Lending Club is the darling of the venture capital world at the moment and has raised more than $1.2 billion (£0.76 billion), largely on the back of old-fashioned direct mail.
The company is aimed squarely at the sharing economy, allowing people to lend their savings and spare money to others that need a short-term loan or business start-up funding. Essentially this is P2P loans, with the man on the street able to borrow money without the usual crippling repayment rates, and savers that have been stuck in a quagmire of poor returns can get a better percentage rate if they take the risk and loan it out.
It’s a web-based tech company that could be forgiven for going down a pure internet marketing route. That simply isn’t the case, however.
Of course, the company is working hard on its SEO with an aggressive content marketing strategy. Like many other successful companies, though, Lending Club has not foregone the traditional, tried-and-trusted forms of reaching the customer and has invested heavily in TV advertising and printed direct mail.
Lending Club has achieved sensational marketing results with direct mail. In fact, the majority of its borrowers came through the classic tactic, a postcard through the letterbox. The postcard is simply about engagement and credibility; it’s the first step on the ladder and the very nature of this online platform means that customers and lenders have to go online.
A QR code on the postcard and a clear message that explains this controversial and, at first glance, risky form of borrowing from and lending to each other, rather than the banks, helped Lending Club build $1.2 billion of funding and a valuation of $9 billion at the last count. By any measure the company has become the latest ‘unicorn’.
In the modern age, even the old-fashioned form of direct mail has to be integrated with a multi-channel approach. It is a testament to the power of printed direct mail material, though, that the high-tech power players like Lending Club and Google (which relies on direct mail extensively for its B2B offerings) have not uncovered a more effective alternative.