Direct Mail Boosts Fintech Traction

Mike Gunderson
Direct Mail Boosts Fintech Traction

Key Takeaways:

  • Targeting pre-approved offers
  • Direct mail drives online visits
  • Cost of acquisition, ROI prove favorable
  • Direct mail success tied to experienced partners

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Direct Mail Complements Digital, Influences Consumers And Drives Higher ROI

Used correctly, direct mail and digital communications make the perfect pair for Fintech companies. They complement each other, and both have unique strengths. That’s in part why direct mail is enjoying a resurgence in general and a surge in Fintech, with increasing numbers of companies looking to integrate direct mail into their marketing platforms.

At first, this can seem counterintuitive. After all Fintech is all about technology, and therefore should use technology tools to promote itself, right? Nope.

There’s a true story of an IT consultant who travels to clients’ homes. His receipts consist of handwritten carbon copies using carbon paper. When asked why, he responded that he speaks to his audience—largely seniors—in the way that’s most familiar, friendly and effective.

Judging by Fintech consumer response to direct mail, it appears that this methodology also is proving familiar, friendly and effective. The simple fact is that when direct mail lands in the mailbox along with a check, etc., there’s a much higher chance of being viewed and acted upon. Print is anything but dead.

And that’s not just the view of older audiences. Direct mail is being embraced as a robust marketing tool by all audience ages, including millennials. Marketing strategists and direct mail recipients alike see the value, regardless of age.

2018 Forbes.com article frames the discussion: “With more companies evaluating their ad spend and marketing budgets, many believed they should gravitate to advertising tactics like virtual reality, digital ads and boosted social posts. However, companies have discovered these ad tactics often don’t yield the same results as traditional marketing strategies.”

The article continues, “Now, many brands are turning to their old marketing friend, direct mail, to leverage various print mediums. The $44.2 billion direct mail industry continues to thrive, even in a digital age, and it is doing so because it is a tried-and-true marketing tactic that gets results for advertisers.”

This reinforces the author’s 2016 Forbes article that notes: “Those who know me know I am the world’s biggest proponent of integrated marketing and this is a classic reason why. Do not put all your marketing eggs in one marketing basket.”

Fintech Companies Jump On Direct Mail Bandwagon

CNBC.com report points out: “Lenders are pounding the pavement looking for borrowers who want to consolidate bills, take a vacation or fix up their homes. Homes are being inundated with mail solicitations from companies like Marcus, Elevate and Lending Club, hoping to supply personal loans to consumers.”

A year-end 2018 Fico.com blogpost underscores the support for direct mail in Fintech. The article notes: “In a recent conversation with an online lender focused on the personal loan space, I heard something that blew me away.

They were telling me about their aggressive growth plans for 2019 and I asked them what acquisition channel [they used] to drive that growth and they said…prescreen offers sent out in the mail! This was a fintech that has been loudly telling bankers and industry observers that they are re-inventing financial services and yet their primary acquisition channel, the key to their aggressive growth plans, is the Post Office.”

Our direct mail experiences mirror these observations. In the last three years especially, Fintech has seen huge growth in use of the direct mail channel. Response and conversion rates are increasing, as companies look to direct mail to combat digital bombardment and noise on all fronts. They’re able to target prospects more effectively; in turn, prospects are stepping up to the plate more often. Retirement services, loans and lines of credit are three major areas of Fintech direct mail focus.

Wall Street Journal article reinforces online Fintech’s use of “old-school marketing.” The article points out: “Average monthly volume of loan offers through the mail has soared…The most unlikely beneficiary of the online-lending boom may be the U.S. Postal Service. LendingClub Corp., Prosper Marketplace Inc. and other financial technology, or ‘fintech,’ companies are spending hundreds of millions of dollars trying to pry customers away from traditional banks. The main marketing channel for these online upstarts: old-fashioned snail mail.”

Targeting Pre-Approved Offers

In Fintech, being able to target prospects precisely is a major direct mail benefit. Companies can focus on exactly the customers they want within tight credit parameters—sending relevant pre-approved offers to the most qualified, well-informed and motivated candidates through a channel that will get noticed. This tight targeting leads to steady and consistent high-quality response—usually .5% to 1.5% in the finance arena.

There also is the ability to be geographically strategic—targeting specific states and ruling out others where lending licenses might prevent doing business or make it especially difficult to operate.

Continuous improvement merits being a mantra, not just a marketing line. We can help!

If you’re interested in adding direct mail to your marketing mix, then drop us a line. We’re standing by to answer any questions, and, most importantly, to help you get your mail opened.

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Mike Gunderson

Mike is the founder and president of Gundir, the award-winning direct marketing agency. Since 2003, Gundir has helped businesses drive new leads and close more sales through traditional offline channels, especially direct mail.

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