Three Things We’re Hearing
- Personal loan marketing down, consumer benefit up!
- Digital response options grow
- Debt settlement...
Four Things We’re Hearing
- Credit card acquisition marketing (unsurprisingly) plummeted in April
- As did marketing for Personal Loans
- Why do we talk about Direct Mail so much?
- The student lending market is heating up
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Consumer Credit Acquisition Marketing Volume was Down in April
- Mail volume in April for consumer financial products was down 35%-45% depending on the product
- This understates the massive decrease in direct mail due to trailing activity from early March programs that were either in flight or committed
- May volumes will more fully reflect the pause in consumer credit mail solicitations
- Digital card acquisition programs shut down much faster
Credit Card Acquisition Programs were Down Across both Mail and Digital
- Credit card direct mail was down 36% in April vs. April 2019
- You can begin to see reductions in individual issuer volumes, especially American Express
- Online acquisition volume paused even more substantially in April
Personal Loan Acquisition Volumes were Down Even More
- Personal Loan mail volume was down 45% in April
- There were consistent large reductions in mail volume among the top mailers, with the notable exception of OneMain
- While reductions in digital volume were not as widespread
Why do we Talk About Direct Mail so Much?
- We have been asked why we focus so much on direct mail activity – isn’t it obsolete compared to digital? The answer is no, no it’s not obsolete – and for good reason
- We estimate 77% of personal loans and 61% of credit card acquisitions spending came from direct mail in 2019
- Over the past several years, Credit Card mail has averaged between four and five billion pieces per year
- Personal Loan mail volume has been growing in recent years, exceeding three billion pieces in recent years
- 22 of the top 25 mailers in the personal loan segment are non-banks, with only three commercial banks among the top 25 mailers
- Why all this mail?
- Lists for credit products are most efficiently produced from credit bureau data, which requires the delivery of a firm offer of credit to access
- Direct Mail is the only channel through which you can guarantee a firm offer is made to each individual sourced from the bureau
- Therefore, mail is the most effective way to drive credit-qualified volume in new customer acquisitions
Student Lending Heats Up
- As student lending “peak season” approaches, the market is beginning to take shape
- Sallie Mae has reduced its variable rate 25bps to 1.25%, which leads the market as of now
- And Parent Loans from College Ave and RISLA now have fixed loans 66bps lower than Federal Plus Loans, and without the 4.25% origination fee
Going Forward
- Most acquisition volume measures are lagging indicators of current activities
- We are now seeing activity slowly picking up in select segments
Thank you for reading.
Email me with your comments and suggestions on future topics.
Jim Stewart
www.epicresearch.net
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