The following blog post was originally published in Investopedia:
When considering the marketing and advertising options available, many financial advisors are ignoring traditional direct mail in favor of using email or other digital
communication tools to connect with potential clients. Direct mail is making a powerful comeback for those that are trying to deliver a message to Baby Boomers today. While marketing consultants are quick to turn to digital marketing because marketing tactics have evolved significantly, ignoring the more traditional and tangible tactics – like direct mail – may prove to be a missed opportunity.
Today, everyone’s email inbox is inundated with junk mail. To avoid the mountain of messages, some people have resorted to creating separate email accounts just to try and weed out all of the unwanted clutter. Even for those with a single email address, spam filters continue to evolve in sophistication, and often, messages end up directly in their junk folder. There are numerous factors to consider to increase your opportunity for success with direct mail marketing. (For more, see: An Example of an Advisor’s Successful Marketing Plan.)
What gives with email marketing? The reality is, communicating via email is impersonal and snail mail connects in ways that other media can’t match. According to the United States Post Office (USPS) and the Direct Marketing Association (DMA), 70% of Americans said snail mail is more personal than the internet. In fact, the most successful email marketing messages are those that actually look like a personal email. A simple subject line like “question for you” will likely outperform something that appears much more commercial. Personalized messaging directed at the right target audience is critical with direct mail as well.
Studies have shown that an individual or organization needs to make multiple impressions on a potential client in order to build trust, confidence and a positive reputation. From this research, a rule dubbed the “Rule of Seven” by Dr. Jeffrey Lant says that contact should be made with potential clients a minimum of seven times within 18 months for them to remember the marketed person or business. While email is much cheaper than direct mail, remember that you’ll often get what you pay for. Our data has shown that email marketing is far more effective when used as a follow up with prospective clients who entered your client acquisition funnel through different means.
So how can advisors improve their direct mail marketing efforts? Here are eight items to keep in mind.
- Know When to Use Postcards
One of the most effective ways to communicate via direct mail is by using postcards. Beyond just being cost effective, the postcard is a valuable marketing tool because of the visual impact it can have on the consumer. Postcards also have a higher read rate than other direct mail. USPS reported that 98% of Americans check their mail every day, and a report by Epsilon showed that 80% of consumers sort through their physical mail as soon as they get it, oftentimes as they stand over their garbage can. These and many other direct mail stats can’t be ignored. (For more, see: 6 Essential Marketing Tips for Financial Advisors.)
The number one goal of direct mail marketing is to get the recipient’s attention. A postcard ensures you’ll get some attention, whereas an envelope piece may never get that chance of making the first impression. That first impression will always be the title on the marketing piece.
- Choose a Strong Headline/Title
The effectiveness of a marketing effort will only go as far as how strong your headline/title will be. When our firm creates new marketing content, the lion’s share of the time spent on creating the piece actually goes into having an impactful headline. The headline or title of a direct mail piece can be similar to the subject line of an email. It has one purpose – to draw them in. The headline should feel personalized enough to communicate to the recipient, “This message is specifically for you.” Let’s face it, it’s human nature to ask, “What’s in it for me?”
- Define and Target Your Market
Message-to-market match is critical to the success of any marketing campaign, whether it’s direct mail or otherwise. You can have the strongest headline in the world, but if there is not a message-to-market match, the campaign will fail miserably. Define your market and cater the headline and message to speak directly to that consumer.
- Don’t Be Afraid to Experiment
Marketing is all about trial and error, so advisors shouldn’t be afraid to experiment with direct mail campaigns. A/B split testing is imperative. With that said, the most common mistake made when testing copy is too much change all at once. Typically, it is advised to change one variable when conducting split tests. For example, change the headline, or change the size of the postcard, or change the font. Just don’t do it all at once as you won’t be able to track what change actually contributed to better (or worse results). Another thing to be sure of when you are split testing is to use a large enough sample size. Consider a minimum of 1,000 as the low-end starting point. (For more, see: 5 Marketing Strategies for Financial Advisors.)
- Ugly Outperforms Pretty
It’s easy for smaller firms to exhaust too many resources on creating a campaign that looks pretty. In fact, if you hire an outside design firm to help, you’ll find that designers will go to great lengths to make a piece pretty. They have to justify their costs, right? More often than not, ugly will outperform pretty when it comes to direct mail marketing. Put the focus on the title, copy, and call to action rather than making a piece pretty with graphics and pictures.
- Know Your Audience
If you’ve hired a marketing design firm and insist on making your marketing pieces look pretty, put the focus of those efforts on your existing client base. At this point, your brand and picture comes more to the forefront. With any marketing effort, be sure to define what success will look like and use your intended audience to dictate what the marketing piece will look like.
You tell your investing clients to diversify because it is the smart thing to do. The same holds true when it relates to an advisor’s marketing efforts. Approaching a marketing effort from a digital perspective (email/social media), in addition to direct mail efforts will have a much greater opportunity for exponential success.
- Data Quality is Critical
There isn’t a day that passes where I’m not offered the opportunity to purchase a list of “qualified prospects.” Using the right data provider (consumer lists) is of equal importance to that of having an effective title/headline. In the world of lists, there are data compilers and there are data re-sellers. Do your homework to determine who has the cleanest data for the specific demographic you are looking to reach. Not all lists and data providers are created equal. Purchase new lists regularly, as the average person in the United States is expected to move more than 11 times in their lifetime, according to the Census Bureau. This means that your list will “turn over” as much as 25% annually. (For related reading, see: Growth Strategies for Financial Advisors.)