In their customer acquisition campaigns, consumer lenders and card marketers primarily rely on credit bureau data (screening) to drive their marketing. But surprisingly, despite improved mobile connectivity and greater convenience in digital customer experiences, traditional fintechs and banks still rely on direct mail, rather than digital media, to run prescreen campaigns (or pre-approved).
In 2018, out of all consumer loan and card direct mail offerings, 6.2 billion pieces of mail were pre-approved, according to Comperemedia, an increase of about 11% from 2017.
Banks and credit unions had early success with digital prescreening when presenting pre-approved offers to existing customers while they were logged into their online bank account. While loading a page in an online banking app, a search can be run on a shortlist and the best pre-approved deal can be returned in a text or banner ad.
The key compliance element that enables this prequalification announcement is the fact that the customer is already authenticated through the online banking connection. This ensures that the pre-approved offer is made to the right person. This is very similar to how banks use pre-approved offers to customers during routine branch transactions.
How Digital Prescreen can improve prospecting
Based on this approach, it is not difficult to see how digital prequalification offers can be adapted to prospecting, with the addressability of paid social and display. Prescreen’s digital offerings rely on the ability to synchronize cookies with PII (Personally Identifiable Information) and to authenticate consumers to ensure the ad is delivered to the right person.
The digital ad is made without any previous offers in the direct mail or email, but with a message that says “You may be pre-approved.” The recipient of the ad is then directed to a site for identity verification and matched with a shortlist. If there is a match, the person receives a pre-approved offer containing the appropriate information. If there is no match, the consumer may be directed to product information or an online application process.
While many lenders have explored digital screening approaches for prospecting, most have not dedicated the resources or testing iterations necessary to be successful. The success of direct mail and the need to meet short-term marketing goals have resulted in a limited marketing budget available for digital prescreen testing.
4 Arguments in favor of a wider use of digital preselection
Despite the lack of concerted efforts to date, there is a clear rationale to support how digital prescreening can improve customer experience and marketing performance.
1. Digital offerings allow consumers to connect directly to products and services offered by financial institutions. There are great opportunities to tailor the experience to suit the consumer’s credit and financial situation. For example, a lender could promote a streamlined pre-approved process and accelerated loan funding cycle for consumers with high credit quality. This has clear benefits for the consumer, who can benefit from the reduced information needs of a pre-approved process.
2. Increase the visibility of your best audiences. Consumers spend an average of six hours a day with digital media, according to eMarketer. Adding digital media to the mix will increase a lender’s best audience exposure and provide options for media optimization in direct mail and digital. While the product offering should be the same in direct mail and digital for compliance reasons, messaging can be aligned, adjusted, or sequenced to provide the consumer with additional information and context.
3. Reach new audiences. The cost per impression of digital marketing has a lower starting point than direct mail and can be used to reach new audiences that are either too expensive to acquire otherwise or more responsive to digital media than direct mail. Start by testing the leads available just below your direct mail break-even point.
4. Leverage additional platform data to improve targeting. Digital prescreening can leverage online data provided by audience buying platforms to improve targeting and segmentation of initial prescreening lists. While credit data can identify credit eligibility and need for certain products, online data can improve identification of need, behavior, and context that can provide information about the right product or offering. to target a consumer.
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Steps leading to a successful implementation
In order for lenders to be successful in creating digital screening programs, they need to consider the following:
- Align with compliance. Put your business and partner office compliance teams at ease with the digital marketing prescreening process, from list generation to customer experience. Ensure approval to work on different audience buying platforms, so that there is enough scale and variation for testing.
- Build a test roadmap. We often see one-off tests with digital pre-screen versus a dedicated test plan on all key marketing levers. For digital screening to work, you need a comprehensive, well-thought-out plan with a focus on business results. Develop a test plan that encompasses all marketing levers including audience, creative segmentation, customer experience and various publishers and audience buying platforms.
- Create media specific targeting tools. To find segments that are less direct mail responsive and more digitally responsive, you need to use media-specific targeting tools. It’s a good idea to start your audience plan with direct mail response templates at the start. However, to get the full impact from digital marketing, you need to build models out of digital responders.
There are significant opportunities in digital preselection, but it requires a concerted effort. Lenders who devote adequate resources and stay the course throughout the testing period should be rewarded.