Thursday, February 7, 2008
Decline in Credit Card Mail Volume
Direct Magazine reports today: Subprime Woes Cause Credit Card Mail Decline.
"Credit card direct mail volume declined during the fourth quarter, as issuers were strained from the fallout of the subprime mortgage crisis and unsure about the economy, according to Synovate."
Well, this news comes as no surprise, right? Card issuers rely on consumer credit data from the credit bureaus to make decisions as to who is pre-approved for their card. And, typically, the sweet spot, the perfect target, are those consumers who are a tad stretched financially, hence have a need for more credit. Yet, that consumer still must have the ability to pay their monthly bills.
As more and more consumers are stretched to the point where they can no longer even pay their mortgage, there are fewer qualified (and needy) consumers to market credit cards to.
But, don't feel too sorry for the credit card companies...
I was floored by this fact from the article: "Overall credit card mail volume for the year was 5.2 billion, down almost 10% from 5.8 billion in the previous year."
OK, that's 5.2 BILLION pieces of mail!
I've been in the direct mail business for a long time. Yet, these types of numbers continue to astound me. I know that the credit card issuers employ lots of smart marketers who have the targeting down to a science. Yet, I can't help but think that this mail volume could be reduced significantly. Any ideas?