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   ARTICLE   |   From Scotsman Guide Residential Edition   |   October 2013

The New Era of Direct Mail

Direct-mail marketing is back in vogue, but with a sophisticated twist

Direct mail always has been a valuable marketing tool for those involved in the mortgage industry. Even so, mortgage mailings have dropped substantially in recent years, but direct mail now is making a comeback. An improving economy, along with a recovering housing market, has encouraged mortgage lenders to return to direct mail and take advantage of its tangible, measurable and effective qualities.

In fact, according to market research company Mintel Comperemedia, the mortgage industry mailed nearly 1.8 billion pieces of mail this past year. More recently, there was a 64 percent year-over-year increase in mortgage-related direct-mail offers this past second quarter. The trend seems to be continuing, with a 27 percent increase from this past first quarter to this past second quarter. Some additional trends cited by Comperemedia include:

  • Most messaging was focused on building brand recognition and loyalty
  • Some of the main themes included urgency, offer flexibility and cost savings
  • Pricing charts or graphs were included in many packages

Mortgage brokers and bankers who either reduced their direct-mail efforts or got out of the game completely must take note. The rules have changed. The days of “spray and pray” with untargeted offers are over. To compete, mortgage companies must take advantage of today’s sophisticated database and digital-printing technology, which allow for more relevant and timely offers and integration with digital channels.

Here are some practical tips and insights that mortgage organizations should know to compete for consumers’ attention, and increase their open and response rates.

  • Select a non-traditional size. Avoid the typical No. 10 or 6x9 mailer. Using an alternative size will make your mortgage-focused direct-mail piece naturally stand out as the mail is gathered by the consumer.
  • Don’t oversell. Create intrigue with a simple headline on the envelope that is personal and specific. Provide the customer with relevant teaser copy like, “Information You Requested Regarding Your Mortgage.” You also may want to experiment with a white envelope with a return address, as this is more intriguing and official in appearance than a colorful envelope, which automatically signals promotional associations.
  • Give your mail piece a unique feel. Add a heavy stock insert with charts or graphs illustrating interest rates’ decline. Alternately, affix a plastic pre-approved card or magnet with your phone number and website as a call to action. This will create intrigue as people determine which mail pieces to review and which to discard.
  • Simplify the design. Clean design concepts that feature clear, well-defined areas for the headline and a call to action are the basics of effective direct mail. Chaotic or disruptive designs can be attention-grabbing, but they also can kill response rates.
  • Make the copy inviting. Defend against your readers’ tendency to scan. Incorporate bullets to highlight the key benefits of your mortgage offer; these are great for capturing customers’ attention. Remember, it’s all about readability.
  • Personalize to improve your return on investment. Personalization means a lot more than just sprinkling a recipient’s name throughout the offer. Technology now allows mortgage lenders to deliver offers that are tailored to the interests of each recipient. For example, direct-mail campaigns can highlight a recipient’s specific qualifying annual percentage rate or the anticipated mortgage amount for which that recipient qualifies.
  • Invest in color-printing technology. Color has proven to increase response rates. According to Xerox, which has conducted broad industry research to evaluate the effectiveness of color in business-document design, color documents are as much as 80 percent more likely to be read. In addition, the company found that color increases reader attention and recall by as much as 82 percent, boosts reader motivation to respond by 80 percent, and improves brand recognition by as much as 80 percent, as well. Xerox also reports that direct-mail recipients are 55 percent more likely to pick up a color piece of mail first.
  • Include a “pre-approved” check.  This check could be for the dollar amount of the potential loan, coupled with your phone number as a call to action.
  • Engage in cross-channel marketing. Direct the applicant to your call center or website. Set up a personalized Web address or specific landing page with content tailored to each recipient’s needs. Include technologies like quick response (QR) codes, which make the connection between paper-based content and digital content easier than ever.
  • Realize the benefits of Intelligent Mail barcodes (IMB). Full-service IMBs deliver countless advantages to direct marketers by providing crucial data to enhance mortgage-focused direct-mail campaigns. Mortgage companies can use IMBs to manage their in-home dates and prepare their teams for an increase in call volumes in response to their offers.

Mortgage bankers and brokers can find great opportunities in using direct mail to grow their businesses. Incorporating these trends and best practices in your next direct-mail campaign is a great place to start increasing the effectiveness of your mortgage offers from concept to conversion.  


 


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