Using Direct Mail in Financial Services

In our State of Direct Mail: Consumer Insights report, we cover direct mail engagement as part of an omnichannel campaign. Some of the topline findings of the report are a great proof point for marketers looking to sell in direct mail campaigns: 72% of consumers read direct mail the same day they receive it.

Alongside a topline look at direct mail's value in omnichannel marketing, we zoomed in on direct mail performance among specific demographics and industries. Financial services has always heavily used direct mail to market products and services to consumers. However, in the digital age of cross-channel campaigns, what are the most effective formats and ways financial services companies can use direct mail to connect with current and prospective customers?

Finding 1: Letters and envelopes are the top format

We surveyed 1,088 consumers on their direct mail preferences from financial services providers. Of those, 48% reported the direct mail format they were most likely to read were letters and envelopes.

Letters and envelopes are most likely to be opened because they usually contain the messages and services consumers respond to. For example, 66% of respondents said that a promotion for a new product or service is the most likely message to prompt them to read a piece of direct mail.

This should be no surprise, given that consumer-facing financial service promotions usually require a fair amount of detail to explain. That's not to mention that consumers often have expectations about presentation and formality regarding financial services products.

Finding 2: Brochures and postcards remain popular

All the above doesn't mean that letters and envelopes are the only direct mail format you should use. For example, in our survey, 31% of consumers stated they were most likely to read a brochure from a financial services company. This makes sense for the industry, as brochures often contain long-form information regarding promotions for products and services.

Surprisingly, however, another 31% of consumers stated that they were most likely to read direct mail from financial services businesses in the form of postcards. In addition, 39% of those aged 35-54 stated that they would prefer to receive brand communications via postcards, matching the number of 35-54s who preferred letters and envelopes. Given how busy 35-54 year-olds often are, there's a good chance this is due to this age group being time-starved.

The takeaway here is that when it comes to the format of direct mail for financial services, brands should make sure to diversify their offerings to help them penetrate every demographic.

Finding 3: Direct mail wins with older consumers

We also found that consumers aged 55+ are significantly more likely to engage with direct mail from all brand types than younger consumers. Among those aged 55+, 62% prefer brands they don't know to engage with them via direct mail over any other medium—compared to just 23% of those aged 18-34.

Even when it comes to brands those aged 55+ are aware of but have yet to have a relationship with, 56% of the age group preferred direct mail. Along with forming a vital part of the marketing approach to reaching the general public for financial services products, this shows that direct mail is crucial in connecting with specific demographics in depth and detail.

Direct mail as key to omnichannel

A major takeaway from our survey was that 31% of consumers are more likely to engage with a brand when they receive multiple types of communication.

In the age of digital-centric marketing, many financial services companies feel pressured to shift interest and budgets further into social and email marketing. But direct mail's personal and tangible qualities mean that it's an ideal medium to communicate and penetrate the consumer base for financial products and services.

With 64% of consumers taking action on direct mail due to an offer or promotion, it's clear that the financial services industry can benefit from the medium. Along with leveraging modern platforms, direct mail remains a pivotal part of the marketing jigsaw.

If you want to level up your direct mail game, better integrate direct mail with your marketing efforts, and maximize your level of customer connection and compliance, find out about Lob's own product suite for financial services. You can get a demo now or contact us to find out how to level up your direct mail campaigns.