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.

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.”
  • 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 switching costs associated with switching banks.

How Statement Stuffers Work

Typically, statement stuffers include an overview of financial services that are related to those which the customer has already been subscribed to. For instance, a banking customer who holds a checking and savings account might be given a statement stuffer advertising personal lines of credit or retirement savings accounts. Although these services are mostly offered by the institution already serving that customer, the promotional offers may originate from other institutions with whom they are partnered.

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

Statement stuffers are helpful to financial institutions they're used to enhance profitability through cross-selling, which is 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 their 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 are used for non-commercial purposes, such as when informing the customer that a change to the terms or conditions of their accounts has taken place.

Real World Example of a Statement Stuffer

Many financial firms would like to be involved in as many shares of their customers’ lives as possible. After all, customers who have multiple services arranged through a particular provider may be less likely to switch providers due to the cost and complexity of doing so. As a result, a key goal for financial firms is to maximize a customer's share of wallet, which is the total dollar amount that a customer spends for a particular company's products.

For example, many life insurance companies today also offer other insurance products, such as disability income insurance or long-term care insurance. Increasingly, the list is expanding to include investment services as well, such as various annuity products

Likewise, banks and other financial services companies may wish to expand their product offerings into insurance, stock brokerage services, 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 is dependent upon the institution for much of their financial life. If done successfully, this strategy of product diversification and direct marketing can increase the customer’s switching costs or the fees they would incur if they decided to change providers, thereby providing a competitive advantage.