Junk Mail Success Rate

Hi Straight Dope,

I am wondering what the actual success rate is with physical junk mail? We’re talking credit card offers, loan consolidation offers, life insurance offers, and the like.

I never respond to them, but I am wondering who does? Have any Dopers been swayed by an APR?

Is it cost effective for companies to send out mail of this nature?

I mean, if I receive a lot of junk mail from one company, it’s going to make me want to sign up for their service even less than I would otherwise. Even considering the brand awareness I get from glancing at their letter.

Thanks,

Dave

Yes it is, or else thousands of companies wouldn’t do it. It’s the same question with all advertisement, do the profits exceed the costs? On average, they do. That doesn’t mean that every campaign is a success.

I am not an expert nor in the business, but I have used direct mail in the past.
It all depends on the campaign, but success rates hover around 1% or less. Sometimes a lot less.
Hopefully someone with more industry knowledge will swing by and answer this question.

BTW, internet advertising which is far more targeted has a click through rate of 0.3%. Good thing it is so cheap…

I agree. It’s a complete waste of the company’s time and money. They might as well flush it down the toilet, but enough people respond to make it worth their while. On any given day, someone is thinking about changing their credit card company, and lo and behold, they get a mailing from some random credit card company. Really. That happens enough to make it worth it for them, or they wouldn’t do it.

Many years ago for me it was a 100% response rate if they had a business reply/pre-paid envelope. I would take one of the sheets (without any personal information) and send it back in the envelope. Figured if they were going to waste my time I would waste theirs and have them pay postage to boot.

Ahh- memories of my early 20s when I was poor and didn’t have much of a life.

Wow, a6ka97, that’s sweet revenge, I guess?

Would those same companies continue to send you mail after ostensibly having received your envelope?

Dolphinboy, I totally get that’s how it happens…but it seems like if someone was thinking about changing their credit card company they would go to Google first. “Best Credit Cards” “Credit Cards Lowest APR” etc. A simple Google Search would likely get them further than any mailer would.

And even more, I hate that someone would respond to this sort of mail when it’s clearly not specific to you. Special Offer Just For Our Most Valued Members!!! Makes you feel special for sure.

I used to do that and would also put my return address on the envelope, hoping they would notice it and take my name of their lists.

Did. Not. Work.

There’s nothing on those envelopes that identifies who is sending it. So there’s no way for the company to know who to remove from their mailing list.

Way back in the 80s, I did something more elaborate. I taped the address block from the mailing to a piece of paper and hand wrote a note saying something like “please remove me from your mailing list.” and sent that back. Someone at those companies did do something with that note, since one time I trimmed all the alphanumeric stuff above and below the address. I got back a notice that they couldn’t remove me without that stuff.

Anyway, this eventually did seem to reduce the amount junk mail, at least for a while.

I have signed up for credit cards or other financial products that I was notified of by junk mail.

They often come with pretty large signup bonuses.

I have tried new restaurants that have sent out coupons in the mail.

The whole “in the age of the Internet” angle gets me thinking as well. Shouldn’t junk mail be going the way of paper maps, printed pictures and magazines?
I don’t even get bills in the mail anymore, it’s all electronic. 99.9% of my mail is now credit card ads, offers to change mortgage companies and AARP membership requests.

Ad guy here, who’s worked on many direct mail campaigns, for a wide variety of products and services, over the past 20 years.

Perhaps so, but frankly, most people are kind of lazy and uninformed. I see this kind of argument here on the board a lot (variations of “it’s simple to look and find that information online”), but bear in mind that, on the whole, the SDMB has a lot of over-educated, savvy people in its membership. :wink: And, honestly, that super-well-informed, financially-savvy consumer is not really the target of those ads.

Also, generally speaking, most of the people who respond to those credit card offers, etc., are only kind of vaguely thinking, “I would like to change my credit card company,” and a lot of them aren’t actively thinking about that at all. They see an attractive offer in a mail piece, and they decide to look into it. People who are proactively shopping for a better credit card are probably not sitting around, waiting for the next good offer to show up in their mailboxes.

Finally, as others have noted, the response rate on direct mail, as a whole, tends to be very low in the absolute (it’ll vary somewhat by product category). But, it doesn’t have to be super-high in order for it to be profitable. You can rest assured, if it wasn’t profitable, they would not still be doing it.

Some credit card offers are targeted/non-public and only available via mail or some other direct channel such as email/existing customer login. I’ve gotten credit card signup bonuses of this type several times.

Charities are the junk mail I wonder about. We donate to four specific charitable organizations annually, and occasionally to the American Red Cross following a disaster, yet we receive stacks of mail from organizations we’ve never considered supporting. And they repeatedly send us calendars and cards and address labels and socks and gloves and flags and all sorts of stuff that must cost them money. You’d think after a couple of tries they would get the message that we’re not going to donate to Boy’s Town.

For the record, I worked for a local chapter of a national non-profit (one of the oldest and biggest) for about five years, and they never sent junk to people who had never supported them, and only occasionally sent an appeal to those who had.

Thanks for the information, everyone.

I can’t argue with the ironclad argument that if it wasn’t worthwhile for them, companies wouldn’t do it.

That said, if these great offers as jacobsta811 described are only available via mail, I’d think companies would send emails saying WATCH YOUR MAIL FOR A FANTASTIC MAIL-ONLY OFFER!!! Or do they already and I just don’t realize it?

A related question would be: for offers that really do favor the customer vs. the company, how does the company expect to make money? Do they expect word-of-mouth to lead to longterm profit? What’s their calculation that makes these worth it? Like a cashback offer. You know, every time you use your card, you get 2% back or something. If we assume the person pays off their card every month, isn’t the company legitimately losing money?

Unless it’s from a company with which you already do business, they may well not have your email address. Snail-mail addresses (and the names of residents) are readily available from various marketing database suppliers; email addresses are much less readily available (and also tend to be a lot more ephemeral).

Also, unsolicited emails from companies with which you don’t currently do business tend to have very low open rates, and are typically seen as spam by the recipient.

You can’t assume the last part, and you can be sure that the bank knows that most people do not always pay off their credit card balances every month. Also, if a company gets you as a credit card customer, part of their potential profits are likely “cross-selling” you to get other products and services from them.

In short: while a particular offer might be (or appear to be) favorable to you, if it is not, in fact, profitable to the company (even if it’s in a way you don’t realize), they wouldn’t be offering it.

I take it that you’re either not in the US or you haven’t reached the magic age of 65. Since at that point, you’re going to be bombarded with proposals to change your Medicare Advantage Plan.

Those of you who get more junk mail than you want should perhaps look into this:

It’s totally legit and has been for decades. I’ve had my various addresses signed up with them over the years and it is highly effective at reducing junk mail. As they say, it won’t help with mail from businesses that you’re already dealing with. Though nowadays most of those have a way to opt out of their mailed advertising directed at their own customers. But this will help with everybody else.

The effect isn’t instant; it takes a couple of months, but then the junk mail just shrivels to near nothing. Really.

Not 65 yet, but it sounds like Medicare mail is looming in my future

Companies cannot market Medicare plans to you until 3 months before the month in which you turn 65, so you can count on the floodgates opening once that month hits.

The credit card still makes money on the fees they charge the merchants for accepting the credit card. They make more money on people who carry a balance, but still make money on people who don’t.

The companies only have to believe advertising is worthwhile to do it. Of course ad companies are going to try and convince companies that spending money on ads is profitable. Whether advertising works or not is a very difficult question to answer, and there is definitely not a simple answer. Here is 1.5 hours of audio talking about it, that also doesn’t manage to answer the question.