Some Card Issuers Turn Away from Direct-mail Pitches

Mail carriers across the country are heaving a sigh of relief and popping a couple fewer aspirin, now that credit card issuers Bank of America Corp. and JPMorgan Chase & Co. are rethinking their marketing strategies and shifting away from direct mail credit card offers.

Turns out those offers may not necessarily be working as well for the companies as they thought. Expect a comment soon on the wetness of water and the blueness of the sky soon.

As a MarketWatch story puts it, the disillusionment with direct mail stems in part from the high cost of sending out billions of pieces of mail. Those costs may get even higher next year if, as expected, the U.S. Postal Service raises postage rates.

“Direct mail as an acquisition vehicle has a declining response rate,” said Matt Kane, a senior vice president in JPMorgan’s Chase credit-card unit. “We need to find these alternative distribution opportunities.”

So what?ll they do next? Look for offers in bank branches, Web sites and even ATMs in hopes of boosting the effectiveness of their pitches and cutting costs.

“I think we’ve got to be pretty much at the peak” of bulk-mail volumes, David Robertson, publisher of the Nilson Report, a card-industry newsletter, said of direct-mail marketing. “It just makes more and more sense for the biggest players to take a different tack.”