I get asked that question quite a lot. I don’t really have an off the cuff answer to it, depends who’s asking and how interested they actually are!
The standard non technical reply “you know the cards you have in your wallet? Well we print the letter it came with, print your name on the card, put the two together and post them to you”
To which I usually get a response of “oh right, I thought you just sent out junk mail…”
Which is interesting. I’m not really convinced that anyone can afford to send out junk mail anymore, that tends to land in my email inbox several hundred times a day….. If you are going to stand the costs of sending a postal mailshot then it isn’t going to be junk, it’d better be highly targeted and relevant to the person receiving it hadn’t it? Otherwise it’s a huge waste of money, and who can afford that? (apart from Virgin and Barclaycard…)