Mail is the preferred direct marketing medium to solicit orders and generate leads for financial services firms including banks, credit card and commodities/securities companies.
According to a just-released industry-specific Direct Marketing Association response rate survey, 71.5% use the medium.
E-mail, on the other hand, was used by only 31% of the marketers polled, while telemarketing is utilized by only 21.5%. Other media such as dimensional mail, inserts, freestanding inserts and print ads were measured in the DMA survey, but didn’t produce significant returns, either in response rates or the number of marketers using the media.
The survey, conducted late last year by IntelliSurvey, reported results from 255 marketers and 158 separate campaigns. The poll examined media, list source, response rate, revenue per contact, cost per contact, revenue per order and scored return on investment on an index.
Among firms using mail for direct ordering, firms surveyed reported higher response rates among prospect campaigns (3% to 5%) while the single highest house file effort was 2.5%. The DMA explained this might be due to such factors as prospects responding to seemingly more attractive credit card offers from competing banks than ones with which they already do business.
The same pattern seemed to hold with dimensional mail, as prospecting campaigns showed a better return on investment than house file drops. But the in-house data was skewed by one campaign that reported costs per order at $230.65, but did not provide corresponding revenue data.
E-mail appeared to be the best medium for financial services DMers to generate direct orders with an overall response rate of 1.28% among both house files and prospect lists and an overall return-on-investment index of 39.8.
In contrast, magazine ads and FSIs were shown to be the least profitable media, with respective 1.1 and 0.6 ROI index figures.
The survey also showed direct marketing to be an effective lead-generation tool for financial marketers. In this case, mail campaigns to house files outpulled prospecting efforts both in terms of response rates and profitability. House file response rates ranged between 0.25% and 13.7%, while prospect mailing response rates fell between 0.2% and 5.85%.
Because prospecting mailings tended to be over 1 million pieces, the costs per lead often was higher. And even though average order sizes were likely to run at more than $10,000 vs. about $5,000 for house file mailings, those drops tended to be more profitable, likely because they were more targeted, the survey noted.
In six e-mail campaigns, average order sizes ranged between $250 to $150,000. These efforts were all aimed at small groups of 2,000 to 5,000. Because the cost per contact was 17 cents, e-mail was shown to be a highly profitable means of lead generation.
Telemarketing also was shown to be profitable
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