Customer Acquisition in Financial Services: Insights and Case Studies

Direct mail usage in the financial services industry is not just surviving but thriving like a wolf on Wall Street. According to direct mail research commissioned by SeQuel Response and conducted by ISG Research, 88% of financial services marketers report that direct mail performance has either improved or remained steady over the past year. The data indicates a clear trend: direct mail continues to be the backbone of customer acquisition in financial services.

Customer Acquisition in Financial Services: The Power of Direct Mail

The financial services industry is a crowded market, with its high-profit potential attracting players from established institutions to startups. This intense competition for the same customer base, combined with the similarity in financial products and services offered, makes it challenging for brands to differentiate themselves.

Given the high lifetime value of customers in this sector, financial institutions are willing to invest heavily in dynamic marketing strategies to acquire and retain them. For example, a bank might expect customers to stay with them for years or even decades, making each prospect highly valuable. Yet constant exposure to digital ads, emails, and social media promotions can lead to desensitization.  

Here’s the thing: growth isn’t about being the loudest in the room—it’s about targeting with such accuracy that your message lands in the hands of those who will truly appreciate and respond to what you have to offer. Enter direct mail, which has earned its stripes as an indispensable tool for brands such as:

• Credit card issuers
• Banks and credit unions
• Mortgage lenders
• Wealth management firms
• Personal loan providers
• Student loan companies
• Financial advisors and planners
• Payment processing companies
• Pension and retirement fund providers
• Fintech companies
• Debt consolidation services
• Business loan providers

… and more

With razor-sharp precision, direct mail skyrockets response rates while lowering customer acquisition costs. We have seen this strategy not only meet but exceed financial brands’ goals time and time again. In fact, 39% of financial services marketers report an average direct mail cost per acquisition of less than $99, and 16% have an average cost per acquisition of less than $74.

Financial Services Marketing Objectives Breakdown

Successfully connecting with prospects is crucial for any business focused on growth and profitability. This is especially important for customer acquisition in financial services, as nearly half (45.8%) of direct mail budgets are devoted to customer acquisition strategies. Unlike sectors that depend on repeat purchases to foster customer loyalty, financial services typically establish long-term relationships once a prospect becomes a customer. As a result, there is less need for frequent remarketing or win-back campaigns.

However, the economic instability of 2023 has made consumers more cautious. To make the most of this situation, emphasize the stability and security of your financial products. Use dynamic content that can be adjusted efficiently on market conditions or individual responses to remain relevant and responsive to shifting consumer attitudes.

For example…

Having exhausted digital growth opportunities, this leading debt-settlement company turned to direct mail for scalability. SeQuel designed a FaQtor Test matrix involving four creative concepts, twelve list sources, and optimal mailing frequency testing, resulting in direct mail now contributing over 15% to new business acquisition. The campaign achieved remarkable results, generating 22,000 new customers in a year and a campaign ROI of 39x, with direct mail driving $1 billion in new debt annually.

The Program Execution Debate

Did you know that nearly half of financial service firms handle their direct mail programs in-house? According to surveyed financial services marketers, the decision not to utilize outside agencies is predominantly influenced by budget constraints. Other notable factors include timeline constraints, integration issues, dissatisfaction with past experiences, and risk-based preferences.

Managing your direct mail program in-house offers direct control and lower short-term costs. Yet, agencies’ expertise and technological prowess can significantly improve campaign performance. While costs are understandably a primary concern, it’s worth noting that 83% of marketers would consider switching agencies for better cost efficiency, enhanced integration, flexible payment terms, improved performance, and strategic guidance—factors that full-service direct marketing agencies excel at.

For example…

This personal loan brand struggled to source direct mail data and print solutions with its in-house efforts. Recognizing the need for improved data targeting and control of their direct mail program, they recognized the need for a full-service partner. SeQuel implemented a new data-driven strategy that targeted specific segments, resulting in a 35% higher response rate than usual efforts and a conversion rate of 11.4% for prospects with $30,000-$49,999 in debt.

Quality Audience Targeting Data Matters

In the financial services industry, direct mail’s appeal is clear, with marketers highlighting its top three strengths: the ability to target high-quality audiences (16%), the flexibility in mail volume and budget (14%), and the ease of tracking and attribution and performance (14%).

What sets the channel apart is its foundation in robust offline data available for use during predictive modeling. High-quality direct mail data contains valuable information on purchasing habits, demographics, and behavioral insights from reliable offline sources. Such precision allows you to identify and engage with the most receptive prospects, increasing the likelihood of conversions and improving the customer experience.

Our research also shows that financial services marketers obtain their mailing lists from various sources: 30.7% from data brokers or vendors, 34.5% from first-party or CRM, and 34.8% from agencies. Using a combination of data sources enriches direct mail marketing campaigns, providing a more comprehensive view. By leveraging this diverse data pool, you can build direct mail strategies that resonate deeper with your audience, ultimately leading to enhanced customer acquisition.

For example…

One regional bank faced challenges with geo-focused targeting in its digital marketing efforts, losing potential customers to national aggregators. SeQuel implemented a detailed search and display strategy using radius-based targeting and audience segments to reach prospects in the bank’s market area. This approach tripled digital conversion rates for the bank, resulting in increased impression share, a 75% year-over-year conversion rate increase, and over a 200% rise in ad conversion actions.

All Signs Point To Integration

Every surveyed financial services marketer agrees: integration positively impacts campaign performance. Out of all direct response channels direct mail can integrate with, most financial services marketers (83%) have or plan to integrate with email, followed by web video (50%). Interestingly, financial brands are far less likely to integrate with CTV/OTT than other industries (6% vs. 26%), suggesting a more conservative approach to this newer medium.

Aligning landing pages with direct mail designs also drives conversions, with 94% of industry professionals seeing a boost in results from this strategy. This is where innovative methodologies like SeQuel Surround make a real difference.

Our approach to integrated direct mail and digital empowers you to activate rich customer data sets in digital environments. Your direct mail audience is then reachable across digital channels such as display, native, web video, connected radio, and CTV|OTT. As your campaign progresses and new data sources are tested, you can adjust the marketing mix to target more effectively, scale your efforts, and optimize performance.

For your next customer acquisition in financial services campaign, try pairing direct mail with…

• Social media
• Paid search/programmatic display
• Out-of-home (OOH)

For example…

Due to limited data variables, a leading financial services brand faced challenges reaching relevant prospects using its existing digital campaigns. SeQuel employed prospect mailing models online to combine direct mail with pre-roll video advertisements. This integrated strategy resulted in a 23% increase in sales rates, a 12% reduction in cost per acquisition (CPA), and a 36% growth in revenue, proving the effectiveness of aligning video ads and direct mail campaigns.

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In a world gone digital, the finance sector is proving that sometimes, the best way to a customer’s heart (and wallet) is through the mailbox. SeQuel Response helps financial services companies acquire new customers and get the most out of their marketing budget. Contact a SeQuel Marketing Strategist to get started.