Email vs. Direct Mail

The other day, I was talking with somebody that asked the question of whether email would overtake direct mail as an acquisition engine for retail banks. In order to help answer this question, I looked at a number of sources, including:

http://smallbiztrends.com/2015/02/successful-email-marketing.html

The largest difference between email and direct mail is the cost and response rate. One study I read quotes the average response rate of email at less than 0.1% while direct mail is typically quoted at about 2%. That said, the average cost for direct is significantly higher because of postage and paper costs. Therefore, banks need to make a trade-off of these costs and the management of email campaigns in order to make decisions between these two channels.

There were a number of findings that I felt were very relevant, including that 81% of online shoppers are more likely to make both online and in-store purchases due to emails based on previous shopping preferences and behaviors. This is a critical element because it does suggest that you need to have "permission" from the customer in order to present them with the offers. Across all forms of direct response marketing, there is a large jump in response rates when the customers have given you permission (implicitly or explicitly) to market to them.

As banks building email strategies, this would suggest that creating relevant content that could drive potential customers to sign up for alerts and provide you with permission to email them, could be a really effective approach to email campaigns.

One bank that I believe has done this well is Chase with their home mortgage app (https://www.chase.com/mortgage/mynewhome-app). They provide a service (free) that walks potential home buyers through the whole home buying process. As part of the process, they are getting all of your relevant information and painting themselves as partners in the process.