The Decline and Fall of Competent Direct Mail Why credit card mailings are bombing

August 2006 By Denny Hatch

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I’ve been reading obituaries since the age of 12, fascinated to see how entire lives have been summed up in a few paragraphs.

Last week a The New York Times headline about the passing of George Wetherill, 80, described him as an “Expert on Dating of Rocks.” Did dating of rocks mean determining their age? Or did he study people who liked to take rocks out to dinner and a movie? Either way, I wasn’t interested enough in his life and career to read on.

Nor am I real interested in people who spend their lives in the credit card business—the delivery of financial nicotine to consumers who’ve been sucked into having 12.7 credit cards per household and $800 billion in revolving debt.

Now, response to credit card direct mail offers is so poor—an average of just 3 orders per 1,000 as opposed to 28 per 1,000 in 1998—that the card purveyors are cutting back on mail and looking for other marketing techniques.

The financial services community is blaming the low response to mail on the avalanche of offers and the fact that many consumers have more cards than they need.

Having spent 15 years amassing an archive of direct mail samples and perusing tens of thousands of offers, I know why response is down.

The letters are lousy, with the content dictated by lawyers and then created by Neanderthals who don’t have a clue what they’re doing and who are psychologically incapable of making an emotional connection with the reader.

In the world of junk mail, financial services mailings are the worst junk of all.

It wasn’t always the case.

The American Express Platinum Card
My association with American Express goes back to the 1950s when my father was hired to write the company’s official corporate history. During those years the then-president, Ralph T. Reed, and his wife, Edna, used to spend summers at the Rockaway Hunt Club next door to us on Long Island, and during one of those summers—thanks to Reed putting in a good word—I worked as a mail boy at American Express corporate headquarters in downtown Manhattan.

I’ve been an American Express cardmember since 1964. When I was offered a Gold Card at a relatively young age, I immediately accepted the offer, proud as a peacock at having been raised to that exalted status of respectability.

My wife, Peggy, and I started the newsletter, Who’s Mailing What! in 1984—right around the time American Express launched its Platinum Card with what was no doubt one of the top 10 direct mail campaigns in history in terms of copy, design and irresistible elegance.

The mailing was lovingly produced using a Diablo printing system whereby each envelope, letter and order card was individually hand fed into an IBM Selectric typwriter that was driven by a central computer. What follows is my description of the process from the May 1987 issue of Who’s Mailing What!

If we had to pick the splashiest solo mailing to go out in six-figure numbers over the past two years, the American Express Platinum Card effort would win hands down. It travels in a closed-face 7-3/4” x 4-5/8” envelope of exquisite Artimus Text paper with platinum embossing and 1/8” platinum edge on the envelope flap. Inside is a three-page personalized letter on matching paper with a reproduction of the card embossed in metallic platinum, and a metallic platinum edge at the top of page 1. The second and third sheets have the platinum edge only. There is a matching BRE. The acceptance form is on slightly heavier stock. A beautiful 4” x 7-1/2” 16-page four-color brochure spells out features. Interestingly, the only place price is mentioned is on page 3 of the letter.

Why is this mailing so splashy? Quite simply because it is a rare example of direct mail technical perfection—from a mailer willing to pay for that perfection. It is produced by ABS in Wichita, Kansas, an organization that has 155 Diablo printers and over 200 people who match and insert all the components by hand. Most clients send “tape, text and art” and ABS takes the job through completion—always guaranteeing to meet the deadlines that have been contracted for. For virtually all clients, ABS chooses paper and envelopes, and produces mailings in which the outer envelope, order form and page 1 of the letter are personalized. Additional pages of the letter are offset and collated along with any brochures and the BRE.

For the Platinum Card effort here’s the drill: American Express ships in a load of single sheets of Artimus Text paper (with Consumer Card Group President Edwin Cooperman’s signature pre-printed in blue on sheets to be used for page 3), matching envelopes and order forms. Each effort is completely typed on the same Diablo printer so there is an exact match—outer envelope, page 1 of the letter and the order form. Because American Express is insistent that the entire letter be an exact match, pages 2 and 3 of the letter are also typed on that same Diablo printer, even though there is no personalization! The mailing goes out Presorted First Class with two 18 cent U.S. postage stamps. Only American Express knows the actual cost, because they are supplying paper and brochures. But an educated guess would be somewhere between $1,000-$1,100/M—and that’s with no list rental (the mailing goes only to American Express cardmembers).

