Statement Stuffer

Statement Stuffer

Investopedia / Ryan Oakley

What Is a Statement Stuffer?

A statement stuffer is a type of sales brochure commonly used in direct marketing campaigns. Specifically, it is associated with financial service providers such as banks and brokerage companies, who often include these advertisements along with their monthly account statements and other correspondence.

The purpose of statement stuffers is to “up-sell” account holders on related services, such as credit cards, lines of credit, or additional brokerage services.

Key Takeaways

  • Statement stuffers are advertisements delivered to customers, along with their account statements.
  • Statement stuffers often relate to ancillary services which the sender seeks to “up-sell" to existing customers.
  • Statement stuffers encourage customers to sign up for a wider range of products and services.
  • In the end, statement stuffers help financial firms improve customer retention by increasing the costs associated with switching to a new provider.

How Statement Stuffers Work

Typically, statement stuffers include an overview of financial services that are related to providers with which the customer already has a relationship. For instance, a banking customer who holds a checking and savings account might receive a statement stuffer advertising personal lines of credit or retirement savings accounts. Although the institution already provides services to that customer, the promotional offers may originate from their partner institutions.

Statement stuffers are popular among financial firms because they offer a convenient and inexpensive form of marketing to customers who already use their basic services. In recent years, however, digital versions of these advertisements—colloquially known as “e-stuffers”—have also become common.

Electronic statement stuffers, or "e-stuffers," are becoming more popular in the age of paperless banking.

Statement stuffers allow financial institutions to improve profitability through cross-selling, or encouraging customers to sign up for a wider cross-section of products. Generally, financial institutions will seek to obtain new customers by offering especially attractive products, often competing on the basis of price. These so-called “loss leaders” may be relatively unprofitable for the company initially.

However, the company's goal is to increase profit margins by selling more profitable products or services to those customers in the future. As a result, statement stuffers are utilized to promote these higher-margin ancillary products and services. Occasionally, statement stuffers may be used for non-commercial purposes, such as informing the customers of a change to the terms and conditions of their accounts.

Example of a Statement Stuffer

If you have a bank account, you may already be familiar with the statement stuffers that accompany your monthly account statement. Most banks also provide other financial services, such as credit cards, mortgages, or auto loans, and they often promote these services to their banking clients.

This is also true in the insurance industry, where a single company might offer several different types of policies. If you have auto insurance, your statements may be accompanied by promotions for homeowner's or renters' insurance policies by the same insurer. Many life insurance providers also offer other insurance products, such as disability income insurance or long-term care insurance. The list is increasingly expanding to include investment services as well, such as annuity products

Why Companies Use Statement Stuffers

Financial firms seek to be involved in as many parts of their customers’ financial lives as possible. Customers who pay for multiple services through the same provider may be less likely to switch to a new provider, due to the cost and complexity of doing so. As a result, a key goal for financial firms is to maximize their share of wallet, the total dollar amount that a customer spends on their company's products and services.

Likewise, banks and other financial services companies often expand their product offerings into insurance, stock brokerage services, retirement planning, and other areas. By advertising these services to their customers through statement stuffers and other forms of marketing, banks can create customer loyalty whereby the client depends upon a single institution for multiple financial activities.

If successful, this strategy of product diversification and direct marketing can make it harder or more expensive for the client to switch providers, thereby creating a reliable and consistent customer base.

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