For financial services companies, cold direct mail has always been a major source for finding new customers, yet in my view, the sector has lost its way; high-quality, impactful campaigns have been replaced by mailshots that resemble a printout of T&Cs stuffed into an envelope.
But an addressed letter can offer so much more; in fact, it can be a positive pleasure for the customer.
And, contrary to what some people believe, under “legitimate interests” it’s still fine in most cases to use cold mailing lists for marketing even after GDPR’s implementation. That opens the door for direct mail to become a central part of comms campaigns again.
Most useful is the rise of “partially addressed mail” – in reality, a door-drop supported by some neat data analytics – which, with competitive pricing from Royal Mail, is a potential success story for attracting new customers.
There’s also a mass of evidence that direct mail – addressed, partially addressed or not at all – has a real impact within an integrated marketing strategy. We all knew this intuitively, of course, but now there are copious facts and figures behind the thinking.
Effectiveness measurement group Jicmail suggests 72% of recipients open addressed financial post, more than any other sector except utilities.
The average mailing is read four times. Meanwhile, more than 1 in 5 financial mailings remain ‘live’ – not binned or filed – in a house one month after arriving, second only to retail.
I’m pretty sure, however, that most people would tell you they get fewer financial mailings these days. But there’s a big opportunity to create memorable mail campaigns that boost customer response. Here are some reasons why:
* It’s good to go back to the drawing board: FS mail was once a hotbed of creative thinking. For instance, insurers targeted parents just before school holidays prompting them to take out travel insurance; others persuaded home movers to check their contents cover. Today you’re more likely to see long-copy statements about rate changes or switching information. So, it’s time for a return to livelier, topical creative campaigns that pique interest. Instant print innovation is making this possible.
* Don’t get stuck on boring envelopes: For too long, financial mailings have followed the easy route of heavily branded C4 envelopes containing dull leaflets. But good response will only come from intriguing content and design. The stats above prove consumers are genuinely interested in financial products, however complicated. People want to be engaged. If you’re going to the trouble of mailing them – and asking for £25 every month – it had better be interesting. Use the room mail gives you to tell a story delivered using an unexpected size or shape to surprise them.
* Digital loves physical: It’s a digital world but mail can still succeed. In fact, the two channels work really well together. Mail is the tangible manifestation of a brand. It gives people time to truly consider financial product information and make important decisions, while understanding the brand’s back story and personality. It can drive customers online where they can find more detail and offers if they wish. But beware: ensure your mail and digital presence are co-ordinated or the customer experience will be poor. I often advise brands not to use mail to drive people online if their website tells a different story.
* Take a personal approach: GDPR has offered organisations a chance to get smarter with their customer data, cleaning and optimise it to improve targeting and deliver personalised campaigns. Data-driven direct mail campaigns can engage someone like no other channel can. It’s a world away from the spray and pray approach programmatic advertising has been accused of in recent times.
* Remember it’s best to test: In the past, companies regularly assigned 10% of their marketing budget to testing creative. It’s another strategy that seems to have been forgotten. As more financial brands reinvest in using direct mail post-GDPR, differentiation will be key. Testing different formats, creative treatments, and even promotions and incentives, can significantly boost response rates. It’s not good enough to say you can’t afford to test; you can’t afford not to.
Those are some of the ways a direct mail campaign can boost customer response. It’d be great to see financial businesses rebuild their trust and confidence in the medium. After all, it is the third-largest advertising channel, racking up annual expenditure of £1.7bn [Advertising Association/Warc].
GDPR has changed the use of direct mail for financial products but hasn’t by any means ruled it out. Meanwhile, with the new ePrivacy Regulation on the horizon, online communications face a further squeeze. That’s just another in a long line of reasons why mail can come into its own once more.
All in all, financial companies should remember and recognise the difference direct mail can make as a central part of their marketing, rather than the post-script it seems to have become. Mail must be returned to the mix as a response mechanism feeding the sales funnel, bringing valuable volume in a competitive market.
John Watson is chairman and group chief executive of WPN Chameleon