Yes, it might seem odd in the age of SEO and retargeting to talk about mail – the kind you can touch. Yet direct mail at the ripe old age of 170 remains a constant player in acquiring and maintaining relationships with consumers. This should not be forgotten, even as banks and credit unions increasingly use digital marketing channels.
Indeed, by applying the four recommendations outlined below, direct mail relevance will continue to improve for financial marketers. Used together, they will improve your ability to reach key audiences, connect with them through one-on-one personalized experiences, and reduce print production times.
1. Focus on key audiences
Millennials, Gen Z, and women are key target audiences for any financial marketer’s strategic plan. Millennials currently make up 30% of the population, according to Brookings, and Millennials make up 32%, Bloomberg calculates. Together, these larger cohorts make up almost two-thirds of the population, are digital natives, and are digitally connected. Logically, that should make them prime targets for digital advertising, right? In fact, they’re the most likely to avoid digital advertising.
More than half of Millennials actively block digital ads, according to MediaPost, and Gen Z is even After likely to use some form of ad blocking. This evidence of digital saturation and the growing trend of ad blocking offers a clear opportunity for direct home marketing.
Women make up the largest percentage of the American population, and they exercise their purchasing power by guiding household and personal wealth decisions. Surprisingly, many financial marketers have yet to develop programs aimed at women. As a result, financial institutions lose nearly $ 800 billion in assets investing women, according to Kantar Research.
Their level of influence and decision-making power make women an attractive audience. Direct mail should be part of any program designed to build trust and relationships with, and sell products and services to, the very large population of women.
2. Use effective targeting techniques
The major consumer groups just described can be reached more effectively using the proven selection methodologies of predictive modeling and recency-frequency-money analysis (RFM). While other screening methodologies can be used, together they can provide a solid foundation and a higher likelihood of attracting and retaining customers.
While modeling isn’t a new concept for direct mail, building and deploying predictive models remains one of the most effective ways to focus direct mail campaigns on the specific consumers most likely to respond. Reducing the population to the best responders pays off and offers the ability to methodically adjust messaging and personalization for strategic testing.
RFM segmentation can be used alone or in conjunction with other modeling techniques. The foundation of RFM is that it predicts future behavior based on past behavior. While each industry might define RFM components a little differently, the overall goal is to score customers in a database using three values:
- Recency (date of last purchase)
- Frequency (total lifetime orders)
- Monetary value (the sum of all orders).
A score is then assigned to each customer using these three values. Analyzing scores and ratios within rating rankings helps determine optimal target audiences and identify pockets of opportunity.
3. Overlay geographic location data
Location targeting has traditionally been defined as the delivery of marketing content to a person based on their geographic location. In direct mail, location targeting is often used synonymously with geographic area marketing, but there are some important distinctions.
With the introduction of location technologies, geo-radius marketing is only a part of a complete geo-targeted approach. The rise of our mobile society and the proliferation of wearable devices have made it easier to capture more in-depth, privacy-compliant location data. The location data overlay gives direct marketers a new resource to better understand consumer preferences and behaviors.
Key point: The trick is not to use the data too much in personalization. Instead, preferences and behaviors can be used for more subtle personalization connections, such as images, colors, tones, and offerings.
It’s important to note that a focused testing and learning plan to create the optimal combination of predictive models, RFMs, and geo-targeting can be time consuming. However, investing time and resources can pay big dividends. More testing means more information to help focus marketing efforts on key target audiences.
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4. Personalize using digital printing
Putting the knowledge of the public and individuals into practice can easily be facilitated through digital printing technology and the use of variable content. The next few years will see further growth in personalized communications that go beyond letter greetings and towards one-on-one communication with prospects and individual customers.
Variable direct mail content, personalized for the reader, helps build relevance and an immediate connection with lifestyle and behavior signals. This means adding images, colors, visuals and copies that appeal directly to the reader. Depending on a financial institution’s campaign goals, additional features can also be used to further increase interaction and response. These include personalized offers, gender specific preferences, pre-filled forms, and personalized URLs (PURLs).
When used correctly and without getting too personal, these techniques can dramatically improve a mail reader’s experience, increase response, and have a positive impact on sales.
A traditional challenge for direct marketers has been production times for compiling and printing data. This challenge is being met head-on with new and evolving digital printing technologies, offering the dual benefit of shorter production times and the ability to use variable content.
The strategic use of digital printing increases the ability of financial marketers to reach audiences faster with the right message and the right offer. This could be a valuable opportunity to frequently switch products like CDs and home equity rates.