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
Today’s newsletter takes 4 minutes to read
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.