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Why Direct Mail Marketing Is Effective for Insurance

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Written By  
FM Engage

“Isn’t direct mail marketing dead?”

We’ve been asked this question more times than we can remember, but we’re here to tell you no, it’s not.

Direct mail is highly effective for the insurance sector, yet many agencies need help to improve their investment and deliver significant results. Adding direct mail to your insurance marketing plan allows you to build a personal connection with your audience that other marketing tactics can’t.

In this post, we’ll cover the benefits and challenges of direct mail marketing and how to implement a successful campaign.

You’ve Got Mail: What Is Direct Mail Marketing?

Direct mail is the classic advertising method of mailing promotional pieces to your target audience to elicit a response and generate new business.

Common types of direct mailer options for the insurance industry are:

  • Postcards
  • Booklets
  • Self-mailers
  • Flyers
  • Sales letters

Even with rising paper and supply costs, direct mail is still one of the most effective ways to capture leads and nurture prospects offline.

Benefits of a Direct Mail Marketing Campaign

Most people might call direct mail marketing outdated, but it still offers much value for insurance companies. Some of the most notable benefits are:

> Increased Brand Awareness

Direct mail has a long shelf (well, fridge) life. When people get an important or exciting piece of mail, they stick it behind a magnet on the refrigerator to remind them to check it out later. Now, whenever they go to the fridge, they see your postcard and are reminded of your company keeping you top of mind.

> Improved Response Rate

Including physical mail in your overall marketing strategy adds a personal touch to your campaigns, can boost your response rates, and generates leads. The Association of National Advertisers (ANA) data shows that direct mail’s response rates average 9%, which is quite impressive compared to email’s response rate of 1%.

> It’s Trackable

You may not be able to follow each piece with a tracking number. You can, however, offer prospects and customers personalized links to custom landing pages or unique phone numbers. By doing this, you can assess the effectiveness of your direct mail campaigns.

> An Impressive Return on Investment

Even with rising costs, direct mail is still the most cost-effective marketing tactic offering a 112% return on investment (ROI). It’s important also to consider the type of mailer you send, as it could affect your ROI. In a 2022 report by MarketingCharts, letter-sized envelopes have a higher ROI than oversized envelopes (92.2%), dimensional (92.3%), and postcards (85%).

Common Mistakes of Direct Mail

How do you avoid your direct mail pieces from ending up in the trash or being considered junk mail?

Mistake #1: Poor Data Quality

One of the most common mistakes is poor data quality or insufficient data. If your data is coming from a third-party source, you could run the risk of it being inaccurate and outdated. For example, if a piece was sent addressed to someone who is deceased.

Not only will this hurt conversion, but it’s also expensive, and you’ll send a bunch of mail to people who don’t need it. Not only is this a financial loss, but it can also cause customers to lose trust in your company, especially if it’s a time-sensitive offer.

Mistake #2: Sending the Wrong Message

The quickest way to turn off a prospect or customer is to send them the wrong thing.

Imagine if you send a new customer offer to someone who has recently purchased a policy, they could be turned off by your company and not feel valued, which could cause them to look elsewhere already.

People don’t want impersonal offers or to feel like they are just like everyone else.

Mistake #3: Missing the CTA

Another mistake is sending direct mail without a call-to-action (CTA). Effective advertising always has a CTA; without one, you’re just wasting money on postage and printing costs. Define the purpose of the mailer and the response you want the audience to take before sending anything out.

Mistake #4: Missed Opportunities

Someone could experience a significant life event throughout the year, like buying a home, getting married, or having a baby. Each of those events creates a need to enroll in a new insurance plan or more coverage. If you aren’t aligning your direct email efforts with those periods in a person’s life, you could miss a chance to educate your audience or upsell new business.

Mistake #5: Lack of Integration

Lastly, not using a multi-channel direct marketing approach is another mistake. When planning your direct mail campaigns, you should consider how they could integrate with your digital marketing campaigns.

Some people need reminders or multiple touchpoints before they make a purchase, and creating a holistic strategy integrating direct mail and email could keep your audience engaged.

How to Plan Successful Direct Mail Campaigns

For some insurance carriers, it’s not a question of whether they should be incorporating direct mail marketing but how they can use it better to reach their customers and prospects.

The key to a successful direct mail campaign is more than just sending out postcards and hoping they land in the correct mailboxes.

Instead of mailing everyone on your list, you should hand-pick and segment your audience and craft a message that is relevant to them.

For example, you could have one audience group looking to switch providers, and you could send them direct mail postcards offering a new customer incentive. While another group consists of long-standing customers you want to build loyalty with and create upsell opportunities.

Creating rich customer profiles with deep customer data allows you to craft compelling copy that will resonate with the appropriate audience.

Through Franklin Madison, a sister company of FM Engage, we’ve built a first-party data library that provides a clear picture of which consumers are most likely to purchase.

We start every campaign with a comprehensive data modeling and scoring approach to identify prospects who are likely to buy—and how to reach them. By doing so, we can create conversion-focused strategies.

The more information you have about your potential customer, the better it is to identify their needs and tailor your message accordingly.

Optimizing Your Direct Mail Campaign

Direct mail advertising can be your secret weapon because it catches your audience’s attention as no other marketing medium can. If you want to connect with the most promising prospects through an optimal direct mail marketing strategy, contact FM Engage.

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