Consumers are being bombarded with more direct mail and email from their banks, according to new data from market research from Mintel Comperemedia. As the credit crises caught many financial institutions in its grip, banks appeared to be trying to maximize revenue from existing customers.
During 2008, banks increased direct mail offers cross-selling additional products and services to current clients by 57 percent from 2007. Over the same time period, marketing direct mail offers sent by banks to lure in non-customers rose just seven percent.
Banks also increased other direct mail communications to their customers via informational and loyalty mailings, renewal notices and upgrade offers. Mintel reports a 37 percent increase from 2007 in banking direct mail pieces sent to manage current client relationships.
"Though the bulk of direct marketing spending is still devoted to acquiring new customers, many banks increasingly recognize the value of cross-selling products and services to current clients," said Stephen Clifford, vice president of financial services for Mintel Comperemedia.
Why go after existing customers instead of new customers? Aren't new customers the path to growth? Not necessarily.
"A customer who uses two or more of a bank's products likely has a deep, loyal relationship with that bank," Clifford said. "So, cross-selling to existing customers is a wise direct marketing strategy, especially now as the economy makes attracting new clients difficult. An effective product cross-sell strengthens the existing relationship and helps the bank secure additional deposits."
Banks also increased current customer cross-selling efforts through email, according to the data. Cross-sell emails tracked through Mintel's email panel rose from a two percent share of banking email in 2007 to a five percent share last year.
"With credit markets tighter than they've been in decades, banks are especially eager for funds to support lending, so they want to get more deposits out of existing customers," said Clifford. "I expect that this year we'll see continued interest in current clients as a way for banks to expand relationships and address difficult economic challenges."
