Online Lenders Rely on Direct Mail for Marketing

From the Wall Street Journal:

The most unlikely beneficiary of the online-lending boom may be the U.S. Postal Service.

LendingClub Corp., Prosper Marketplace Inc. and other financial technology, or “fintech,” companies are spending hundreds of millions of dollars trying to pry customers away from traditional banks. The main marketing channel for these online upstarts: old-fashioned snail mail.

Thanks in large part to online lenders, the average monthly volume of personal-loan offers sent through the mail has more than doubled in two years to 156 million in the year through July from 73 million in the same period in 2013.

A big reason online lenders make heavy use of mail, they said, is that it is still more effective than other types of direct marketing.

“Mail is not dead by any stretch of the imagination,” said R. Mark Graf, the chief financial officer of Discover Financial Services, at an industry conference last month. Referring to the online lenders, he said, “a lot of those guys now are starting to drop a lot of mail.”

Read more: Online Lenders Rely on Old-School Marketing