Online lenders are spending hundreds of millions of dollars to lure customers away from traditional banks — and the upstarts are using mailboxes as their main marketing channel.
“Mail is not dead by any stretch of the imagination,” R. Mark Graf, chief financial officer of Discover Financial Services, told an industry conference in September.
The average monthly volume of personal-loan offers sent through the mail has more than doubled during the past two years, The Wall Street Journal reported this month. Approximately 156 million offers were mailed in the year ending July 31, up from 73 million during the same period in 2013.
Online lenders say they use the mail because it’s effective. The overall response rate for direct-mail is 3.7 percent compared with 0.1 percent for email and social-media marketing, according to industry data cited by the Journal.
Direct mailings also are becoming more high-tech.
For example, Lending Club Corp. uses credit score data to target potential customers. When a customer enters a code from the mailpiece, Lending Club knows at least some details about that person’s creditworthiness.
“It takes two seconds to see if we can help you out,” Scott Sanborn, a Lending Club executive, told the Journal.