Maxed out on affiliates? Where to spend your next $100,000
What we learned in our 90 minute discussion with Rich Walker on Direct Mail
If you’ve spent any time in the fintech lending space, you already know that affiliate marketing is one of the biggest growth levers out there. Lenders are spending $4B-$6B per year acquiring customers through Credit Karma, LendingTree, Experian, and others. It’s efficient. It’s targeted. It scales.
But what if I told you that the only other marketing channel that consistently rivals affiliate marketing for customer acquisition volume is…direct mail?
Sounds counterintuitive, right? Especially if you’re coming from the digital world, where campaigns are launched in hours, A/B tests are run in real-time, and data flows in instantly. Meanwhile, direct mail is old-school, slow, and operationally complex.
And yet—lenders keep sending billions of pieces of mail every year (they do it because it works).
Some claim direct mail is a dying channel. But, the important question is whether it can drive ROI for your business today at scale. And the answer to that is yes (even if it might be slowly declining YoY).
The Scale of Direct Mail in Lending
Let’s start with some numbers:
Last year, consumer lenders sent 6 billion pieces of direct mail
About half of that (3 billion pieces) was for credit cards. Another 1.5 billion was for personal loans
In total, lenders spent $3 billion on direct mail campaigns
Lenders like Capital One, Chase, and Amex are pumping money into this channel because it delivers incremental customers. And if it can deliver incrementally for them - on top of a broad mix of other channels - it can deliver for your fintech, too.
Direct Mail vs. Affiliate Marketing
Here’s what makes direct mail a perfect complement to affiliate marketing:
Affiliate marketing focuses on demand capture. It finds the hand-raisers, consumers actively searching for credit products, clicking on offers, and comparing options.
Direct mail focuses on demand generation. Lenders use credit bureau data to pre-screen and target the highest-intent customers, even if they weren’t actively on the market.
When done right, these two channels can work together in a powerful way.
I’ve had more than one lender tell me their affiliate volumes went up when their direct mail campaigns were in market. That’s because the mail piece created a memorable impression of the product (or the brand) which led to higher response rates for the mail-sender when the consumer shopped in the affiliate marketplaces.
Source: The Free Toaster, based on our Podcast with Rich Walker
Why More Digital Marketers Should Pay Attention to Direct Mail
If direct mail is so effective, why don’t more fintech lenders start there? Simple:
It’s expensive. A single piece of direct mail costs around $0.50 to produce and send. That’s a $500 CPM—far higher than digital channels.
It’s slow. Unlike digital campaigns that launch in minutes, direct mail takes weeks to produce, send, and analyze.
It’s operationally complex. You need to work with letter shops, navigate USPS logistics, and comply with strict regulatory requirements (thanks to the Fair Credit Reporting Act).
But here’s the thing: once a lender gets direct mail working, it scales like nothing else.
For early-stage fintechs, the playbook usually looks like this:
Kickoff affiliate marketing—the largest digital channel for lenders.
Expand to search and social—fast, easy, and familiar, but limited in scale.
Layer in direct mail—high initial friction, but once optimized, it becomes a workhorse for long-term, efficient customer growth.
This is why you see fintech lenders—companies that started as digital-first—eventually adopting direct mail as a core channel. It’s not about replacing digital, but about stacking channels together for maximum efficiency.
The Economics of Direct Mail
Let’s break it down:
The cost of a direct mail piece is ~$0.50.
A high-performing lender can expect a 1% response rate (i.e., 1 out of 100 recipients will respond).
Approval rates are closer to 70%, meaning for every 10,000 pieces mailed ($5,000 spend), they’ll book 70 new loans.
Now, let’s compare that to an affiliate campaign:
Affiliate cost-per-funded-loan (CPFL) often ranges between $100-$300.
Direct mail CPFL can be in that same ballpark—sometimes lower, sometimes higher, depending on the lender’s underwriting and pricing strategy.
This is why lenders love direct mail—it’s predictable. Once they’ve optimized their models, they can pour money into it at scale with very little incremental lift required.
What This Means for Fintech Lenders
If you’re running growth at a fintech lender and you’re not exploring direct mail, you’re leaving money on the table.
Yes, it’s hard to setup initially. Yes, it’s expensive. Yes, it’s slow.
But guess what? It drives the right CAC at scale and that’s exactly why the biggest players keep using it.
Direct mail isn’t a channel where a half-baked attempt will unlock the channel. You have to commit to iterating and spending 9-18 months heads down before it “works”.
Once you crack the code, ramp up to millions of pieces per month.
And if you’re already deep in affiliate marketing? Even better. You’ve likely got the credit-based targeting skills needed to win in direct mail.
Smart fintech lenders are playing both sides of the game—capturing demand with affiliates while creating demand with direct mail. That’s a winning formula.
Ready to Get Direct Mail Into Market?
Email carlos@ghostmode.co with subject line “Direct Mail” and we’ll send you a (proven) 6-step guide on how to launch a Direct Mail program (based on Rich Walker’s suggestions from the Podcast).
Or, check out the conversation on The Free Toaster Podcast: Spotify // Apple // Audible // Podbean // iHeart
About Us
Welcome to The Free Toaster! The newsletter for marketing pros at fintechs, banks, and lenders.
Inspired by the free toasters banks used to give to each new customer, we’re here to help you acquire more customers at scale. We deliver fresh news, data, and insights to help you acquire more customers—minus the breadcrumbs.
Want to follow the authors on social media? Find Nick Madrid and Carlos Caro on LinkedIn.