3 Tips for Lenders to Modernize Their Prospecting

How many years has your company been marketing lending offers to consumers? Five? Ten? Twenty? Fifty or more? It’s likely a lot of years. 

By now, one would think that lenders have figured out the optimal approach to maximize their acquisition strategies and campaigns. The best way to manage all of the data that fuels models. The optimal criteria. The right offer. The ideal way to get your message in front of your target audience. The precise data, analytics, and tech support to make all of this happen.

But that is not what we hear from our lending clients. 

Instead, we hear:

• Our model builds are taking too long

• We are struggling to connect our various datasets

• We need to find new audiences for our offers

• Integrating fresh data into our models is problematic

• Testing scenarios so we can better optimize our models is too complicated

• We are not sure we are reaching consumers that are actively seeking credit

• We have a tough time incorporating in-market results into our models

• We need more advice on how to advance our models

• We rely too much on direct mail

Does any of that sound familiar? How many of those issues are affecting your acquisition strategies and processes?

Management is telling you to speed up your model builds. Bring in more new customers. Better control risk. Get your promotions in-market faster. Beat the competition. That’s a stiff list of goals. But your management is right. 

To stay ahead in this competitive lending landscape, you need to evolve your acquisition approach and up your game. Admit it, your Prescreen and Invitation to Apply (ITA) efforts have room for improvement.

So what can you do? Read on to learn three tips to modernize your Prescreen and ITA. Keep an eye out for the second blog in this series to learn three more tips.

Tip 1:  Ease your prospecting tech pain

Let’s revisit the list of pain points above. A chunk of them are all about efficiency. Is your team struggling with disjointed data sets? Do your prospecting efforts rely on multiple platforms? How easy is it to combine, access, and analyze the data that fuels your models? Is your data the most recent available? Once you are ready to apply your models in-market, can you quickly move to deployment? How much do you rely on IT or third-parties for help? Are you cringing yet?

There is also the challenge of efficiently integrating new data into your analytics. In fact, there are all kinds of alternative datasets that could have a significant impact on your model performance. (We will explore that in Tip 2!). How easy would it be to add an entirely new dataset into your analytics and explore what impact it might have on your acquisition efforts? If you can’t do this in a speedy fashion, then your models might be less effective than those of your competitors. 

There is a solution to all of these challenges. Ignite for Prospecting, the cloud-based analytical platform gives you one place to compile, connect, access, and analyze all of the data that fuels your models. 

Just imagine, one unified platform that does it all. Upload all of your data, and combine it with Equifax and third party data. Let the system connect and link all of the data so you get a single, consolidated view of each consumer. Dive into your analysis. Optimize your models. And boom, you are ready for deployment to your production platforms.

Obviously this could be a big change from your existing processes. But it is worth it. You could gain up to five times faster processing power. And reduce time to offer delivery by up to 60% or more. And, you can truly take ownership of your acquisition processes.

Tip 2: Go beyond credit and explore more data

Let me introduce you to my (fictional) friend Joe. Joe moved to the United States about 5 years ago. He has a full-time job, rents a house, and does not have any credit cards. Joe does not have much of a typical credit history and has no recorded debt. He did honorably pay off a short-term loan from a specialty lender one time when he first moved to the U.S. How would your acquisition model categorize Joe? Is he a good candidate for your loan offer?

This scenario is a good example of why credit marketers should consider incorporating more data into their acquisition models. This holds true for both Prescreen and ITA models. If your firm is relying on a credit-based model, then you may be missing out on additional factors that could provide you with a broader view of a consumer’s finances and eligibility for your offers. 

For example, if Joe’s likely income and spending is very high, that might boost his eligibility for your offers. If Joe pays his cell phone bill and electric bill on time, that might also add to his creditworthiness. He also has a bank account that shows regular paychecks and consistent bill payments. Joe demonstrated that he paid off a short-term loan from a specialty lender according to the terms, but that might only be known by analyzing specialty finance data. This likely would not show on Joe’s credit report. 

Thus the need for more data. Lenders can use consumer financial data to enhance segmentation. and Then lenders can integrate multiple alternative credit datasets into models with just a single score. With this extra knowledge, lenders can:

• Identify untapped opportunities: Among consumers with a 580 credit score, 10% have household assets over $400,000 or total income over $178,000

• Expand your marketable audience: 18% of thin/invisible consumers could qualify for prime/near prime offers by using alternative data 

Tip 3: Boost analytics and test more scenarios

As marketers, we know that testing is critical. In fact, my friend was recently telling me about an entrepreneur that spent years testing various product pitches, pricing models, and promotional offers in just three local markets before expanding more broadly.

But lenders don’t have years to understand how dozens or even hundreds of variations of possible acquisition models might perform in-market. 

Lucky enough for lenders, there is now a way to efficiently explore and test endless variables and model scenarios. With our prospecting platform, analysts can test scenarios against virtually 100% of the U.S. credit population to answer tough questions such as:

• How will changing criteria likely impact response rates and conversion rates?

• Which variables most impact likely future delinquencies?

• Which additional datasets could most enhance model performance and bring in more new customers?

• How will changing offer terms likely impact campaign results?

If you are building a new model, this could shorten your analytics time to weeks instead of months. You can experiment with what-if, champion-challenger, reject inferencing, and more to identify the ideal criteria for your campaigns. At the same time, you can explore how consumer financial and alternative credit data might impact your target audience selection.  

Plus, you don’t have to start all over once you get results from current in-market campaigns. Instead, you can quickly integrate those learnings into existing models and continue with your campaign. For example, you might discover that tweaking score parameters by just a small amount in your existing campaign could increase conversions while holding risk steady. 

Let’s circle back to Tip 1 for a minute regarding your existing acquisition processes. If you are already using an existing cloud platform to access data for your models, then have no fear. You can access and explore all of the same data that is available in our prospecting platform - credit data, financial data, alternative data - via the delivery channel that you are already using.

To recap, it’s time to modernize your prospecting. Stay-tuned for Part 2 in this series to learn more tips to advance your lending acquisition models, expand your marketable audience, and get your offers in-market faster. Get a sneak peek of all 6 tips with our ebook.