Some card issuers turn away from direct-mail pitches
NEW YORK — The pesky piles of credit-card offers that clog many Americans’ mailboxes may start to taper off a bit.
Since the early 1990s, the volume of credit-card solicitations mailed to U.S. consumers has increased more than sixfold, with card companies last year sending out more than 6 billion offers, according to market-research firm Synovate. But the pitches have been losing effectiveness. Just three out of every 1,000 offers generated responses last year, down from about 28 per 1,000 in 1992.
Now, top card issuers such as Bank of America Corp. and JPMorgan Chase & Co. are rethinking their marketing strategies and shifting away from direct mail. Instead, they hope to peddle more credit cards through bank branches, Web sites and even ATMs in hopes of boosting the effectiveness of their pitches and cutting costs.
The trend already appears to be taking a bite out of mail volumes. After sharp increases in 2004 and 2005, the number of credit-card offerings in the mail unexpectedly dipped by about 20 percent to 25 percent in the first quarter of 2006, said Brent Stratford, a vice president in Synovate’s financial services team.
“You have a much lower clutter rate in the homes,” Stratford said.
The disillusionment with direct mail stems in part from the high cost of sending out billions of pieces of mail. Those costs may get even higher next year if, as expected, the U.S. Postal Service raises postage rates.