Pushing the envelope.

• Author: Garvey, Mike
• Position: Fundamentals: direct mail

Woody Allen said, "Eighty percent of success is showing up." Unfortunately, this isn't the case for direct mail. If a piece of direct mail simply and randomly "shows up" in the mailbox, it is most likely classified as junk mail and retired, unopened, to the garbage can--at which point it is not going to do a lot of good for your bank.

Luckily, there is another formula that can help bank marketers when it comes to direct mail. This old rule of thumb states that 50 percent of the success of any direct mail program is attributable to the mailing list; 30 percent, to the offer; and 20 percent, to the creative. The equation is also a good guide both for planning and executing the direct mail piece.

Let's look at each of these direct-mail success factors in greater detail.

The list

What would happen if you decided to throw a Super Bowl party, and you only mailed invitations to people who didn't know you, didn't like football and lived more than 100 miles away? Chances are that you'd have a pretty low turnout. Why? Because you started with a bad mailing list. And you'll end up with similarly poor results if you use a bad list in mailing to your bank's prospective customers.

So what exactly constitutes a good list? In a nutshell, a good list is one that is targeted, relevant and clean.

Unfortunately, these qualities can be difficult to uncover, so the best approach is usually to test different lists and list types (see the table of list types on page 42) to find out which ones are the most promising. Banks have a head start in the form of their MCIF (marketing customer information file), which is an in-house list that not only contains customer names and addresses, but also a wealth of information in terms of current financial product usage.

The individuals and businesses in the MCIF form an audience that has already chosen to fulfill some of their financial needs at the bank, so the list is relevant--and the bank mails statements to them frequently, so the names and addresses are relatively clean, accurate and up-to-date. For cross selling efforts, the MCIF is an excellent starting point. And because customer lists typically generate at least two times the response of rented prospect lists, a majority of bank direct marketing falls into this category.

When considering lists for new customer acquisition, the goal is still to be targeted, relevant and clean. In addition, here are some more recommendations:

* Look for a recent NCOA (national change of address) service so that contact information will be up-to-date.

* Ask customers for referrals--these tend to be relevant prospects with accurate contact information.

* Coordinate with advertising--for example, rent the direct response list of subscribers to a newspaper or...