Debts & Credit | Direct Mail for Financial Marketing

From Alexander Hamilton’s foundation of the Bank of New York in 1784 to his later involvement in establishing the first Bank of the United States in 1791, financial institutions are just as essential for America’s foundation as its other fundamental ideals of life, liberty, and the pursuit of happiness.

Since its establishment, the U.S. is no stranger to the recessions and downturns that plague both the country and the worldwide economy.

In times of uncertainty, many cautious individuals may reduce their spending while budgeting for the future. In these cases, they will look towards their financial institutions for assurance that their money – and future – are secured.

One self-reported study conducted by the Federal Reserve Board in 2022  found that 94% of adults had a bank account – while also noting the disparity between income, age, race, ethnicity, and disability status.

Regarding retirement, the Federal study found that most savings declined in 2022, with a notable decline in non-retirees on track with retirement in comparison to 2021 (31% and 40% respectively). 

Credits and Debits

Throughout the years of economic booms, recessions, and inflationary periods, financial institutions will always have a place in the modern American lifestyle.

As of 2022, there are currently 572 million open credit card accounts within the U.S. One could argue that in terms of high-demand consumer products, credit cards reign supreme.

In addition to credit cards, many Americans are burdened with enormous piles of debt. There are currently over 43.2 million federal student loan debt borrowers with an average federal loan balance of $37,088, as many Americans are feeling the pinch of monthly payments and interest rates.

Student loans are not the only common debts that citizens may owe to the government or consumer business.

In addition to high mortgage rates, the average auto loan balance in the U.S. in 2023 was $23,792, and over 10.6 million people have medical debt exceeding  $2,000.

Debt and financial management is on the minds of Americans every day.

Direct Mail for Financial Institutions

With a large spending budget and an even larger potential market, financial institutions and lenders have ample opportunity to reach their ideal prospects with every campaign.

With direct mail’s ability to inspire trust, decipher potential customers by credit “worthiness” and its multiple marketing touch points, this marketing medium is an excellent channel to connect with households across the country.

1.) Trust

Direct mail by its nature is an extremely trustworthy medium in comparison to its digital counterparts.

Not only does it provide the name, address, and logo of the advertised company, but unlike digital marketing, recipients are free to open and read the advertisement without fear of spam or malware.

In addition, customers want assurance that their money and personal information are secure. When it comes to advertising, direct mail is great at both requesting information and delivering new checks and credit cards right to a person’s address.

There is seemingly no risk of their information being disclosed in a data breach, as the tampering of direct mail is met with hefty recourse by the law.

Direct mail may even encourage a higher subconscious value to the product or service advertised through direct mail. According to one RARC Report (RARC-WP-15-012), participants simulated an emotional reaction and had a stronger desire and value placed on products and services when using direct mail. 

Related: Advertising Your Business in Times of Uncertainty

2.) Credit “Worthiness”

For most credit and loan issuers, customers with better credit scores are in higher demand, considering their historical finances indicate a healthy record of paying off debts on time.

Logically, one would conclude that these are the ideal prospects to target, as they would be most likely to pass any necessary credit check when they respond to a campaign.

Direct mail is one of the few marketing mediums that can factor in the many individual characteristics that would indicate a healthy credit score.

Digital marketers, for example, would not have a way to know if their audience possesses a good credit rating until undergoing a credit check. Imagine spending hundreds of thousands of dollars to advertise to millions of people, only to lose out on sales due to a prospect’s poor credit.

With direct mail, your ideal prospects are identified and targeted prior to a campaign launch. This in turn improves ROI, since any response is from a pre-approved list of people that are most likely to pass a credit check.

3.) Multiple Marketing Touch Points

When it comes to finances, decisions are rarely made by the individual recipient. For larger purchases, couples often discuss many options before reaching a final conclusion. Financial purchases are no exception.

Unlike email or display ads, direct mail offers individuals the opportunity to physically pass around and discuss its contents. On average, direct mail is passed around the home 1.2 times and read 4.2 times by each recipient, meaning each household can discuss each document at length until reaching a decision.

Furthermore, since direct mail’s lifespan is much longer than the typical advertisement, couples have time to revisit each campaign and discern if the product or service is a necessary purchase for their lifestyle.

Related: Direct Mail: Multiple Marketing Touchpoints