Direct Mail Marketing Is Far From Dead

Direct marketing, contrary to popular belief, actually performs very well across all age demographics, particularly due to evolving targeting techniques. About 75% of households at least scan direct mail advertisements, per the U.S. Postal Service. Direct mail has the higher response rate compared to digital methods.

Financial services companies are the highest users of direct mail, with 71% of banks and credit unions using this method, according to the DMA Response Rate Report 2016 by Deborah Haskel, precisely because it is effective. Think about how many Capital One and other big brand card company direct mailers you receive in a week. They know it works. That also means, however, that financial institutions must be on message for their brand, marketing must speak appropriately to different borrowers, and they must be creative to distinguish themselves from the pack. Nearly half of companies (46%) plan to maintain their direct mailing levels, while another 35% plan to increase. Modern data analytics and targeting make direct mail offers even more worthwhile to financial institutions and their recipients.

Direct mail response rates have increased over the last few years due to better targeting, according to Haskel’s report, and it achieves the highest response rates by far versus other media. Creative direct marketing ideas abound, and considering consumers’ volume of email as compared to USPS, they’re more likely to stand out in their minds.

There’s a psychological reason behind these results, too. When people handle physical mail, they do so for a longer time than a fleeting digital ad, so they are more likely to remember it, according to a study by the USPS. Additionally, the USPS study used eye tracking, biometrics and functional MRI technology, and found physical ads triggered activity in the ventral striatum area of the brain, which is responsible for value and desirability and can signal a greater intent to purchase.

Direct mail actually stimulated an emotional response in participants of the USPS study, so visuals and messaging have to be on point for your target audiences.

Millennials will not give your company the time of day if your product and message are not aligned to demonstrate your authenticity. Being trustworthy and honest is particularly important to millennials, so determine the story your product tells and stick with it, Nadia Goodman wrote in Entrepreneur. Millennials are most concerned about either convenience or pricing in a world that allows them to simply download copious items in minutes, such as movies or music, for free. Send them online for a scavenger hunt with a direct marketing piece where the prize is music downloads or entry to win concert tickets.

Gen X is the product of the first Gulf War, and has watched technology evolve and job security be thrown out the window, according to Robert Klara in Adweek, while divorce rates peaked in their teenage years. Gen X is comparatively small but in their prime earning years, and work hard to keep it that way. Gen X has issues with authority, so messaging can’t be demanding. But once respect is earned, they appreciate reliability, safety and security. Coupons can work well with Gen X, Mary Lister blogged for WordStream, as they focus on saving for college, home ownership, business startups and, maybe, retirement. Fully 86% of this generation brings in the mail every day and 68% have used coupons they received in the mail.

Boomers like to speak with someone before buying a product or service, but they’re willing to pay for it. They’re susceptible to brand loyalty and upselling, so keep them once you get them, Lister continued. Discounts won’t work, but upsell them on the value of a product or service. They enjoy splurging on high-end, quality items and brands in their retirement, especially cars and, contrary to popular opinion, new technology, 4Imprint reported. Boomers consider themselves in better physical shape than their predecessors, so use active images of people about 10 years younger than them hiking or running after grandchildren.

Get creative. Mailers don’t have to be flat and boring anymore. Grab attention for a credit card balance transfer promotion by mailing out tagboard wallets with cards inside that include incentives to transfer their balances to your card both online and in-branch. Promote a vacation loan special by mailing out LifeSavers candies to represent the real lifesavers on a cruise ship.

U.S. credit unions are growing in members and assets, to the tune of more than $1.4 trillion as of May 2018, according to CUNA. The number of credit unions is shrinking, leaving the more financially sound institutions to thrive. Credit unions’ aggregate delinquency ratio is holding at 0.6%. Pair that with a 10.6% capital ratio, and the credit union community is more well-positioned than ever to expand its reach into consumers’ lives and help improve them.

Credit unions fight daily battles with fintech competitors in addition to the traditional financial institutions down the street. Fight with a message you know is authentic: Credit unions are here to help. And provide that message in an integrated marketing campaign that gives them something to hold on to.

Shana Richardson is CEO of Ser Technology. She can be reached at 800-486-5288.