The news: Most financial institutions (FIs) allocate 11% to 25% of their marketing budgets to direct mail campaigns—underscoring its mainstream marketing appeal—per Direct Mail API Lob’s “State of Direct Mail” report. And EMARKETER’s “US Banking Consumer Habits” survey reinforces this with the finding that 37.4% of consumers received direct mail from banks in the past year. But many companies using direct mail struggle with performance.

Zoom in: Per EMARKETER data, 23.1% of consumers became aware of FIs’ services through direct mail. While that awareness is lower among younger consumers—just 18.3% of Gen Z and millennials learned about financial services this way—it rises to 27.6% among Gen X and baby boomers, making it a particularly effective way to reach older consumers.

But execution remains a major barrier: 87% of businesses report logistical challenges, and 82% face surprise costs or missed deadlines when running direct mail campaigns, per Lob.

Why this matters: Direct mail is a proven and widely used channel, with 60% of financial providers investing in it, per Cornerstone Advisors. But operational inefficiencies are limiting its full potential. Improving logistics, cost planning, and execution could help companies improve value from an already significant investment. In addition, improving planning and execution can improve direct mail’s resonance with younger consumers. 

Zoom in: According to Lob CEO Ryan Ferrier, “You can’t optimize if you don’t understand what is driving customer action.” Yet many marketers still underutilize tools like QR codes and personalized URLs that make campaigns measurable. 

At the same time, effectiveness depends heavily on relevance, per Ferrier: “When direct mail falls short, it’s usually because the message isn’t relevant,” Indeed, consumers are quick to discard generic outreach. High-performing campaigns instead are often tied to behavioral triggers and real customer activity. 

Recommendations for direct mail users: Banks should assign clear ownership of direct mail logistics end-to-end—whether in-house or through an agency. Cost overruns and missed deadlines often stem from fragmented responsibility across marketing, operations, and vendors. A single accountable team can better manage production, delivery, and US Postal Service strategy while reducing miscommunication across stakeholders.

Stronger ownership also enables better planning and budgeting by bringing logistics decisions into the campaign process earlier to minimize surprises and improve overall measurability.

Banks should treat direct mail as part of an omnichannel strategy by integrating it with digital channels and measuring each interaction. Personalizing messaging with data, analytics, and AI—and connecting campaigns to behavioral triggers and follow-up experiences—ensures direct mail works alongside email, mobile, and web to drive stronger results. Ferrier notes that, “The format should follow the goal of the email. For financial services, where trust and professionalism are paramount in mailings such as pre-approvals, statements or compliance notices, traditional letters in envelopes consistently outperform. They signal privacy and credibility in a way a postcard can't. But for acquisition offers, promotions, or reengagement, postcards and brochures do real work.”

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