Where have all the local banks gone?

An underlying assumptions behind my forty-two month on-going effort to collect and catalog all bank mail sent to me includes those companies that find success mailing will continue to mail.  Another is that the largest volume mailers have the capabilities to measure what works, so seeing what they mail and when they mail it can offer some significant insights for those who can't afford the volume or the statisticians.

First the numbers:  Sent to either my home address or business address:  141 letters in the second quarter, compared to 138 last quarter, 276 YTD.  Last year, I received 496 solicitations from banks, so we are clearly on a trend to exceed last year's record.  Of the 23 institutions contacting me, the top 10 mailers were (2nd Qtr/YTD):

1. Chase (51/94)
2. Citibank (18/32)
3. AmEx (17/33)
4. Capital One (9/23)
5. Washington Mutual (8/22)
6. Bank of America (6/15)
7. Discover (6/15)
8. Advanta (4/8)
9. National City (3/3)
10. U.S. Bank (2/2)

Only three in the list above have a local office.  None of the community banks in the area mailed to me.  I'm concerned that many bank marketers have given up on direct mail under the mistaken belief that they can't over come the volume that the Nation's largest banks can generate.

The offers I received included Credit Card, 78%; personal loans, 10%; and equity loans 8%.  Only two letters sent me asked for my checking business.  Chase, Citibank, Capital One and Bank of America sent a variety of offers, not just credit cards.

So, my observations so far include:

A) Volume works.  The more contacts you can achieve, the higher your overall response rate.

The mailers are not eliminating me based upon non-response.   Chase has sent me likely well over 500 letters this decade, and I still don't have a Chase account of any sort.  But when they eventually open a local office, I have to consider whether a local branch in a national network really is a great idea.

C) The same letter, sent over and over again, does not lower response (or Chase, AmEx, BofA, etc., wouldn't use this practice).  The same letter sent to both adults in my household, is likewise apparently not a problem.   I have to think, however, that it would more effective if you are mailing to different addressees at the same address to mail each person over a period of time and not on the same day.

Sending the same letter, on the same day to both the adults and the minors living with me, must not be a problem either.  What is disturbing to me that my children, both under age 18, regularly receive solicitations.  The source appears to be frequent flyer club membership (which should have an accurate record of their age) and magazine subscriptions.  About 10% of the monthly solicitations sent to my home are address to the children—and I am not including in those totals (or even my database) college loan solicitations.

In all, my conclusion is that direct mail is a highly viable, productive media for financial institutions—despite apparently poor data hygiene, as evident by mailings to minors, and duplicate letters sent to the same addressee on the same day.

I think we can also take away from this observation that frequency trumps content.  Keep in mind, however, that the mailers discussed in this column treat direct mail as being fairly impersonal, probably because they have no existing business relationship with the targets.  So they try to impress me with contact frequency, unique envelopes and weighty, multi-piece content.  

The real advantage of direct mail is that it can, and should, be personal.  In the more than 1,500 bank solicitations sent to me over the past three and one half years, only two or three contacts attempted to make the content a personal letter.  Those few really stood out to me.  The content was short enough that I actually read the letter, and it contained information I could really use.  And there in lies the formula for how a community bank can overcome the volume that Chase and Bank America generate.

Your solicitations can be personal if you write to your customers (they have a relationship with your bank, after all) about something that interests them (targeting!), using short content with a first person voice and a friendly tone.  Send the letter from an employee that the customer can actually call.  And, use frequency (multiple mailings) to stay in touch and keep the relationship alive.

Finally, keep it simple.  That's what really stands out in the mail box today.