OPINION How to harness the power of direct mail for financial services marketing

Ellie Engley is Account Director, Financial Services, at marketing data and insight company REaD Group. In this article she discusses how financial service providers can execute a successful direct mail campaign to engage customers.

Over the past year and more, the ways in which financial services firms communicate with their customers and prospects has changed dramatically. As face-to-face opportunities to engage customers declined, so attention turned to the remaining channels: email marketing experienced a huge rise in send volumes – and for a time, engagement rates went up to.

But oversaturation and a crowded marketplace were an inevitable consequence: as customers got tired of email, one surprisingly resilient – and successful – channel was direct mail: one of our clients saw an 86% uplift in sales from a direct mail catalogue conducted during lockdown, compared to the same campaign a year previously.  

In this article, we’ll explore how to create your own successful direct mail campaign to reach and support your customers.

Why choose direct mail?

Direct mail has many advantages: it is the point at which communication becomes physical. Not only does it deliver a great return on investment (ROI) but research has shown that it also creates strong emotional connections and brand associations. It is also a trusted channel: Royal Mail MarketReach’s research carried out during the pandemic showed that mail became even more valuable during this period. Not only that, but direct mail offered a way for financial services firms to support their customers: 78% of customers believed brands should help them in their daily lives, while 75% said brands should inform people of what they’re doing[i].

People are physical creatures who rely on human contact and stimulation, and giving, receiving and handling tangible objects are still important aspects of the human experience. Receiving a well targeted and well branded piece of mail can reinforce the recipient’s experience and feelings, making them feel valued and thought about.

Direct mail is also efficient. Because it is delivered by Royal Mail through your letterbox, there is zero wastage in comparison to magazine inserts which may fall out anywhere between the store and your home. And direct mail is personalised: addressed and delivered directly to the home of a named recipient. Open rates are much higher for direct mail than online channels. Statistics from Royal Mail’s The Private Life of Mail study show that the opening and interaction rates for different kinds of mail are at least 43%, and often higher, depending on the type of mail.

Choosing your target audience

The first step when planning a direct mail campaign is to decide who to send the mailing to. Assess what you know about your current customers. If you want to find more people who look like your current customers, or find out which data you should use, then partner with a data marketing specialist to help you run a profile based on your existing customer base.

Alternatively, you may be looking to develop stronger, more profitable relationships with existing customers. Again, a data marketing specialist will be able to help you assess your current data quality and contactability issues.

You can also enhance customer data with new variables to ensure personalisation and segmentation. Enhancing customer data will help you to understand the customer life-stage and to build personalised engagement and marketing strategies around this.

Where mail can add value

There are a number of ways in which to use mail, depending on who you are approaching. If you want to help customers with debt management, then send targeted mailings with relevant messaging and tailored advice. For local areas or audiences, you can use door drops to advise them of branches reopening and services offered. Support vulnerable audiences with direct mail to help them navigate different ways of banking. And thanking customers with a personalised letter will make them feel valued and rewarded for their loyalty during what has been an incredibly tricky time for everyone.

Personalisation

When mailing known individuals – and you’ll have their gender, age, location, income, household composition, lifestyle interests etc. in your database – you have an unrivalled opportunity to make your message particularly relevant and useful to them.  Thanks to today’s digital print capabilities, the level of targeting available within direct mail and the technology behind it means that you can create a mail piece tailored with dynamically-selected imagery, information and formats that will better resonate with them at a personal level, increasing the likelihood of response and conversion.

Consider also the creative integration of your activity. Brand imagery should be consistent with that which the recipient may see elsewhere, especially if your messaging promotes web visits. You need to ensure that the creative is coordinated, as this serves to reinforce brand recognition and recall, as well as delivering a consistent message across all your activities.

Partners

If you have undertaken no or very few direct mail campaigns, it is a good idea to partner with trusted experts in this field; organisations in whose knowledge, experience and expertise in your sector you can have complete confidence. This should be everyone from the supplier of GDPR-compliant prospect data to those who will clean the data and create a ready-to-use mailing file, through to your chosen printer and mailing house.

Measuring ROI

At the beginning of your campaign planning, it’s vital that you consider how you will track the performance of your campaign so that you calculate its ROI, e.g. for every £1 spent on, what return is it delivering to your organisation?

With the correct tracking mechanisms in place, direct mail is one of the most trackable media channels. Every response can be directly attributed to a specific direct mail campaign.

Consider which metrics you should be measuring in order to determine the success of the campaign and ensure that you have the ability to measure these internally. Alternatively, you can engage a partner organisation which specialises in campaign evaluation. A good data marketing partner can assist with campaign reporting requirements and advise on how to set up your activity at the outset in order to deliver proven, conclusive response analysis.

In terms of the likely performance of the campaign, there are many factors which will influence the response rates that your activity may generate.

Benchmarks will vary dependent on sector, and a data marketing partner will be able to provide forecasted response rates and ROI predictions for your campaign activity. This allows a level of budgetary forecasting that can be reported ahead of the campaign going live to provide peace of mind and reassurance to the business.

[i] How mail can help banks support customers during covid-19 & beyond, Royal Mail MarketReach study.