Direct mail basics: Consistency and measurementErin Beitelscheesdirect mail, marketing
As a marketer, I read every piece of junk mail I receive.
However, the majority of consumers sort their mail over the trash
and your message is never viewed. While direct mail has a lower
response rate than other forms of marketing, its cost makes it a
great option for many mortgage brokers and loan officers. Direct
mail responses can vary by industry and mailing type. The typical
response rate for direct mail is one to three percent. In the
financial services industry, however, this can be as high as eight
to 10 percent.
What to market?
The first step for creating a direct mail piece is to determine in
one sentence what you want to accomplish. Will you be selling a
specific loan program? Targeting people who need to cash out of
ARMs? Instead of a product, you may decide to use the schedule of a
local, college or professional sports team. This is one way to
ensure that your mailing will be saved and your name and company is
top-of-mind for the client. As the market changes and mortgage
professionals are leaving the industry, it is important to
establish your solid reputation and let clients know you are still
The next step is determining whom your mailing will target. Look
at your previously closed loans. Would this program apply to those
clients' needs? Segment your past clients and anticipate their
future needs with your loan products.
Is there an organization that you belong to that you have access
to mailing addresses of all members? You may also decide to
purchase a list of people who would fit the demographic you are
trying to reach. The target may be people in a certain ZIP code,
credit score or income bracket.
Letter or postcard?
For a limited budget, the easiest options are a postcard or letter.
If you decide to go with a letter, keep it concise. Use only
several sentences and bullet points. Make sure your phone number is
displayed in a place that is easy to reference.
I once received a letter from a local pizzeria with four
paragraphs explaining why they offered the best pizza in the area.
I was puzzled by a letter of that length for something like pizza.
At the bottom of the letter was an offer for free salad and garlic
bread with every order. I held onto the letter and when I did order
from the pizzeria, the person answering the phone had never heard
of the letter. This example illustrates your need to be ready for
the leads you are generating. Follow up immediately with your newly
generated leads. Train anyone answering the phone to be ready to
respond to what you are offering.
A well designed postcard can stand out among the stack of mail.
An oversized postcard typically will receive better results than
the standard-sized postcard. When designing your postcard, keep it
simple and have a solid message. Be consistent and always use your
logo. While direct mail pieces will vary in design, they should
always have a similar look or feel. Focus the message around the
client's wants and needs, not your own. You also don't want to sell
your entire loan program on a postcard; if you give all of the
details, there is no reason to call you. If there is a marketing
person in your office, run your idea by him. Many online and local
printers offer design services for free or minimal fees.
Your biggest expense for direct mail will be postage. Mailing first
class will ensure that the mailer is received faster and less
damaged. Bulk options are also available for less time-sensitive
messages. Depending on your list size, you can also have your
printer meter and print the recipient's address directly on the
postcard. This will save you time and money if you do not have
someone who can handle your mailing for you. Consult the U.S.
Postal Service's Web site or your printer to find options that
might best fit your needs.
The most important step in any marketing activity is measurement.
Understanding what works and what does not will eventually help you
refine your mailings and get the most return on your marketing
dollar. Ask all new leads how they heard about you. In many
instances, the client will not mention the postcard or letter where
they first saw your name or number. The key to direct mail is that
it can yield immediate responses by phone, but should be tracked
over three to four campaigns to understand the return. Remember,
marketing does not work instantly.
To calculate your return on marketing, take the total dollars
you spent on the mailer and subtract that from your total yield
spread and/or fees received from that client. Divide the net profit
by the cost of the mailer and then multiply the result by 100 to
receive the percent return. In other words, a $350 mailer that
brings you only one customer with $2,500 paid to you in yield
spread has provided a 614 percent return [(2,500-350)/350 = 6.14 x
100 = 614 percent].
Direct mail is a simple and cost effective addition to your
marketing mix. With a consistent message and design, brokers and
loan officers can stay top-of-mind with prospective leads and past
Erin Beitelschees is marketing manager at Columbus,
Financial Group. She can be reached at (614) 221-6770 or e-mail