Maxed out on affiliates? Where to spend your next $100,000

If you’ve spent any time in the fintech lending space, you already know that affiliate marketing is one of the biggest growth levers out there. Lenders are spending $4B-$6B per year acquiring customers through Credit Karma, LendingTree, Experian, and others. It’s efficient. It’s targeted. It scales.

But what if I told you that the only other marketing channel that consistently rivals affiliate marketing for customer acquisition volume is…direct mail?

Sounds counterintuitive, right? Especially if you’re coming from the digital world, where campaigns are launched in hours, A/B tests are run in real-time, and data flows in instantly. Meanwhile, direct mail is old-school, slow, and operationally complex.

And yet—lenders keep sending billions of pieces of mail every year (they do it because it works).

Some claim direct mail is a dying channel. But, the important question is whether it can drive ROI for your business today at scale. And the answer to that is yes (even if it might be slowly declining YoY).

The Scale of Direct Mail in Lending

Let’s start with some numbers:

• Last year, consumer lenders sent 6 billion pieces of direct mail

• About half of that (3 billion pieces) was for credit cards. Another 1.5 billion was for personal loans

• In total, lenders spent $3 billion on direct mail campaigns

Lenders like Capital One, Chase, and Amex are pumping money into this channel because it delivers incremental customers. And if it can deliver incrementally for them - on top of a broad mix of other channels - it can deliver for your fintech, too.

Direct Mail vs. Affiliate Marketing

Here’s what makes direct mail a perfect complement to affiliate marketing:

• Affiliate marketing focuses on demand capture. It finds the hand-raisers, consumers actively searching for credit products, clicking on offers, and comparing options.

• Direct mail focuses on demand generation. Lenders use credit bureau data to pre-screen and target the highest-intent customers, even if they weren’t actively on the market.

When done right, these two channels can work together in a powerful way.

I’ve had more than one lender tell me their affiliate volumes went up when their direct mail campaigns were in market. That’s because the mail piece created a memorable impression of the product (or the brand) which led to higher response rates for the mail-sender when the consumer shopped in the affiliate marketplaces.

Why More Digital Marketers Should Pay Attention to Direct Mail