Statement and Billing Volume Analysis - Finserv and Healthcare

Part
01
of four
Part
01

Statement Volume - Banks and Credit Unions 3 (A)

Monthly, banks and credit unions send approximately 43,172 marketing offers through email. Below is an overview of the findings.

MARKETING OFFERS

  • Per month, it is estimated that approximately 43,172 marketing offers are sent through the email. (see calculations below).
  • According to Harland Clarke, more than 47% of banking providers send more than 10 email campaigns per month, 18% send 2-3 email campaigns per month, 14% send 6-10 campaigns, 14% send one campaign, and 9% send 4-5 campaigns.
  • The number of federally-insured credit unions in 2018 was 5,530.
  • In 2018, there were 5,542 FDIC-insured banks in the U.S.
  • In 2015, 190 financial institutions sent 8,000 campaigns to 86 million recipients 47% of these recipients sent more than 10 email campaigns per month, 14% sent 6-10 emails, 9% sent 4-5 emails, 16% sent 2-3 emails, and 14% sent one email. The majority of institutions sent at least 6 emails per month.

RESEARCH STRATEGY

To determine the average or approximate number of marketing offers banks and credit unions send through the mail on a monthly or annual basis, we first searched for industry reports on marketing strategies banks and credit unions use in media articles, press releases (such BizWire, PRNewswire), and consultancy firms (such as McKinsey). We had hoped that industry reports/articles would provide statistics on marketing offers to support the strategies proposed, however, these sources provided general information on digital marketing strategies banks should use.

Next, we searched for statistics on marketing emails in the banking industry on the websites of industry experts such as The Financial Brand, Harland Clarke, Embrace, Litmus, Center State, and others. From this search, we found industry benchmarks for emails such as click-through rates, open rates, and other metrics that show how successful a marketing campaign was.

Though we did not find the number of marketing offers sent through per mail, we did find information on the number of email marketing campaigns banking providers had per month in 2017. As an email marketing campaign is defined as "a coordinated set of individual email messages that are deployed across a specific period with one specific purpose, such as download a white paper, sign up for a webinar, or make a purchase with a provided coupon" by Campaign Monitor, we thought such information could give an indication of the number of marketing offers banks and credit unions send through. We searched for more recent figures on the website of Harland Clarke (the source of this information) but were unable to find more recent data. We also searched if other sources provided similar information. The websites of industry experts (such as Campaign Monitor, Litmus, Center State, Mintel, The Financial Brand, Return Path, Moveable Ink, and others) were consulted as statistics on email marketing campaigns can often be found on these sites. However, no more recent information could be found. From Harland and Clarke, we found a report from 2016 which provided data from 2015. The statistics for the number of marketing campaigns was quite similar to that of 2017. Therefore, we assumed that it would not differ significantly for 2018 and 2019.

With the information collected, we decided to estimate the number of marketing offers. We assumed that the statistics on the number of email marketing campaigns per month in 2018/2019 would not differ significantly from 2017 and took this as a proxy for the number of marketing offers. Furthermore, we sought the number of banks and credit unions present in the United States. We found that not all email marketing campaigns center around promotional offers. According to a dated source (2012) from Harland Clarke on average 53% (=(66%+55%+51%+41%)/4) of banking provider's email campaigns in a year are promotional. A more recent article shows that this percentage is 54% in general. Armed with this information we estimated the number of marketing offers.

CALCULATIONS
Number of Banks and Credit Unions
Number of banks = 5,542
Number of credit unions = 5,530
Total number of banking providers = 5,542 + 5,530 = 11,072

Number of Email Campaigns By Banking Providers:
47% of banking providers have more than 10 email campaigns.
= 0.47 x 11,072 financial providers x 10 campaigns = 55,038 campaigns

14% of banking providers have 6-10 email campaigns, thus on average 8 campaigns
= 0.14 x 11,072 x 8 = 12,400 campaigns

9% of banking providers send 4-5 email campaigns, taking the max amount of 5 campaigns
= 0.09 x 11,072 x 5 = 4,982 campaigns

18% of banking providers send on average 2-3 email campaigns, taking the max amount of 3 campaigns
= 0.18 x 11,072 x 3 = 5,979 campaigns

14% of banking providers send one email campaign
= 0.14 x 11,072 x 1 = 1,550 campaigns

The estimated number of marketing campaigns per month:
= 55,038 + 12,400 + 4,982 + 5,979 + 1,550 = 79,949 campaigns per month

Assuming that the percentage of promotional emails is 54%, the number of email offers each month is approximately
= 0.54 x 79,949 campaigns = 43,172 marketing offers.






