Using Credit Data to Improve Direct Marketing Performance
Using Credit Data to Improve Direct Marketing Performance
Now, how did they know that your current auto lease was just about to expire? Or, that you were searching for a new credit card to transfer balances from your old card—the card that was charging you an arm and a leg in interest?
It’s pretty simple, actually. Financial services marketers have the ability to access consumer credit reports, and present marketing offers to the people they believe will most need them.
Just think about the information on your own credit report. It lists the various loans you have along with any associated balances on the accounts. It also contains the types of credit cards you carry. It reports on when you took a car loan, and which company you used for financing. Your mortgage (and monthly payments) are known. Whether you’ve had late payments or even if there’s a bankruptcy on file is included on your credit report.
Direct Marketing Idea: Consider Testing Credit Pre-screen Services
The wealth of credit information is critical to marketers. You can understand if a consumer needs your product/service. Further, you’ll know (based on other commitments and payment history) if they’ll be inclined to pay you. And, there are literally hundreds of credit attributes available to be mined and maximized in your targeting efforts.
The use of credit data can lessen the risk that your firm takes on in direct marketing campaigns. If you utilize it today, you know it makes your CFO happy that you are effectively managing the risk of your customer portfolio as you continue to bring on new clients.
As marketers, we want to reach as many people as possible; we want high response rates. However, it’s key to keep approval rates high, too. The secret is finding that appropriate middle ground – where you are taking on some risk but still building your overall profitability.
So, what’s the catch? Why aren’t all direct marketers using this valuable source of data?
The answer: Most marketers are regulated against using credit data. There’s an act called the Fair Credit Reporting Act (FCRA) that limits marketers’ access to consumer credit data. While the following provides an overview of legal requirements, for complete information, we urge you to visit the Federal Trade Commission’s website: www.ftc.gov/credit.
FCRA: An Overview
Here’s the biggest requirement: Users of credit data must have a “Permissable Purpose”. For marketing programs, this means that the marketer must extend a valid (called “firm”) offer of credit to the consumer. In other words, if you are using consumer credit data to understand if you should make an offer to a specific individual, you then have to move forward and extend that offer. The marketer/lender is obligated to make good on its offer of a loan, credit card or other financial product, once they have been privy to an individual’s credit information.
This article has just scratched the surface of how to use consumer credit data in direct marketing programs. But, if you’re a financial marketer of consumer products, you definitely should explore working with consumer credit data. Yes, the legislation is complicated, and yes, the contracts process is grueling. However, the data is valuable. You can target your market with pinpoint precision, reaching those consumers most in need of your specific product or service.
Using Credit Data to Improve Direct Marketing Performance - To learn more about this author, visit Nancy Arter's Website.
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We’ve all received them—those credit card offers shouting: You’re “Pre-Approved” for this fabulous, low-interest card! Or, how about those mailings from your local auto dealership telling you to come on in and walk out with the new car that you’re “pre-qualified” for?
Now, how did they know that your current auto lease was just about to expire? Or, that you were searching for a new credit card to transfer balances from your old card—the card that was charging you an arm and a leg in interest?
It’s pretty simple, actually. Financial services marketers have the ability to access consumer credit reports, and present marketing offers to the people they believe will most need them.
Just think about the information on your own credit report. It lists the various loans you have along with any associated balances on the accounts. It also contains the types of credit cards you carry. It reports on when you took a car loan, and which company you used for financing. Your mortgage (and monthly payments) are known. Whether you’ve had late payments or even if there’s a bankruptcy on file is included on your credit report.
Direct Marketing Idea: Consider Testing Credit Pre-screen Services
The wealth of credit information is critical to marketers. You can understand if a consumer needs your product/service. Further, you’ll know (based on other commitments and payment history) if they’ll be inclined to pay you. And, there are literally hundreds of credit attributes available to be mined and maximized in your targeting efforts.
