A Look Inside Financial Services Direct Mail

October 2006 By Tracy A. Gill

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Each month, nearly a fifth of the mail collected by the Who’s Mailing What! Archive, a direct mail research service maintained by North American Publishing Co. (parent company to Target Marketing) comes from the financial services sector. With that much volume, the Archive often sees a number of interesting trends pop up among these mailers. Here’s a look at five areas where these mailers had some compelling activity in the first half of 2006.

• APRs. Looking at APRs within the credit card sector can yield a number of interesting findings. For example, in the first half of 2006, the dominant APR was 0 percent, accounting for 71.3 percent of all applicable credit card offers (about 52 percent of the Archive’s total financial services volume). APRs in the range of .1 percent to 5 percent were second at 12 percent; 15.1 percent to 20 percent was third at 10 percent; and the 5.1 percent to 10 percent range was fourth at 2.9 percent. Almost half—42.3 percent—of these special APRs applied to both purchases and balance transfers. Some 34.3 percent were used just to drive balance transfers, and 23.4 percent applied only to new purchases.

Looking into that popular 0 percent APR, 41.1 percent of the time that rate was good for more than a year. In 26.4 percent of offers, it was applicable for exactly a year, and 14.4 percent of efforts offered it for six months. In 3.7 percent of efforts, card holders got to hang on to their 0 percent APR for life. In presenting these time periods, the majority of mailers—63 percent—opted to give a specific end date, such as “0 percent APR through September 2007,” rather than a number of months, such as “0 percent APR applies to first six billing cycles.”

• Premium/freemium use. Aside from the tchotchkes offered by local bank branches, premiums within the financial services sector are relatively scarce. Overall, they appeared in 27.9 percent of financial mailings in the first half of 2006; most of those were monetary in nature, such as cash refunds, airline miles, loyalty points or a best price guarantee. But tangible gifts were not completely unheard of. Union Fidelity, for example, offered a three-day/two-night vacation for two to Las Vegas, Orlando, San Diego, San Francisco or Reno with the closing of a refinanced loan; Universal Savings Bank gave out Dell Notebook computers to its credit card customers; Chase Manhattan promoted a free DVD player; Citibank made a B-to-C pitch with an iPod shuffle and a B-to-B offer of an HP Officejet printer; and MBNA tempted with T-shirts, jerseys, golf balls and photographs in efforts for its NFL, PGA and MLB affinity cards.

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