Direct mail: how can the community bank compete? After studying three year's worth of direct mail sent by banks, a marketer concludes that large banks are pursuing an aggressive 'saturation' strategy.

• Author: Rodrigues, Mark P.
• Position: Marketing: News

A database marketer collected over a three-year period all bank promotions and credit card solicitations he received at home and at the office. He did this because he was curious about the patterns of direct mail sent to typical bank customers.

The result was nearly 1,000 pieces of mail. The collection gave insight into the direct mail strategies and tactics being used today by financial services marketers.

"The quantity of mail I received suggests that a saturation strategy is generally used by the high-volume mailers," says Mark P. Rodrigues, who is president of The Biltmore Group, Lincolnshire, Ill.

In all, he received 980 pieces of mail from 63 different financial institutions. Of these 63 institutions, 16 sent him at least 10 separate mailings. On the other end of the scale, 28 banks, mortgage companies or other lenders made only a single direct-mail effort for his business. Among this group of one-shot mailers were six local banks.

Familiar national names led the list of the most frequent mailers: JPMorgan Chase (200 items, including affinity credit card offers); Capital One (115); American Express (103); and Bank of America (64).

Only one community bank attempted to contact him more than once: Lake Forest Bank & Trust, owned by the $8.7 billion Wintrust Financial Corp., a regional holding company operating in Illinois and Wisconsin. Rodrigues received 20 mailings from the bank, primarily full-color postcards. "As a result of the mailings, I gained the impression that Lake Forest offered better rates and checking services that met my needs. I know much less about other local institutions," he says.

The use of multiple mailings suggest that at least some marketers believe that direct mail no longer means single, isolated or occasional mail drops. "It's reasonable to assume that at least the large nationals, such as Chase and Citibank, carefully measure response and conclude that frequency contributes positively to return on investment," he notes.

Rodrigues also observed that the volume of bank mail increased annually--up 31 percent in 2006 compared with the previous year, for example. The peak volume months were January, August and October. About 60 percent of the mail he received during the last half of the month, with 35 percent arriving on the 24th or later.

Credit card offers aside, he received three times more loan offers than deposit services. Local institutions almost always asked for checking...