The use of credit data can lessen the risk that your firm takes on in direct marketing campaigns. If you utilize it today, you know it makes your CFO happy that you are effectively managing the risk of your customer portfolio as you continue to bring on new clients.
As marketers, we want to reach as many people as possible; we want high response rates. However, it’s key to keep approval rates high, too. The secret is finding that appropriate middle ground – where you are taking on some risk but still building your overall profitability.
So, what’s the catch? Why aren’t all direct marketers using this valuable source of data?
The answer: Most marketers are regulated against using credit data. There’s an act called the Fair Credit Reporting Act (FCRA) that limits marketers’ access to consumer credit data. While the following provides an overview of legal requirements, for complete information, we urge you to visit the Federal Trade Commission’s website: www.ftc.gov/credit.
FCRA: An Overview
Here’s the biggest requirement: Users of credit data must have a “Permissable Purpose”. For marketing programs, this means that the marketer must extend a valid (called “firm”) offer of credit to the consumer. In other words, if you are using consumer credit data to understand if you should make an offer to a specific individual, you then have to move forward and extend that offer. The marketer/lender is obligated to make good on its offer of a loan, credit card or other financial product, once they have been privy to an individual’s credit information.
This article has just scratched the surface of how to use consumer credit data in direct marketing programs. But, if you’re a financial marketer of consumer products, you definitely should explore working with consumer credit data. Yes, the legislation is complicated, and yes, the contracts process is grueling. However, the data is valuable. You can target your market with pinpoint precision, reaching those consumers most in need of your specific product or service.
Using Credit Data to Improve Direct Marketing Performance - To learn more about this author, visit Nancy Arter's Website.
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George LudwigGeorge Ludwig is a recognized authority on sales strategy and peak performance psychology. An international speaker, trainer, and corporate consultant, he helps clients like Johnson & Johnson, Abbott Laboratories, Northwestern Mutual, CIGNA, and numerous others improve sales force effectiveness and performance. Though it's George's strategies and processes that help corporations increase productivity and performance, it's his tremendous energy and dynamism that spark the transformation. Again and again, clients remark on his amazing ability to unleash human capacity and inspire men and women to break out of their comfort zones. The result is a whole new type of salesperson. His customized presentations teach achievers to make stunning advances in their lives. From helping salespeople realize cherished dreams to helping corporations exponentially accelerate revenue streams, George Ludwig leaves audiences and individuals empowered, emboldened, and clamoring for more. George is the best-selling author of Power Selling: Seven Strategies for Cracking the Sales Code and Wise Moves: 60 Quick Tips to Improve Your Position in Life & Business. - Visit George Ludwig's Website |
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Stephanie RobeyStephanie Robey is President and CoFounder of Pivot Positive, LLC - an Internet marketing business focused on helping people start work at home ventures. Previously, she was employed at The Search Agency with over 20 years experience in graphic design and 10 years experience in online marketing. She was responsible for launching the Conversion Path Optimization (CPO) unit where she and her team have conducted hundreds of optimization tests for online companies across multiple verticals. She is a successful entrepreneur having started and sold 2 companies and remains on the board of directors of the third, PhotoSpin.com Stephanie began her career in the direct marketing realm creating and producing direct mail for many of the major cable television companies and directly attributes her understanding of Internet marketing to those early offline experiences. Stephanie is a graduate of San Diego State University with a BFA in Graphic Arts and also holds an Executive MBA from the Graziadio School of Business and Management at Pepperdine University. Read Steph's Blog Meet Steph and Dave Sign up for our Free 7-Day BootCamp: Self Employed & Rich - Visit Stephanie Robey's Website |
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
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Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
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Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Jeff FosterWebBizIdeas.com is a Minneapolis website design company founded to help people start an internet business by providing them with website, business, and internet resources that help foster the growth of successful online businesses and develop innovative Internet business ideas. We specialize in internet consulting & internet marketing. - Visit Jeff Foster's Website |
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