Direct Mail: Alive And Well In Financial Services

Subscribe to The Financial Brand via email for FREE!Each year, Target Marketing publishes a list of the of the year. The 2012 list has some interesting changes from 2011.

Among the top 5 mailers this year are three financial services firms: JP Morgan Chase in the top spot, followed immediately by Citigroup, and Discover at #5. Mutual of  Omaha, an insurer, just misses out on top 5 status in the sixth slot. Also among the top 50 was GEICO at number 16.

As a point of comparison, in 2011 only three financial services were on the list: Citi at #1, GEICO in the third position, and Mutual of Omaha at #4. Chase and Discover weren’t even top 50 last year.

Here’s my take on what could help explain these changes:

1. Credit cards are making a comeback. After a few lean years, some combination of three things — the economy, demographics, expanding target bands — are impacting the credit card market. The economy as a whole doesn’t appear to be improving too rapidly (if 2008-2009 was the Great Recession, then 2010-present is the Worst. Recovery. Ever.), but issuers may be seeing improving credit scores that are fueling their offers.

Demographics may be impacting that as well — older Gen Yers are solidly in their late 20s/early 30s, more established in their financial lives, and reaching a life stage (i.e., home ownership, starting families) where having access to credit is more important.

In addition, issuers may be expanding their targets to “marginally” high end consumers, and not just solidly high end prospects (most of whom probably have more cards than they need).

 2. The channel is performing. By all indications, credit cards demonstrate the highest rate of online product applications among major financial products. But although online research for credit cards is prevalent, that’s not to say the direct mail channel isn’t effectively driving consumers online to research, and ultimately apply.  I haven’t seen direct mail response rates recently, but with the financial troubles that the USPS has had, I’d bet they’re making it more economical for large mailers to run campaigns. So even if response rates haven’t improved, a lower cost of mailing drives up ROI.


The other aspect of channel performance that could be impacting the change in mailing volume is an improvement in analytical models. I’ve had a number of conversations over the past six months with leading marketing services providers who have talked about new analytical offerings driving improved performance, Equifax’s True In-market Propensity Scores being one example.

3. Other channels are under-performing. The reality of the card market might just be that no channel can drive customer acquisition like direct mail can. TV? I guess not. Email? Nope. Social media? Muwahahaha! You must be kidding be. It’s interesting to note here that JPMC, the new #1 in direct mail, is mentioned by nearly every financial services conference presenter as a “best practice” in social media for its Chase Giving Facebook page. Is it successful at driving large scale new cardholder acquisition? If it was, would Chase put as many resources towards direct mail as it does? Maybe, but I’d bet not.

Ron ShevlinRon Shevlin is Director of Research at . Check out more of his ideas and research on Cornerstone's And don't forget to follow him on Twitter at

This article was originally published on September 6, 2012. All content © 2018 by The Financial Brand and may not be reproduced by any means without permission.


  1. Interestingly, another reason the financial services industry continues to use direct mail is that it has been proven to be a channel people are more comfortable with when trying to learn more about how to manage their finances or decide on a new banking service. Surprisingly, recent research has found that even GenY and GenX segments prefer direct mail to digital channels due to the ability to evaluate options and make an informed decision.

    In addition, direct mail has been proven to be more effective when used in conjunction with other forms of direct communication, including email, digital and even social media. We have found that incremental response rates can still achieve an acceptable ROI when a cross-channel marketing strategy is implemented. The effectiveness of the other channels are also positively impacted by the use of direct mail.

    In the end, a test and learn mentality should always be leveraged to determine the optimal channel mix, sequence and cadence of communication. But in financial services (and other industries), direct mail is far from dead.

  2. Direct mail also allows card companies to target only consumers who have the level of creditworthiness the company seeks, unlike with other channels.

  3. Lisa Kuhn Phillips says:

    Good share, Ron. I also agree with Jim on the combo strategy. PUSH a personal mailer, positively PERSUADE ’em to consider (self) research, PULL’em into your site (web, fb, retail, atm, phone/online chat) and TAP the easy button (on a front page, or a prime locale, or a top two button).. a Ms. Obvious button, as in “GET CRED” , “WANT CRED” or “NEED CRED”.
    IF FI’s have fully integrated and mined their golden database, the CRED opportunities are…well…. “priceless”…. and what “the future takes”. And it all started with a personalized PAPER invite.

