When most financial advisors put together a marketing plan, they often ignore direct mail in favour of other communication methods such as digital marketing or social media. Because many professionals are implementing digital marketing, direct mail is becoming more of a gold mine than before.
Everyone’s inbox is full of mail. There are people who have created separate email accounts just to weed out all the unwanted clutter.
That’s why direct mail came to the rescue. There’s likely less stuff in there. According to the United States Post Office and the Direct Marketing Association, 70% of Americans said they found direct mail more personal than the internet. They trust and like it more.
But, how can you use this powerful tool to your advantage? Here are some tips you can follow to create an effective direct mail campaign:
- Experiment with multiple formats – Postcards vs. Envelopes
The idea of using postcards is a good one; it’s cheaper than the letter and it’s more likely to get read as there’s no envelope to cover it. Since the number one goal of bank direct mail marketing is to get the recipient’s attention, postcards seem like a good idea.
But postcards are also cheap. They just give the impression that you are mailing them to every person in the zip code. Letters in a physical envelope include different headlines, detailed copy, and more literature.
In fact, there’s a DMA study that says – oversized envelopes lead to the best response rate at 0.5%, then postcards at 4.255, while letter-sized envelopes have a response rate of 3.5%.
The finance industry is a different beast. Postcards tend to bring wild success or lead to epic waste and failure. In some cases, the letter-sized envelope is a noble workhorse that proves to be safe and steady. Try out yourself, what strategy works well for you, and count the responses coming.
- Test everything
Along with testing postcards vs envelopes, test various offers too – literature, formats, and audience.
The financial service direct mail marketing is all about trial and error. But when testing, try out one thing at a time. For instance, just change the headline, or the font, or the size of your postcard or brochure. If you do it all once, you won’t be able to track what contributed to better results. Just make sure that you use a sample large enough that it can improve your statistical confidence.
Try a minimum of 1,000 for split tests which means each A/B test you run will cost from a few hundred to a few thousand dollars. Keep your imagination realistic so you won’t get discouraged when you lose some amount of money or just break even at first. Understand that it might take you a few thousand dollars to find a formula but once it does, it will prove to be a money machine.
- Never confuse response for results
This can be a killer for dreams and budgets. You might send a direct mail for banks, get a response from them and you think the campaign worked? Definitely not.
Know the difference between responses and results. For instance, in lead generation, you can generate a lot of leads with a free offer (response) but how many of those are converted into consumers (results)?
Results are the thing that can make up the money of your financial services offerings and the only thing that you should measure against your marketing expenses to make sure that your machine is working.
- Compare Direct Mail Campaigns against other advertising methods
A business-oriented person enjoys the process of getting the largest return possible for money invested and you can do the same for your direct mail financial services. Compare different campaigns and variables, along with directly comparing direct mail campaigns over other advertising approaches.
If you are running an advertising campaign at the same time as your direct mail campaign, compare them on a cost per piece basis. That’s the common denominator of all marketing – how many greenbacks it required to get a response, results, etc.
Having an approximate cost analysis in hand will give you the confidence to pump more money into the direct mail campaign and less into any other advertising campaign, enabling your dollars to stretch a little more. Doing this maths early on, and later testing the variables against each other can save you hundreds or dollars over the course of your career.
- Think Boring
It’s not the colours that drive printing costs up, but pretty mail rejects involvement sometimes. When it comes to financial advisor direct mail marketing, I think it’s boring.
Boring direct mail gives no act of cleverness. The sole objective is to generate calls and nothing more than that Many direct marketers will succeed in spite of design but not because of it.
Sometimes, boring mail campaigns bring results because there’s no design to get in the way. Remember, the mail is not for branding, it is for the response. Do what works best to get the response.
Additional tip: Use a stamp. People can identify if something is mass-mailed. If you put a live stamp on the envelope, it looks real. It appears as if it came from a real person, meaning it’s more likely to get opened.
The financial organisations often don’t account for mass mailing vs live stamps, contributing to the letter’s lower response rates.
