As the US housing and credit crunch continues to worsen, the number of direct mail offers sent by financial services companies with the intent of acquiring new customers fell by more than one-quarter in 2008 vs. 2007 numbers, according to data from Mintel Comperemedia.
Comparing direct mail statistics from January-November 2008 with the same period in 2007, Mintel Comperemedia saw the total volume of banking, credit card, investment, and mortgage and loan new customer acquisition offers fall 26%, with mortgage and loan mail taking the deepest dive.
For the first 11 months of 2008, the direct marketing tracking firm estimates financial services direct mail volume at 10.3 billion. In 2007, the volume was estimated at at 13.9 billion. Moreover, when compared with the same period of 2006, the 2008 11-month total declined 32%.
Citibank and Chase had the largest reductions in direct mail for the January-November period, seeing respective 39% and 23% declines.
“Across the board, financial services companies were forced to change their direct mail strategy last year,” said Stephen Clifford, VP of Financial Services at Mintel Comperemedia. “Faced by the unprecedented challenges of a weak housing market, the credit crunch, a global recession and declining consumer confidence, financial institutions cut back on direct marketing.”
Mintel Comperemedia estimates that the number of credit card offers sent to new customers dropped 24% last year (comparing the first 11 months of 2008 with the same period of 2007). HSBC and Citibank had the most drastic drops in credit-card mail volume, decreasing 60% and 43% respectively.
Mortgage and loan mail fared even worse, as lenders reduced acquisition volume by more one third (37%), Mintel said.
“Given the struggles faced by card issuers and lenders in 2008, it’s not surprising that they reduced new customer acquisition direct mail so drastically. In the face of increasing losses, they recognized the need to tailor their target audience better,” said Clifford. “But soon I expect we’ll see a leveling off in mail volume as banks find the position from which they can actively engage new customers while remaining profitable and secure.”
Together, credit card and mortgage and loan offers made up 86% of financial services acquisition direct mail tracked by Mintel Comperemedia from January-November 2008. Investment and banking offers, which constituted the remainder, fell 5% over the same period, while the volume of direct mail for banking, the lone bright spot in 2008 financial direct marketing, increased 5% as banks tried to increase deposits.