Selling Financial Services with Direct Mail

Direct mail is an effective marketing medium which offers the benefit of easily measured results. Technology has afforded the capability to generate highly-targeted mailing lists, identified by every imaginable demographic classification. This makes direct mail a valuable tool to financial institution marketers faced with diminishing marketing budgets.

Direct mail offers two other benefits:

1. You can sell your product completely without the limitations of a print, radio or television spot; and,
2. You can easily measure results.

Planning for Success

Good planning is the cornerstone of an effective direct mail campaign. To succeed in the face of direct mail competition, every phase of your campaign must be planned and executed with skill.

The first step in planning is to determine your objective. What do you want your mailing to accomplish? Do you want to generate sales, inquiries, lobby traffic, or awareness of your facility?

Next, determine the specific offer. The offer describes the product or service you are selling, the customer benefits of the product or service, and the price. Begin developing the offer by studying your objectives. Remember that the structure of the offer is more important than the creative package. For the best response, make the offer as attractive as possible

To help determine the offer, think about your target market. What motivates them? What kind of incentive can you offer to get them more likely to respond? The information from your existing customer base will provide your target market, or you can turn to an outside source to purchase a list of targeted prospects. The cleaner and more targeted your list, the better the response. Once you have determined your audience and know what makes them buy, combine these factors with your objective, and you should have the foundation for a solid offer.

You will need to establish a budget. Remember to include the cost of creating and producing the package, securing outside lists, letter shop services and postage -- and the cost of any follow-up activity.

In order to determine how large the mailing should be, you need to establish how many sales the campaign needs to generate to be successful and cost-effective. Be realistic; direct mail professionals claim an average one percent response rate.

Timing of the mailing can be an important factor in determining success. If the mailing is tied to an event or other marketing activity, the mail drop needs to coordinate with those dates.

Before the first piece of mail is dropped, you must determine your fulfillment procedure. Who is going to receive responses? How will the responses be handled? These answers to the questions are key to tracking results and determining success.

And finally, establish tracking and analysis procedures. Determine the criteria you will use to track the success of your campaign, and who will be responsible for the tracking.

With all these parameters in place, you are ready to begin implementing your direct mail campaign

The Creative Package

A direct mail package normally includes four elements: the outside envelope, the offer letter, the brochure, and the response piece. When designing the package, remember that the size and weight of the combined package will affect your postage costs.

The outside envelope creates the first impression your recipient receives. It should be the proper size to carry the other package elements securely without being crowded. Make sure that it is obvious to the recipient that the package is from your financial institution; most recipients will at least open an envelope from their own financial institution. While the envelope creates the first impression, the inside piece should sell the offer.

The letter is the primary sales vehicle, and should include a complete sales message and all details. The two most important parts of any direct mail letter are the first sentence and the postscript. In a mass-printed letter, the headline takes the place of the first sentence in reader priority and should immediately give the recipient a reason to read more. The first paragraph should be short, with no more than two or three concise sentences. Use a postscript as a call to action -- as a reminder to the recipient of an introductory offer or some other inducement.

The brochure is your opportunity to highlight the benefits to the recipient. Potential customers want to know how the product features translate into benefits for them. Copy should use the active tense.

The response piece is your order form. It should include a telephone number, an envelope or mail-back panel. Providing a postage-paid response device is always preferable. This is your one final shot to sell your offer.

Production

Who will handle the production of your mailing? If you decide to use a lettershop, choose with care. Ask for references, and check them. Check on the progress of your job while it is in the shop. You may want to "seed the list," so actual packages go to you and some of your employees. This gives you an actual package, so you can check for accuracy and other factors. It also lets you know when the package was mailed and when your audience will receive it.

If you choose to handle the mailing in-house, you will need to become familiar with postal regulations and be certain you follow them. Set your standards on collating and addressing. Hold yourself to the same or higher standards than you would a lettershop.

Fulfillment

In direct mail marketing, fulfillment is key to your success. Every response requires immediate attention. The most effective way to handle that function is to have one person coordinating the effort. Fulfillment for your package checking account means setting up or updating account records in your computer system and promptly mailing a member benefit kit to the responder.

The most important reminder: Be ready and to plan your fulfillment procedure in advance.

Tracking

In your packaged checking program, or any other direct mail effort, one person should handle tracking. Response analysis should include mail date and description, total quantity mailed, response rate, cost per mail piece and cost per response. These key statistics are compared for all the mailings you do each year to determine which mailings were most successful. Evaluate the success of each mailing, and build knowledge for future direct mail efforts.

Testing

Direct mail marketers advocate testing of lists, offers and creative packages. Tests are generally done only on larger mailings. As a rule of thumb, don't split-test a mailing of less than 2,000.

Remember to code the response device to aid in tracking. You can do this by adding a line to your return address. Other coding options include color-coding with paper or ink and pre-printed alpha/numeric codes.