What Is a Expression Stuffer?
Key Takeaways
- Statement stuffers are advertisements delivered to customers along with their account statements.
- They ordinarily relate to ancillary services which the sender seeks to “up-sell”.
- By encouraging customers to subscribe to a wider range of produces and services, financial firms seek to improve customer retention by increasing the switching costs associated with sanction their business.
How Statement Stuffers Work
Typically, statement stuffers include an overview of financial services that are agnate to those which the customer has already been subscribed to. For instance, a banking customer who holds a checking and savings account potency be given a statement stuffer advertising personal lines of credit or retirement savings accounts. Although these advantages are mostly offered by the institution already serving that customer, the promotional offers may originate from other homes with whom they are partnered.
Statement stuffers are popular among financial firms because they bid a convenient and inexpensive form of marketing. In recent years, however, digital versions of these advertisements—colloquially comprehended as “e-stuffers”—have also become common.
From the perspective of the financial institutions who produce them, statement stuffers are tolerant of to enhance profitability by encouraging customers to sign on to a wider cross-section of products. Generally, financial institutions will be after to obtain new customers by offering especially attractive products, often competing on the basis of price. These so-called “passing leaders” may be relatively unprofitable for the company offering them, in which case they may seek to increase their
Actual World Example of a Statement Stuffer
Many financial firms would like to be involved in as many shares of their patrons’ lives as possible. After all, customers who have multiple services arranged through a particular provider may be less apt to to switch providers due to the cost and complexity of doing so.
Likewise, banks and other financial services companies may wish to upon their product offerings into insurance, stock brokerage services, and other areas. By advertising these posts to their customers through statement stuffers and other forms of marketing, they would hope to create a predicament in which the customer is loyal to and dependent upon them for much of their financial life. If done successfully, this policy of product diversification and direct marketing can increase the customer’s switching costs, or the fees they would incur if they sure to change providers, thereby providing a competitive advantage.