Tech Startup Uses Direct Mail on its Way to $5 Billion Evaluation
The world of tech startups is a lucrative one. So often we hear about another Silicon Valley company just getting in the game yet still being able to raise millions and sometimes billions of dollars to fund their new idea to change how the world operates. The nature of business today typically means technology plays some sort of role in how these businesses operate. This is also true of fintech startup Lending Club. The importance of direct mail in the success of this particular giant shows that the real key to success is not simply relying on tweets, but finding what works.
Who is Lending Club
Founded in 2006, Lending Club has grown to become the largest online credit marketplace in the world. The San Francisco-based company facilitates various loans—personal, business, medical, educational—by pairing people with access to finances with those who are looking for access to finances, all through an online platform.
Probably the most difficult part of beginning any business is having enough resources to maintain operations. Bootstrapping becomes part of your vocabulary. (This is when an entrepreneur finances his/her business without financial aid.) And as a business owner, you do everything you can to be efficient while still trying to compete with leaders in your industry. This wasn’t the case for the founders of Lending Club, who were able to raise $1.2 billion to fund their company.
More intriguing is that in the digital world that we live in today, and with the many digital marketing streams presently available, Lending Club was able to build itself up as an industry leader worth over $5.0 billion—largely through direct mail marketing. Lending Club’s SVP of Marketing Chris Williams says, “direct mail is still about 50% of our business.”
Direct Mail Works
In some ways it is surprising that a company this large still utilizes what many consider an old-fashioned way of marketing. But when looking at the attributes of direct mail marketing and what those attributes mean to the finance business, it’s not nearly as surprising.
Even today, people are still very private and careful when speaking about or interacting with third parties about their finances. This goes for businesses as well. Each still want to feel secure, and feel as if they are being dealt with on a personal level as opposed to another number standing in line.
Direct mail is able to offer that personalization and comfort many people yearn for. Communication through direct mail feels safe. Prospective customers take the time to read the content more thoroughly, especially when it has to do with finances.
Moreover, direct mail works. It carries higher engagement rates than other forms of marketing; including social media. And it converts targets into customers. The pairing of these two factors, combined with the personalization and comfort variables, make direct mail marketing the perfect medium for a company like Lending Club.
Macromark has over 25 years of direct mail marketing experience. We understand how effective this form of marketing can be and have been leaders ourselves in helping businesses execute campaigns to grow their consumer base. Visit our web site to learn more about Macromark’s services and how direct mail can take your next marketing campaign to a whole other level.