Part
02
of four
Part
02

Statement Volume - Specialty Lenders 2 (A)

Although data on the average or the approximate number of marketing offers that specialty lenders send through the mail on a monthly or yearly basis was not available, we found that in May 2018, ten specialty lenders that Credit Suisse tracks sent out 368 million direct mails.

HELPFUL FINDINGS

  • The big four online home lenders: Lending Club, Prosper, Avant, and Best Egg, sent out 395 million marketing offers through direct mail in the first four months of 2016, according to Mintel.
  • In May 2018, ten non bank lenders (specialty lenders) that Credit Suisse tracks "sent out 368 million mail solicitations."
  • Some specialty lenders refuse to comment on the findings of research bodies like Mintel and Credit Suisse about the number of marketing offers they send by mail.
  • Chase launched a customer-driven digital mortgage experience for a faster, more transparent home loan process, and to promote it, they turned to their social media channels.
  • Optimization of mobile websites, using email marketing, marketing to millennials with direct mail are some ideas for marketing home loans in the United States.

RESEARCH STRATEGY

Information on the average or the approximate number of marketing offers that specialty lenders (auto or home) send through the mail on a monthly or yearly basis is not available. The primary reason for the information missing, can be due to its niche nature and lack of disclosures by individual lenders at such a granular level, to which no research reports or regulatory databases have any compiled info apropos of the same.

Your research team searched for reports or publications by various banking associations on the U.S. specialty lending sector. The idea here was to find pre-compiled information on the number of marketing offers that specialty lenders send through mail on a yearly or monthly basis that includes home or auto lenders in the industry. We looked for information on sites like the American Bankers Association, National Bankers Association, Consumer Bankers Association, among others; however, no such information was readily available. All the information found catered around the overall lending in the US subprime auto market, which is mainly provided by specialty lenders and the overall auto loan originations that have been completed by the US lenders along with the percentage of subprime, prime and near-prime loans.

Next, we combed through government databases and statutory organizations such as the Federal Reserve, FDIC, DFIP, SEC. We searched for reports, publications on these sites and found a small business lending survey report which provided some stats on the marketing activities, however, no relevant information could be located on the number of marketing offers sent through the mail by either home or auto lenders. We had thought that this strategy might work as they are potential sources which regulate the various specialty lenders or the related sectors (auto and home) in one way or the other and hence, the idea was to check if there are any mandatory or voluntary information filed by lenders around the number of marketing offers sent by mail in a year.

Additionally, we searched through media articles and news publications for articles that could be used to address the request. We looked for information on sites like Auto News, Housing Wire, Auto Finance News, among others. The idea was to find any comments made by industry experts or banking marketing professionals, and company spokesperson on the number of marketing offers sent through the mail by home/auto lenders. However, most of the articles published only provided general information on marketing strategies, trends in marketing. We thought that this strategy might work as sites like these are leading sources in the auto/home news industry and would have published such information.

Finally, we tried to triangulate the information by finding some data points as follows. Identifying the key players in the home/auto lending industry and then trying to find the number of marketing offers sent through the mail by one of these key players. We searched for reports, press releases, media publications for players like WellsFargo, Chase, Bank of America, among others. However, such information could not be located. The aim behind this strategy was to look for information for some top players and provide it as a proxy by multiplying the number for a company by the number of home/auto lenders in the United States.
Part
03
of four
Part
03

Statement Volume - Insurance 2 (A)

According to our data-based, triangulated calculation, approximately 7,243,460,765 marketing offers were sent through the mail annually by U.S. non-health insurance companies. The insurance industry data we used in formulating that calculation is included below, as is the step-by-step explanation of our triangulated calculation.

Number of Mail Marketing Offers From Insurance Companies

  • In 2014, property & casualty (P&C) insurance companies sent over 3.6 billion pieces of mail. That data was published by Mintel Comperemedia.
  • According to the Insurance Information Institute, "[t]here were 5,954 insurance companies in 2017 in the U.S."
  • Of those 5,954 insurance companies, 2,509 were P&C insurance companies.
  • Of those 5,954 insurance companies, 907 were health insurance companies. Thus, we deducted those health insurance companies from total insurance companies, as our research was focused on non-health insurance companies (5,954 - 907 = 5,047).
  • P&C insurance companies accounted for 49.7% (rounded to the nearest tenth) of non-health insurance companies in the U.S. in 2017 (2,509 (number of U.S. P&C insurance companies) divided by 5,047 (total number of U.S. non-health insurance companies) multiplied by 100 (to convert to a percentage)).
  • To estimate the number of mail marketing offers sent by U.S. non-health insurance companies, we formulated a cross-calculation, which is the following (when written in words): 3.6 billion (number of mail pieces sent by P&C insurance companies in 2014) is to 49.7% (market share of U.S. P&C insurance companies among total U.S. non-health insurance companies) as X (number of mail pieces sent by U.S. non-health insurance companies, the value we're solving for) is to 100% (all U.S. non-health insurance companies).
  • Accordingly, we multiplied 3.6 billion by 100 and divided that value by 49.7, which equals 7,243,460,765 (rounded to the nearest whole number).
  • Therefore, according to our data-based, triangulated calculation, approximately 7,243,460,765 marketing offers were sent through the mail annually by U.S. non-health insurance companies.

