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Economy sags, mailboxes empty as card issuers cut direct mail offers

Daniel Ray

An ailing economy means emptier mailboxes, according to a new study.

Financial service companies — and especially credit card issuers — have sharply cut back their direct mail offers according to the survey released Tuesday by Mintel Comperemedia of Chicago.

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Direct mail is the unsolicited credit card offers, convenience checks and balance transfer pitches sent by the truckload each day to millions of consumers.

The number of direct maillings from banking, credit card, investment, and mortgage and locan companies fell by 10 percent in the first quarter of 2008, compared to the same period a year ago, the company estimates.

“With credit lines tapped and people struggling to make ends meet, both consumer spending and savings are down,” says Mintel senior analyst Chris Zagorski in a press release. “Banks, card issuers and lenders have to look at today’s consumers in a new light and find innovative ways to secure and maintain their business.”

Another potential reason beside the economic slump could be that more people are opting out of direct mail, but Mintel credit card analyst Lisa Hronek doubts that we’ve gone that green.

 “We do not track this and so cannot say for sure,” she says. “However, we don’t think this is a major cause of mail declines.”

Among the report’s highlights:

  • Overall financial services direct mail volume fell 13 percent, from 4.8 billion pieces to 4.2 billion.
  • Credit card issuers cut back on direct mail the most, according to Mintel esimates, dropping 14 percent — from 3.0 billion mailers to 2.6 billion.
  • Three of the top credit card issuers — Chase, Bank of America and HSBC — reduced mailings by 15 percent between the first quarter of 2007 and the first quarter of 2008.

Mintel

Mintel’s research tracks earlier findings on direct mail by other firms: that direct mail solicitations from credit card companies are falling.

“Leading financial services companies, especially in the credit card space, could be retooling their strategies and shifting marketing dollars elsewhere,” Hronek says. “Rather than focusing strictly on acquisition through direct mail, companies may be looking more towards customer retention or e-mail communication.”

Update, May 28: More confirmation that credit card direct mail solicitations are falling came today from Synovate Mail Monitor. Its report for the first quarter of 2008 found that the volume of mail had fallen 18 percent, to the lowest level since 2003.

The Synovate data also measures the proportion of fixed-rate offers to variable rate offers. It said that the Federal Reserve’s series of rate cuts have apparently spawned a dramatic shift is under way, away from variable rate offers to fixed-rate offers. The company said fixed-rate offers have increased from 22 percent to 40 percent, “as issuers compete by trying to lock in consumers at the lower rates, while still anticipating further cuts.”

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