How the credit industry improved direct mail response rates
The U.S. economy is showing significant progress, as it comes out of a period of financial downturn. As a result, credit companies are taking advantage of the opportunity to increase their direct mail campaigns in an effort to target consumers who have weathered the recent economic instability and are looking to increase their purchasing power. Businesses can look to credit services providers for an example of how direct mail can be effective in courting consumers. In addition to address verification, companies planning to implement a large scale mailing campaign should include incentives for recipients to respond to the pieces.
The Pittsburgh Post-Gazette reported businesses offering consumers credit cards have rejuvenated their direct mail projects by emphasizing the benefits incorporated into signing up for a new card. For example, some issuers offer mail recipients checks worth upwards of $100, bonus miles toward airline travel and increasingly low interest rates.
Enticing customers with targeted mailings
Companies are hoping their efforts will entice more customers, making them think twice about the cards they already own. The number of solicitations have increased compared to last year. During the second quarter of 2013, credit companies spent $1.1 billion on direct mail campaigns - a 22 percent increase from June 2012. What's more, the volume of enticements sent out has grown as well.
The Post-Gazette stated previous sign-up bonuses ranged from 10,000 to 20,000 points that can be used toward any number of products or service, but companies are now offering rewards up to 50,000 points. Businesses use credit scores to measure what sort of incentive program best fits each particular recipient, hoping a more targeted method will augment results.
Improving response rates
Service 1st Federal Credit Union, located in Danville, Pa., has demonstrated significant success regarding its direct mail projects. According to an August press release, the company achieved a 4 percent response rate, far outpacing the credit industry standard of 0.2 percent. The credit union highlighted a concerted effort to concentrate on credit cards as the primary focus, as well as to utilize software that helped customize which contacts would receive a particular incentive offer.
The success of credit service providers emphasizes the usefulness of technology, such as address validation software, in developing accurate direct mail campaigns. Understanding which demographic will benefit most from a specific mailer and having accurate addresses can significantly improve response rates, as demonstrated by recent projects implemented by credit card issuers.