a strong emotional response from the consumer, converting into profitable action. And that’s why direct mail marketing was and is still called the bank’s calling card.
Direct mail generates a better response
One of the leading trade organizations in the US, Direct Marketing Association, reported that when compared to the response rate of all the digital channels combined, direct mail marketing was still able to lead the competition by a factor of 10-30. Yes, despite being deemed an old and ineffective technique, which statistics have time and again proven wrong, banks make use of direct mail to garner higher response rates than the other tools. As banks have started executing more strategic direct mail, they have witnessed an increase in their response rate and overall ROI.
Direct mail is scalable
Giving away all the information about the loan, discount, or disclosure on the digital ad is seemingly impossible. You have to be very direct and concise, considering the short attention span of people browsing the internet. But that’s not the case with direct mails. It’s easy to send 20 pieces or 10 million mail pieces with it, which means direct mail can be made highly specific to the target audience. You can add as much information on the mailer piece, depending upon the audience you are targeting. Furthermore, with direct mail marketing, every process will be under your control, which frees you from the worry of committing any mistake and makes the entire process transparent for better supervision.
Direct mail is cost-effective
Digital campaigns through social media and other means require heavy investment- not just in terms of launching a campaign but also tracking the results. But, that’s not the case with direct mail marketing. The designing, printing mailing doesn’t burn a hole in your pocket. It is one of the most cost-effective ways to reach out to the audience in the masses. Furthermore, you can use dedicated phone lines to track your campaign results and find out which one of them is performing better and what you can do to make it more effective.
Direct mail won’t get spammed
Unlike its contemporaries, the email, direct mail does not get spammed. They reach the intended audience at the right time, increasing the possibility of them being open and read, even if they are of little to no interest in the prospect or target audience. This activity automatically increases the engagement rate. Highly targeted direct mail has relatively more power to boost the engagement and conversion rate significantly.
Now that you know why most banks are using direct mail as an integral part of their marketing efforts, you should know that one can only leverage the benefits of a direct mail campaign if they design and launch it strategically.
In the following section, we will discuss some of the best direct mail marketing tips for the banks.
Automate Direct mail Marketing
Bank officials have a lot on their plate as they deal with finances and another monetary aspect, they mustn’t be overburdened with the designing, printing, and mailing processes. Automate direct mail marketing with a credible direct mail automation tool like that offered by PostGrid. Empower your financial services business with a diverse range of templates that you can easily customize with an inbuilt editor. Right from designing, printing, building mailing lists, and shooting mail- every process will be done with just a few clicks, without compromising on the quality. Automating direct mail marketing will save significant time, money, and employee potential, which can be used to take the bank’s reputation ahead.
Add value to the mail
Include information and data in your direct mail like the latest tax strategies, price changes, guides to start the process, and more. The content should be highly targeted either in terms of radius or demographics to make the audience feel informed and valued. It will help in expanding your consumer base.
Make clear propositions
Direct mail has to be very crisp and clear about what they are offering. Do not be vague. Add a clear value proposition like the weaving fees or launch a set of packages collectively at a discounted price and an impressive call to action. Not only will this inform your consumers about the latest products and services but also significantly increase the response rate.
Never buy a mailing list
To a financial institution or any business in this context, we would advise against buying email lists. It will be like shooting arrows in the dark, which means you won’t get the desired response. So, it’s better to use an automation tool that comes with direct mail API and CRM integration. They’ll fetch and build a credible mailing list according to your requirement, and for all that you have to do is send the mail with a click.
Personalize as much as you can
Customization is not just a key to attract audience attention, but also engage and retain them for long term relationships. The more humane and personal the mail will feel to the recipient, the higher will be chances of conversion. Address them with their first name and conduct thorough research of your target audience’s background to personalize the direct mail better to increase the engagement and the response rate
Conduct quality control
Nothing irritates a consumer more than a poorly printed and grammatically flawed content. No matter the quality of service or the product you’re offering, if the content on the mailer is poorly written, your audience is going to throw it in the trash. How well-designed the direct mail is and the quality of the content will decide the response rate. Make sure to hire a proofreader to check for any grammatical or punctuation errors. Furthermore, make sure that the designs are clear, soft on the eyes, and are printed with supreme quality.
Run a few tests
Tests play an important rule in running offline communication and ensuring that every mail sent is receiving the kind of response expected. And if you find that a specific combination is delivering better results compared to other techniques, then you should go with the one that one ahead and launch your direct mail campaign for your bank. The best way to know which mail piece will work, which one will fall flat, and what areas of the mail pieces require immediate attention for improvement is to test them.
Allow your bank staff to channelize their knowledge, experience, and potential towards developing and implementing growth and development strategies for business, while PostGrid automates your direct mail marketing tool, assuring that the right mail reaches the correct address. The mailing accuracy never fails, despite the scale is, and maintains data safety and security throughout the process.
Streamlines and simplify your bank operation with PostGrid.