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Why GDPR can be a cash cow for financial services brands

Why GDPR can be a cash cow for financial services brands

By John Watson, Chairman, WPN Chameleon

Few sectors use acronyms more than financial services. There are at least 1,800 in circulation and the latest addition might just be the saviour of your brand’s marketing strategy.

The GDPR – General Data Protection Regulation in full – came into force in May.

The law highlights the potential to contact customers through direct marketing using the safe legal basis of ‘legitimate interests’.

In other words, harnessing a person’s data as necessary to provide them with a relevant product or service.

This lays to rest the myth that “cold” direct mail – rented or compiled lists – can no longer be used. It’s always been a big source of data for finding new customers, but the fact is it’s still alive and well after GDPR if you know what you’re doing. The big compilers have already built compliant lists, and profiling (also still permitted) can add new dimensions to the quality of the data.

Most useful is the rise of “partially addressed mail” – in reality, a door-drop supported by some neat data analytics – which, with competitive pricing from Royal Mail, is a potential success story for attracting new customers.

There’s also a mass of evidence that direct mail – addressed, partially addressed or not at all – has real impacts within an integrated marketing strategy. We all knew this intuitively, of course, but now there are copious facts and figures behind the thinking.

Yet in my view, financial services has lost the art of producing high-quality, impactful mail campaigns. Some mailings resemble a printout of Ts & Cs stuffed into an envelope. Yet an addressed letter can offer so much more. In fact, it can be a positive pleasure for the customer.

The direct mail stats don’t lie

Financial services brands are on a firm footing using direct mail. Effectiveness measurement group Jicmail suggests 72% of recipients open addressed financial post, more than any other sector except utilities.

The average mailing is read four times. Meanwhile, more than 1 in 5 FS mailings remain ‘live’ – not binned or filed – in a house one month after arriving, second only to retail.

I’m pretty sure, however, that most people would tell you they get fewer financial mailings these days. It’s got to the point where you can’t even lay your hands on a bank statement as proof of ID.

Contrary to what some people believe, it’s fine in most cases to use cold mailing lists for marketing even after GDPR’s implementation. And that opens the door for direct mail to become a central part of comms campaigns again.

Why and how to use direct mail

There’s a big opportunity to create memorable mail campaigns that boost customer response. Here are some reasons why:

  • It’s good to go back to the drawing board: FS mail was once a hotbed of creative thinking. For instance, insurers targeted parents just before school holidays prompting them to take out travel insurance; others persuaded home movers to check their contents cover. Today you’re more likely to see long-copy statements about rate changes or switching information. So, it’s time for a return to livelier, topical creative campaigns that pique interest. Instant print innovation is making this possible.
  • Don’t get stuck on boring envelopes: For too long, financial mailings have followed the easy route of heavily branded C4 envelopes containing dull leaflets. But good response will only come from intriguing content and design. The stats above prove consumers are genuinely interested in financial products, however complicated. People want to be engaged. If you’re going to the trouble of mailing them – and asking for £25 every month – it had better be interesting. Use the room mail gives you to tell a story delivered using an unexpected size or shape to surprise them. 
  • Digital loves physical: It’s a digital world but mail can still succeed. In fact, the two channels work really well together. Mail is the tangible manifestation of a brand. It gives people time to truly consider financial product information and make important decisions, while understanding the brand’s back story and personality. It can drive customers online where they can find more detail and offers if they wish. But beware: ensure your mail and digital presence are co-ordinated or the customer experience will be poor. I often advise brands not to use mail to drive people online if their website tells a different story.
  • Take a personal approach: GDPR has offered organisations a chance to get smarter with their customer data, cleaning and optimise it to improve targeting and deliver personalised campaigns. Data-driven direct mail campaigns can engage someone like no other channel can. It’s a world away from the spray and pray approach programmatic advertising has been accused of in recent times. 
  • Remember it’s best to test: In the past, companies regularly assigned 10% of their marketing budget to testing creative. It’s another strategy that seems to have been forgotten. As more financial brands reinvest in using direct mail post-GDPR, differentiation will be key. Testing different formats, creative treatments, and even promotions and incentives, can significantly boost response rates. It’s not good enough to say you can’t afford to test; you can’t afford not

Let mail put a stamp on your marketing

Those are some of the ways a direct mail campaign can boost customer response. It’d be great to see financial businesses rebuild their trust and confidence in the medium. After all, it is the third-largest advertising channel, racking up annual expenditure of £1.7bn [Advertising Association / WARC].

GDPR has changed the use of direct mail for financial products but hasn’t by any means ruled it out. Meanwhile, further electronic privacy regulations (PECR) are on the horizon, and that’s likely to create havoc for online communications. That’s just another in a long line of reasons why mail can come into its own once more.

All in all, financial companies should remember and recognise the difference direct mail can make as a central part of their marketing, rather than the post-script it seems to have become. Mail must be returned to the mix as a response mechanism feeding the sales funnel, bringing valuable volume in a competitive market.

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