    Then~ when can we start talking about spend/save optimization features and benefits with a cross-solution product strategy? 😉

  4. Jim: Totally agree that “direct mail has been proven to be more effective when used in conjunction with other forms of direct communication…”

    But, man, I have a REAL tough time believing that “GenY and GenX segments prefer direct mail to digital channels due to the ability to evaluate options and make an informed decision.” It’s not even about preference. How can a piece of paper provide the interactivity that the online channel can? I simply can’t believe that “research.”

  5. According to the Epsilon December 2011 Consumer Channel Preference Study that surveyed consumers in both the U.S. and Canada, “. . .the preference for direct mail (due to the trust factor) extends to the 18-34 year old demographic in both the United States and Canada. This key demographic finding underscores the importance of avoiding assumptions on age and instead capitalizing on research that enables marketers to understand what consumers want and where consumers are going to find the information that eventually will be culled down to a purchase decision”. While there may be the tendency to consider this research within your definition of ‘quantipulation’, there was another study done by Acxiom that also found that direct mail was the preferred channel for financial services communication.

  6. A key factor that hasn’t been addressed here is the low approval rate that online credit card applications get. Most of the direct mail goes to pre-screened, conditionally pre-approved populations. Those who have to apply online are generally people with low credit scores or no previous credit.
    Another issue, even for 18-30 year olds, in the email arena is that financial solicitations might appear to be spam or scam.

  7. Good points, Bonnie. Thanks bringing them up.

  8. Most of the direct mail that goes out from card companies are pre-approved offers. By law, once a card company does a soft pull on consumers they have to send a firm offer to the consumer. Also, this firm offer has to be in the form of direct mail. Hence we see huge volume of direct mail from card companies.

    We see such great response rates on direct mail channel not because of the channel per say, but due to targeting the pre-approved population. I am sure if the law would allow, credit card companies would love to test sending the firm offer via email.

  9. The Financial Marketer says:

    I’d be interested to see how DM is stacking up against paid search traffic in Card aquisition. I’d still imagine that traffic quality wouldn’t be quite as good as pre-screened mailings, but much better than other channels.

  10. Even though direct mail from financial institutions (FIs) has increased in the last few years, that does not mean it is the most effective way to engage consumers. I agree with Mr. Marous that a combination of communication strategies is the best course of action. One method of acquiring new customers and gaining wallet share with existing customers, is through instant prescreen, not batch prescreen that is used in direct mail campaigns. Instant prescreen happens when the customer is already involved with the bank, unlike mass mailings. Customers usually check the mail when they are just getting home from work, thinking about what to make for dinner, their bills they just received and if they will have time to watch their favorite reality show; signing up for a new credit card is the last thing from their mind. With instant prescreen, FIs can also customize offers based on the information they already have about their customers. There are and I know I am much more likely to accept a credit card offer that is personalized to my needs, rather than a generic offer I receive in the mail.

  11. Thanks for commenting, Karen, and I totally agree. What I’m trying to do with this blog post is discredit those who dismiss direct mail as a viable channel — not to position DM as a superior channel.

  12. As I referenced in my first comment, there has never been a better time to integrate channels for improved personalization, timing the messages to arrive at the right time, leveraging the channels the prospect prefers. Combining direct mail (and email) with personalized landing pages and digital communication will enhance the results and value of all channels. As Ron emphasizes, direct mail is far from dead as a viable channel. The use of the channel needs to evolve, however, reflecting the way a prospect consumes marketing messages and the stage of the buying cycle.

    The key to all of this is channel attribution that provides a view into the sequence, cadence and frequency of communication. Without measurement, marketers could be led to make decisions based on marketing ‘pundits’ who have may have biased or unsubstantiated perspectives.

  13. Hi Ron,

    Just a note to say that we have not used DM for new customer acquisition for quite some time now.. And that we also just made the decision to stop using DM (both snail- and e-mail) for commercial messaging to our Customer base as per direct..

    Our best performing channel? Without giving it all away: Inbound Customer Services is very high on the list 😉


  14. I just now about direct mail. Thank for your expalanation so that my knowledge can add.

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