| By Jim Bruene on March 5, 2007 11:13 AM | Comments (4) |
Advertising-monitoring firm, Mintel Comperemedia reported last week that nearly 9 out of 10 credit card solicitations in 2006 directed recipients to the Web, up sharply from 56% in 2003 (see note 1, 2). Several big mailers, namely American Express, still seem reluctant to use website response as an option, at least in the mailers we see at our house.
American Express tests must show a drop in response by offering too many choices. But if you don't have the budget of American Express, which can afford to drop a mail piece in every credit-worthy household every two or three weeks, you should add website options to your direct mail creative. That way, you can at least capture a lead at your website, even if they don't ultimately accept your credit offer.
Total mailing volume for 2006 was 9.2 billion pieces (see note 1), or about 3 per week per credit-worthy household. Two of those were from the five largest mailers listed below which accounted for more than 60% of the volume, according to Comperemedia. JPMorgan Chase accounted for 18% on its own.
In another data slice from Comperemedia, cited by Capital One in a Feb. 2006 investor presentation (PDF here), response rates have fallen from 1.4% in 1995 to 0.3% in 2004 (see note 3).
Here's a breakdown of the billion-piece club, and their percent change compared to 2005:
1. Chase >>> 1.7 billion (down 4%)
2. Capital One >>> 1.2 billion (up 13%)
3. American Express >>> 1 billion
4. Citibank >>> 980 million (down 2%)
5. Bank of America/MBNA >>> 920 million (down 17%)
Other top-10 mailers: HSBC (up 25%); Discover (up 29%); Barclays Bank (190 million, up 70%)
Note:
1. Comperemedia tracks mailing volume for more than 150 large financial institutions. So the figures here do not include mailings from thousands of smaller banks and credit unions. In total, those probably account for less than 5% of the total from the top-150.
2. Comperemedia press release is here. Interview of Comperemedia director Jenny Roock by MediaPost is here.
3. Credit card response rate slide from Capital One's investor presentation (PDF) at the Debt & Equity Conference, Feb. 2006; data from Comperemedia.
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I'm not following your logic, Jim, when you say:
"you should add website options to your direct mail creative. That way, you can at least capture a lead at your website, even if they don't ultimately accept your credit offer."
What are these people doing on the site, if not applying?
You are right that issuers should add online options to their DM materials -- but I think that's less about lead gen, and more about convenience.
Half of all credit card applications come from consumers under 40. Consumers who are more apt to apply online (because of the convenience) than older consumers. And the smart issuers know that if they can pre-fill info w/ an online app, they've made it even easier for a prospect.
Ron, agree with your point. I didn't mean to imply that website options in DM were all about lead generation. I just meant that leads were a potential bonus of driving customers online.
Given that only 3 out of 1000 recipients are accepting card offers, you might be able to pick up another 1 or 2 per thousand as future leads, if you have some type of lead capturing process online.
btw...I believe that the .03% stat is misleading. I think its the response rate for conversion thru DM -- and that it excludes conversions that occur online.
I don't think all issuers are able to track back their OL apps to a DM piece.
So.. the impact (success) of DM is greater than appears.
(and yes, I have a vested interest in this)
For any readers whom are members of Vancity Credit Union, if you would like to share any of these or other thoughts about Vancity Credit Union (given that we are in the midst of the annual Board elections) please visit http://videosonvancity.ning.com and consider voting for me http://electbriansmith.blogpsot.com
Cheers,
Brian