Why direct mail delivers for financial services marketing
Direct Mail is undoubtedly delivering in the digital age. With email fatigue and digital noise, younger generations, in particular, are embracing the tangible nature of mail. While the popularity of post may have fluctuated since the arrival of email, direct mail remains an essential and successful part of the marketing mix.
In fact, for financial services firms, the channel is often a first consideration. This is sensible and driven by data; usage and open rates. In its recent response rate report, the DMA found that direct mail achieves a 4.4% response rate compared to email’s 0.12%.
In this blog, we look at why mail works for financial services marketing, and why it should be part of your multichannel strategy!
1. Digital and mail costs are levelling
Some marketers believe that the cost of running a direct mail campaign is too expensive compared to digital. In fact, when you assess the costs in relation to response rates and ROI, this isn’t the case.
In addition, digital prices are on the rise. In 2018, UK brands were predicted to spend £1.6bn on digital (eMarketer). The relatively low cost of entry for pay-per-click advertising (PPC) for example, has led to leading to increased demand, pushing up prices. Combine this with further regulation in the shape of the forthcoming Privacy and Electronic Communications Regulations (PECR), and mail offers some clear advantages.
2. Mail conveys trust and authority
The tactile nature of mail has long enabled brands to convey trust and authority, especially important for financial brands. For example, a high-end piece of direct mail printed on premium paper with embossing conveys a sense of professionalism and integrity. The recipient doesn’t feel the same physical connection with digital pieces.
70% of respondents said that mail makes them feel more valued
70% said that mail gives those who receive it a better impression of the organisationRoyal Mail: The Value of Mail in Uncertain Times
Receiving mail also makes recipients feel valued, and gives a better impression of the organisation than if they’d just received emails alone. Direct mail carries a sense of longevity and purpose, to help combat any feelings of customer scepticism. Together, these tangible qualities enable direct mail to cut through, creating a sense of trust.
3. Millennials respond to mail
Financial services are now becoming more of a priority to the millennial generation (those born between 1980 and 1999). Perhaps they are graduating from university, progressing in their career, getting married or buying houses.
While you may assume that the original ‘digital first’ generation won’t respond to mail, this is untrue. Digitally savvy millennials are more likely to read and engage with direct mail pieces. Studies have found that 63% of millennials who reported responding to direct mail in the last three months also made a purchase (USPS).
It’s precisely the connected nature of this demographic that makes direct mail a success; it offers a welcome break from the digital environment.
4. Mail enables clarity and longevity
Financial services by nature often offer complex services and propositions. Mail enables brands to simplify their services with space and finely crafted copy; with a creative to ensure clarity.
60% of respondents said the physical nature of mail made it easier for them to recall messaging at a later date (Royal Mail)
27% of direct mail is still ‘live’ within the household after 28 days (DMA)
You can offer explanation that combines with digital, directing people online if required. Mail also brings longevity, ideal for products that need in-depth review or as pieces to refer back to. This makes direct mail is a good option for financial services; it’s able to provide the detailed information needed to make a decision, at the recipient’s discretion.
5. A multichannel strategy lifts engagement and response
We see it time and again; the best results come from integration and running multichannel campaigns. Combining mail and digital significantly boosts results. In fact, a Royal Mail/JICMAIL report found that using mail and digital together can lift response up to 62%!
Using direct mail and digital together in a planned, strategic campaign builds on the strengths of each, adding value.
There are many ways for financial service providers to harness this approach. At the top of the funnel, you may wish to drive traffic to your website, to download assets such as whitepapers and capture leads. As the sales cycle continues, you can combine with a customised landing page, for users to access product or policy documents.
You could also use QR codes or personalised URLs to direct responses from mail to online. Alternatively, you could set up programmatic or transactional mail, where users’ online activity triggers a direct mail piece, for example, an online form submission triggers a hard copy welcome pack.
6. Mail delivers on experience and ROI
Roles have reversed. Where once British households received countless mailings per week, now they receive a handful. But, statistics show that direct mail is growing in popularity, giving marketers a clear chance to stand out. According to Royal Mail research, 86% of people have contacted a business as a direct result of receiving mail.
Direct mail continues to provide effective, measurable results for the financial services industry. In addition, combining mail and digital enables marketers at top financial institutions to deliver a consistent and meaningful customer experience; and achieve their desired ROI.