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Welcome to the latest part of our blog series spotlighting Lob's 2024 State of Direct Mail Marketing report. This time, we reveal some stats about the financial services and banking industry — a sector you might not expect to use this marketing method.
Many financial services organizations use direct mail marketing. But what does our data say about how financial marketers personalized direct mail services? Which data types and campaign formats were the most popular, and which data sources did marketers use to target audiences?
Here are a few insights from our 2024 report, which you can download and read in full here.
After crunching the numbers, we found that 58% of finance and banking companies used address data for direct mail campaigns. The next most common data types were customer names, channel preferences, and purchase information, each at 53%.
So, why is address data so popular?
Alongside name data, this information is important for complying with know-your-customer laws. Finance and banking firms must adhere to strict rules when verifying consumers' identities. Failing to do so could jeopardize a company's reputation and even lead to government fines.
Our report revealed that more than half of companies used purchase data for direct mail. That data included information about how much customers spent on products and when they made those purchases. Many companies also used address verification services to ensure direct mail reached the right people.
We expect this usage to increase in next year's report as companies target consumers with more relevant products via triggered-based campaigns.
Recommended reading: How to Use Trigger-Based Direct Mail for Financial Services
What about direct mail campaigns? Our report uncovered that 56.8% of finance and banking companies used marketing mail, while 43.4% relied on operational mail. While the former communicates crucial information to customers, the latter promotes products and services.
We also discovered that 29% of companies used direct mail for customer retention, while 26% used it for customer acquisition. While these were the most popular reasons for investing in this marketing method, 23% of companies leveraged direct mail for customer referral campaigns.
For many customers, friends and family are trusted sources — and financial services organizations should take notice. Tapping into their current customers' influence can help companies grow their customer base.
Recommended reading: Best Direct Mail Campaigns: Financial Institutions and Insurance
It's no surprise that letters, brochures, and postcards were the most popular campaign formats for direct mail marketing in banking finance — similar to other industries.
However, in 2023, more companies experimented with formats like buckslips — a campaign mailer printed on text stock paper that measures about the size of a dollar bill. Snap packs have also gained momentum. These mailers are pressure-folded and have perforations on three sides. Along with their "snap" sound when opened, they often have an official appearance that can increase consumer engagement.
Recommended reading: The Buck Starts Here: Get Started with Buckslips in Direct Mail
Although not limited to banking and finance, one trend we noticed was personalized design elements targeting individual consumers. Instead of using the same direct mail piece for all customers, companies took consumer preferences, interests, and behaviors into account to create more relevant and nuanced campaigns.
Companies in this sector used personalization in different ways. According to our report:
In addition, 46% of companies customized coupons and offers, while 35% personalized images on direct mail pieces.
Of course, not all companies personalized direct mail pieces for audiences. About 14% used batched mail, which involves sending the same communications to a large audience. Conversely, 74% used a combination of personalized and batched mail.
So, where did banking and finance firms get all their data for direct mail campaigns? Customer data platforms (CDPs) were the most popular sources, allowing marketers to fine-tune direct mail pieces based on the latest information. CDPs collect customer data from various channels and compile it into one system.
After CDPs, customer relationship management (CRM) systems were the next most popular data source for direct mail campaigns, followed by marketing automation tools and third-party data. Many companies also used a direct mail platform to automate their campaigns.
In 2024, direct mail is proving to be a common way for banking and finance companies to acquire and retain customers, with 84% saying this marketing method delivered the best ROI, response rate, and conversion rate compared to other channels.
While data types, sources, formats, and personalization methods varied, it's clear that direct mail generated maximum impact and will continue to do so in 2024.
The insights above reveal a snapshot of the current state of direct marketing. Download our free report to learn more about direct mail in banking and finance and how this marketing method impacted other industries.
