Stat of the Month: Financial Services
The slowing economy affects all direct mail, of course, but the sector that always takes the biggest (and “direct”) hit is financial services. According to research complied by Chicago–based Mintel Comperemedia, mail from banking, credit card, investment and mortgage loan companies dropped a significant 12.7 percent in the first quarter of 2008 compared to the same period a year ago.
It seems banks and consumer lenders are reassessing their marketing to credit-stressed consumers, and both may also be peeling back their mail volume because of lower-than-usual response rates. Among financial services companies, credit card issuers slashed their direct mail the most, as their mail volume dropped by 14 percent in the first quarter; JP Morgan Chase & Co. cut its mail by a whopping 34 percent. Of course, the financial services sector still sends tons of mail, with 4.2 billion pieces in the first quarter, so it remains a dominant presence.
All this is borne out by researching our Who’s Mailing What! Archive, the world’s greatest library of direct mail. A continued examination of the first quarter, of the last three years, reaffirms these shifts and highlights some other trends among financial services companies.
While direct mail is down across the board, financial services companies cut back more than other mailers, as their percentage in the mailstream dropped to 11.1 percent after hovering above 12 percent for both 2007 and 2006. A significant shift in strategy is seen when looking at repeat mail, as it appears that this sector is sending out a higher percentage of new efforts while cutting back overall volume. In the first quarter of 2006, a full three-quarters of financial services mail consisted of efforts that prospects have seen before. In the first quarter of 2007 that percentage dropped considerably to 52.5 percent. In 2008, it dropped again, to 45.8 percent.