Financial Services Back in the Direct Mail Game
With the economy showing its ugly face to everyone in 2009, financial services mail dropped off significantly to previous levels. But the first quarter of 2010 tells a different story.
According to Synovate Mail Monitor, the direct mail tracking service from global market research firm Synovate, the first quarter of 2010 saw a 29 percent increase in credit card offers, with U.S. households receiving 481.3 million offers compared to only 372.4 million in Q1 of 2009.
"Throughout the remainder of the year we expect to see mail volume continue its slow climb upward," said Anuj Shahani, director of competitive tracking services for Synovate's Financial Services group. "This is a massive commitment in terms of expenditure for the issuers, as direct mail is one of the most expensive channels to acquire new cardholders. This tells us that the issuers are not just dipping their toes in the water, they are diving in head first."
The same trend is borne out by our Who's Mailing What! Archive, the most complete library of direct mail. Notably, the financial services-comprising credit card and mortgage and loan offers, along with investment and banking offers-sector is making a comeback! In 1Q 2008, before the economy went to pieces, financial services dominated the mailstream to the tune of 11.1 percent. It dropped all the way to 5.8 percent in 1Q 2009, but has surged back to 8.1 percent in 1Q 2010 — that's a 28 percent increase.
The other dominant trend noticeable is a huge increase in premiums. Despite the huge drop in financial services direct mail between 2008 and 2009, premium usage stayed about the same at 30 percent. But it zoomed all the way up to 46 percent of efforts in 1Q 2010, as big a rise as you will see in any direct mail category. In other words, nearly half of all the financial services mail pieces had a premium offer — a calculator, a calendar, a pen — inside.
The only other increase was in self-mailer formats, which rose by over 8 percentage points in 2009 from 2008 and then by 13 percent in 1Q 2010. Clearly, financial mailers are testing to see if this format will work for them. Meanwhile, personalization usage actually backslid for the second year in the row, down to 66.3 percent of efforts compared to 75.3 percent in 1Q 2009 and 79.3 percent in 1Q 2008.
Otherwise, repeat mail stayed at a relatively low figure again, just like 1Q 2009, compared to 2008 when nearly half of the mail were controls — at 35 percent.