Financial Direct Mail Marketing is Down
In years past financial marketing remained steady during tough economic times. As consumers need financial assistance, they’ve turned to their banks and credit unions for help. And this year we’ve seen many financial institutions fail because of our current U.S. economic climate. Some will blame the banks for their own undoing, with careless lending practices that led to our current credit crunch and mortgage crisis. Right or wrong, regardless of which side you fall, companies are still marketing, advertising and servicing their customers, but everyone is micro managing their budgets today, and overall spending is down.
DMIOnline, Direct Marketing International Magazine tracks these types of trends and they recently reported on the topic of Financial Marketing:
There were fewer direct mail marketing messages from financial services firms dropping onto American doormats last year, reports business intelligence provider Mintel Comperemedia. The number of mailed offers aiming to acquire new customers fell by more than 25%.
For the first 11 months of 2008, the Chicago-based direct marketing tracking firm estimates financial services direct mail volume at 10.3 billion. In 2007, Mintel Comperemedia estimated that volume at 13.9 billion, a 26% drop. Furthermore, when compared to the same period of 2006, the 2008 11-month total shows a 32% decline.
“Given the struggles faced by card issuers and lenders in 2008, it’s not surprising that they reduced new customer acquisition direct mail so drastically. In the face of increasing losses, they recognised the need to tailor their target audience better,” Clifford added. “But soon I expect we’ll see a levelling off in mail volume as banks find the position from which they can actively engage new customers while remaining profitable and secure.”
Its credit card offers and mortgages that are taking the heat right now, but the fact is that most of new customer aquisitons come from these types of offers. So while these direct mail offers continue to trend down, so goes the trend in the total direct mail business.
Together, credit card and mortgage and loan offers made up 86% of financial services acquisition direct mail tracked by Mintel Comperemedia from January-November 2008.
As the light shines somewhere, at the end of some unknown tunnel, those of us who service the finanical industry will be waiting with great new ideas to help our banks and credit unions, cautiously ease their way back into stride.