In the age of digital-first banking, direct mail has made a surprising comeback. Direct mail + banks is a winning combination for marketers and the results only get stronger with the advent of online marketing.
Direct mail is a powerful marketing strategy that financial organisations use to promote their services and products. This marketing strategy involves sending a physical piece of collateral – a brochure, letter, postcard, package, etc. – directly to your audience’s home address.
An effective direct mail campaign results in large sales pipelines, higher conversion rates, and a deep personal connection with the audience, but they are also expensive and tricky to execute.
It works so well in the financial industry that even online organisations or institutions (such as online lenders and financial tech companies) use it to their benefit. Whether you’re marketing investments, credit, loans, insurance, or general banking – any kind of financial promotion, there are several reasons direct mail marketing for insurance agents should be a big part of the marketing mix.
But everything comes with a bit of drawback too. So let’s read on to identify why it is beneficial and what its cons include.
Benefits of Direct Mail
- It helps connect with millennials
Don’t fall into the trap of focusing all your efforts on digital and mobile when targeting millennials. Millennials enjoy direct mail more than any generation before. They are also adept at ignoring digital ads.
But, you can’t just send a generic mail and call it millennial outreach. You need to be a bit tricky to exercise those cross-channel marketing chops.
- For local targeting, send a postcard that includes a personalised URL to track the landing page with valuable content marketing.
- Use variable data dynamic content insertion to personalise financial advisor postcard marketing just as emails.
- Create postcard automation wherever your customer lifecycle uses a personal touch. You can also use artificial intelligence to automate postcards for sign-up bonuses, special personalised offers, customer appreciation incentives, and various behavioural triggers.
- The Sales Pipelines Magic: Maximised Conversions with More Leads
In the study by the Direct Marketing Association, it was found that the direct mail response rate is 4.4%. This response rate is lower for financial organisations but more compared to 0.12% of emails. The increased insurance direct mail response rates lead to higher conversion rates, resulting in more qualified leads landing in your sales pipeline.
Recent data shows that direct mail marketing efforts have response rates of 1.16% in the lending industry. This number is not much surprising but it is powerful for lenders. For instance, if you target and mail up to 120,000 people i.e., 1.16% means you have 1,392 respondents who are interested in your offerings. And if 75% of those respondents applied out of which 50% converted. Now, how much revenue would 522 funded loans mean to your organisation?
- Direct Mail Matches Consumer Preferences
Most Americans prefer direct mail to email marketing. Direct mail helps cut through the endless email clutter consumers are bombarded with constantly. The average person receives 121 emails daily. With so much competition and noise online, landing in someone’s spam folder can be a tall order.
Almost 4 in 10 people actually enjoy checking their physical mailbox. There is a deeper emotional connection to checking the mail – it has an element of surprise and can grab consumers’ attention easier than a marketing email.
Drawbacks of Using Direct Mail
- Can be expensive
Undoubtedly, direct mail brings higher response rates. But despite the higher response rates, direct mail for banks can be expensive. Email marketing still offers better ROI compared to direct mail. Sending emails is cheap and you can send them to thousands of people at once. In fact, the average ROI for email is $28.50 while it’s $7 for direct mail.
- You don’t get immediate results always
For financial advisor direct mail marketing, a degree of patience is required. In some cases, direct mail has a longer turnaround time for results than online marketing. Sending mail directly to your target audience involves a lot of trial and error. Your process could take time and testing to get desired results. To reap the full benefits of direct mail marketing, your organisation should be prepared to make a long-term commitment to marketing efforts.
- Logistics of Direct Mail is tricky to get right
The logistics of pulling off a successful direct mail campaign is tricky, but it’s an essential component of the direct mail process. With bank direct mail marketing, you have different compliance concerns than you would have with online marketing. The increased amount of rules and regulations regarding whom to send mailers to and what message to use often makes direct mail logistics more complicated than it will be with digital marketing – but it’s not an insurmountable hurdle.
Tips to Get the Most Out of Direct Mail
One advantage of direct mail marketing is that it’s solid, meaning your target customer can hang on to it. And if they keep your direct mail piece that means they are likely to seen your message again and again. Your message will be reinforced over and over – a constant reminder to take action – whether making a purchase or signing up.
And to create direct mail that can be kept, looked at, and bring action – you need to be creative and strategic:
- Be creative with design and artwork – use strong imagery that inspires action.
- Keep it personalised – use variable text and images.
- Print message with unusual formats, designed to be kept and displayed.
- Be clear and simple with your copy – write messages straightforward and compelling.
- Include a simple and clear CTA – that’s too good to resist.
- Be creative with distribution options – several ways of direct mail packing form the quirky to the useful.
The benefits and drawbacks of direct mail will vary from the strategies you implement and the audience you target. The ideas we have outlined are essential for any direct mail campaign. It’s how you will implement the strategies that makes the difference.
The best way to start on successful direct mail is by having a chat with a creative and experienced direct mail company. Be clear about what you want to want and use their expertise to make those desired goals a reality.