Is the mailing successful? It’s been mailed for over two years, and there are currently a quarter-million Platinum Card members paying $250 a year for a cool $62.5 million a year in dues alone. To get these kinds of numbers, response would have to be well into two figures. While most ABS clients (Sotheby’s, Porsche, Learning International, Value Line) have units of sale in excess of $75, The National Trust for Historic Preservation is using a personalized effort whose average unit of sale is $17; according to Dolores McDonagh at the National Trust, the ABS package pulls up to 20 percent better, with the increased response making up for higher costs. Many traditional mail order people would slit their wrists rather than go for such an outrageous cost per thousand. But American Express—wisely, we think—is looking beyond CPM. The Platinum Card image is being upheld and enhanced, and members are pouring in at what must be a very attractive cost per order.

The great copywriter Bill Jayme wrote, “In the marketplace as in theater, there is indeed a factor at work called ‘the willing suspension of disbelief.’”

When the Platinum Card mailing arrived, it made you believe that it had been hand typed by the secretary to the president of American Express. What’s more, she then folded and inserted it, licked and sealed the envelope, affixed two stamps to the corner and placed it in the out box on her credenza.

Here is the lead from the letter:

Dear Denison Hatch,

The criteria for Platinum Card membership are quite demanding. In fact, those ultimately chosen are among our finest American Express® Card members.

Invitations are extended only to those Card members who deserve—and would appreciate—the added convenience, financial flexibility and security this Card provides.

Of the eight key copy drivers—the emotional hot buttons that cause people to act or change behavior—flattery ranks high on the list. Guru Axel Andersson, who has the world’s other great collection of direct mail samples, once did an analysis of control mailings. He discovered that 42 percent used flattery in the letter as the main copy driver.

American Express was a master of flattery.

Current Credit Card Mailings
Having described the great American Express Platinum Card mailing of the 1980s, I invite you to take a look at any current credit card effort that hits your mailbox or office inbox. The mailings for Visa, MasterCard, Citibank, Chase, Wells Fargo or any of the purveyors break all the rules of direct mail.

The letters use technical financial services argot when talking to consumers (e.g., “0% APR!”). The copy is laced with ®s, *s, **s, ***s, †s, ††s and †††s, followed by an avalanche of footnotes and paragraphs of qualifyers and disclaimers in sans serif mousetype, often printed in light gray so as to be purposely impossible to read.

The result isn’t a warm, fuzzy, emotional letter that has the reader salivating to acquire the product or service. Rather, it’s a frosty cold and intimidating quasi-legal document.

“Step right up,” the song lyric by Tom Waits proclaims, “the large print giveth, and the small print taketh away.”

“Letters should look and feel like letters,” said the late direct mail guru Dick Benson.

Many of these mailings have a letter printed to look like a brochure with big headlines and small type and a tear-off order from attached to the bottom.

A letter should contain carefully crafted copy that’s emotional and talks benefits to YOU the reader—NOT features of IT, the product.

Features belong in the brochure. Financial services agencies and copywriters haven’t been schooled in direct mail—a discipline that has been practiced and refined since 1194 A.D., when Bishop Renaud de Mouçon wrote letters to all the noble families of Europe asking for money to rebuild Chartres cathedral, which had burned to the ground.

Instead these financial writers are handed a stack of incompetent mailings by competing banks and ordered to knock them off, on the theory that so many of them are in the mail they must be pulling like gangbusters.

When they bomb, credit card executives think they can make their numbers by sending out even more of this incompetent junk until the mailing totals add up to billions.

The bad news: Your letter carrier has back strain from lugging these mountains of crap from house to house.

The good news: The United States Post Office is making a ton of money, which means we all pay less for First Class stamps.