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Direct Mail Marketing

Direct mail marketing traditionally has a very low response rate -- on the order of one to two percent. The response rate is so low that to be cost effective, mass (bulk) mailings in the thousands of pieces mailed multiple times are typically required.

The traditional brick and mortar mortgage business depends heavily on personal referrals from Realtors, builders, friends and family. Therefore, newsletters, updates and holiday cards are important means for a loan officer to stay in touch and maintain presence of mind with potential referral sources.

The challenge was how to cost effectively establish and maintain a direct mail marketing campaign designed to maintain presence of mind?

When investigating bulk rate mail, major problems became quickly apparent with bulk mail:

  1. Delivery was slow. Up to two weeks required for bulk mail delivery versus next day for local first class mail
  2. Lowest rates required pre-sorted drop off at the Orlando International Airport mail terminal 55 miles away
  3. Presorted bulk mail dropped off at the local post office was only a few cents per piece less than unsorted first class picked up by postal carrier at our office
  4. Minimum bulk mail quantities exceeded the size of our individual referral source mailing lists. The only way to qualify for bulk mail rates was for all loan officers to coordinate and pool mailings together.
  5. The prices charged by third party bulk mail companies were no better than the fully loaded cost of doing the work in-house.

That bulk mail of any type would take up to two weeks for delivery ruled it out for time sensitive mailings.

Post Cards versus Sealed Envelopes

Post cards generally have a better response rate than sealed envelopes because with a post card, it's hard for the recipient to not see what you are trying to communicate before tossing the card into the trash whereas with a sealed envelope, the entire envelope and letter may be thrown into the trash unopened.

All other things being equal, color tends to get a higher response that black and white although, creative use of a black and white message on color paper, or spot color can also outperform full color materials in terms of response and cost effectiveness.

Because cards were less expensive, monthly card mailings and a quarterly newsletter proved to be a good mix.

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