Research Strategy

The most-recent, relevant data we found about any number of marketing mailers sent by U.S. insurance companies was from 2014. That data was published by Mintel Comperemedia, which is a market research firm. The fact that the data pertained to P&C insurance companies' mailers worked well because it provided us with a non-health insurance company segment that then allowed us to estimate the number of mailers sent by all U.S. non-health insurance companies. Though the source doesn't expressly state that that particular data point applies to U.S. P&C companies, we believe it does because the other information in that report is about the U.S. insurance market. Thus, we believe that the source simply didn't mention U.S. every time insurance companies were referenced. Plus, the report certainly doesn't state that the P&C company count is global, thus further signaling that it pertains to the U.S. insurance market. The reasonable assumption inherent in our calculation is that the number of mailers sent by U.S. P&C insurance companies is equal across other types of insurance companies, such as auto insurers.

After finding that data, we then looked for the number of U.S. P&C insurance companies and U.S. non-health insurance companies. Those were relevant data points because they allowed us to triangulate the number of mailers across all non-health insurance companies per our triangulated calculation described above. The P&C insurance company count is from 2017, but that was the most-recent and relevant data we could find, though we looked for that number from 2014, but to no avail. As was noted in our research findings, we used very credible sources in compiling this data for our triangulated calculation, including Mintel and the Insurance Information Institute.
Part
04
of four
Part
04

Statement Volume - Credit Reporting 2 (A)

On average, TransUnion sends about 37.68 million marketing offers via mail in the United States per month. Details regarding direct mail offers sent and a research strategy have been provided below.

CREDIT REPORTING AGENCIES DIRECT MAILING VOLUME

  • According to Acxiom.com, the "art and science of direct mail in financial service marketing" has been centered around new customer or member acquisitions.
  • Over the last 5 years, there has been an average of 3.5-4.5 billion pieces of mail sent in the financial service marketing industry in the United States annually.
  • In 2017, there was an average of 300 million units mailed for marketing purposes in the United States in the financial sector each month.
  • TransUnion is one of the top credit reporting agencies in the United States and holds a market share of 12.56%.
  • According to their website, TransUnion most commonly sends credit card offers that they partner with, new member offers, and insurance offers through the mail.
  • After using the market share to calculate the percentage of total mailings sent, we determined that TransUnion sends an average of 37.68 million direct marketing offers in the mail each month.
  • Additionally, TransUnion sends an average of 452.16 million pieces of mail for marketing per year.

RESEARCH STRATEGY

In order to determine the average monthly or annual direct mail volume of credit reporting agencies, we began our search by scouring media sources, research articles, and news publications relating to credit industry direct mailing volume. Through this search, we were able to find data regarding the total direct mailing volume for the financial service industry as a whole. Unfortunately, after an exhaustive search, we were unable to find any articles or reports in the last 2 years that directly reference the direct mailing volume of credit reporting agencies.

We continued our search by scouring statistical data bases such as Statista as well as official websites such as USPS. Through these databases, we were hoping to find either precompiled data by industry and sub industry or data points that could be used to determine the percentage of direct mail that is sent by credit reporting agencies. Unfortunately, the only data found through this search was that Experian, Equifax, and TransUnion are the top credit reporting agencies. Additionally, data for the total pieces of mail sent in the United States and information regarding the direct mail market were also found. However, none of this data provided helpful insights into the number of marketing offers sent by credit reporting agencies.

Finally, we continued our search by searching for data that would allow us to calculate an approximate number of offers sent using the data we already provided. The goal was to find the market share of each of the three credit reporting agencies that could be used to calculate the share of direct mail sent by each agency. This search was focused on the market share with in the financial services market as a whole since that is the market that the original data was pulled from. Though this figure includes data from credit card marketing, the figure has been used as a proxy to calculate an approximate number of pieces sent.

Through this search, we found that TransUnion has a market share of 12.56% in the consumer financial services industry, however, after searching Marketwatch, Datanyze, and Csimarket, we were unable to find the market share precompiled for the other two agencies. We used this data to estimate the number of marketing offers sent per month by applying the market share to the total direct mailings sent by credit card companies in the United States.

CALCULATIONS

  • 300 million (monthly mailings sent) * .1256 (TransUnion market share) = 37.68 million.
  • 37.68 million * 12 = 452.16 million annually.
Sources
Sources