Which is best? Email vs direct mail for financial services marketing

eCM vs DM for financial services: woman with picture of envelope

Kevin Williams

Posted on December 19, 2014

You might assume that because we live in an increasingly digital world that direct mail (DM) is going the way of the dinosaurs. You might assume that, but you’d be wrong.

The response rate for DM to an existing customer averages 3.4 percent, compared to only 0.12 percent for eDM (electronic direct mail), according to the Direct Marketing Association.

So how does the battlefield of eDM vs DM for financial services marketing really look today?

In the blue corner: eDM

Why it works

Email is fast and easily customisable; you can control when an email lands in someone’s inbox; and you can measure tangible results such as open rates and click-through rates. It’s also more immediate for the person receiving the email: they have an action they can complete there and then.

Weak points

The problem is, email is a very crowded market. Estimates vary, but it’s thought that 144.8 billion emails are sent every day, and 89 billion of those are business emails. That’s an awful lot of noise. On top of that, everyone knows that email is the easier, faster and often cheaper route, meaning with all the personalisation in the world, an email is never going to make a treasured client or hot prospect feel truly special.

Email also fails if you have a story to tell. If you have a single, clear message then great, but emails are limited in terms of creativity and length. In other words, long stories don’t get read.

Training tips

Like any prize fighter, you can’t just expect to get in the ring and win. You have to learn good techniques and strengthen the right muscles:

  • Keep emails short and to the point. Too much content and people won’t read it;
  • Ensure the format is easily scannable and actionable so the recipient understands the main message and take the required action, even if they do not read the full email;
  • Test, test and test again. Check how your email looks in different browsers and form factors and optimise the next email based on the performance of the last.

Showcase show down

We ran a campaign for Deutsche Bank, which was targeting the top law firms in the world for Escrow services. This was a global campaign, with a mailing list of around 15,000 names, although only around 13 companies were represented by 80 percent of those names. Email was the obvious winner for this campaign for several reasons:

  • A global DM campaign on that scale would have been extremely expensive
  • The global aspect would have also meant a time-lag on when different people within the same firm received the message. With email it could be timed that wherever the contact was in the world, they would get it at, for example, 9am local time.
  • The result was a good, cost-effective campaign that offered good analytics

And in the red corner: DM

Why it works

Direct mail is great if you a have bigger story to tell. You can use more emotive copy and copywriters can really contribute to the selling process in this format. There is a much better opportunity to support the brand experience thanks to the variety and creativity that DM offers.

Within the financial services sector in particular, DM is useful for complex or educational communications, such as sending product information to Financial Advisors.

Weak points

DM is often more expensive than eDM. Although some studies have shown that the ROI isn’t so different because of the higher response rate to physical mail. One study shows that the cost-per-lead or order for acquisition campaigns for DM was $51.40, while for email it was $55.24.

Training tips

  • Get creative. Don’t just send out an A4 letter on white paper – there’s nothing exciting about that and response rates are usually only around one to two percent.
  • Think about the action you are hoping your content will provoke. With direct mail there is a delay; people can’t click a button and visit a website from a postcard. So be sure any action you do require is clearly explained and easy to do, and use DM for those times where immediate action isn’t the purpose of the campaign.

Showcase show down

When the Royal Bank of Canada had a garden at the Chelsea Flower Show they wanted to encourage a select few of their top clients to attend. They wanted to make these 100 people feel special, so we designed and mailed a bespoke invitation with a three dimensional package.

The heavyweight champion: The other DM – Dimensional Mail

57 percent of people already think that direct mail is a channel that shows you value your customers, according to Central Mailing Services. Just think how special they would feel if they received a bespoke, 3D package?

‘Dimensional mail outperforms flat mail by huge numbers according to Research at Baylor University. It has 20 times the penetrating power of flat direct mail, boosts response rates by as much as 75 percent and scores 80 percent or better in generating positive opinions among recipients’ says William Levin.

eDM vs DM for financial services marketing: the verdict

As you’ve probably twigged by now, it’s not really about a battle between the two types of marketing, but working out which is best suited to your particular campaign or purpose. Each comes with its own pros and cons and together they can sometimes be more effective than when used in isolation.

For example, BLP Insurance, chose an integrated campaign to create awareness rather than immediate action, since buildings insurance tends to be a project-driven or one-off annual purchase. We used a DM piece, then a follow up with two emails, which were also integrated with telemarketing and banner advertising in target media. This way, BLP was kept front of mind.

Where do you stand on eDM vs DM? Do you know which is best for your next campaign?