In their customer acquisition campaigns, consumer lenders and card marketers depend primarily on credit bureau (prescreen) data to drive their marketing. But surprisingly, despite the improvement in mobile connectivity and the greater convenience of digital customer experiences, both fintechs and traditional banks still rely on direct mail, rather than digital media, to execute prescreen (or preapproved) campaigns.
In 2018, across all consumer lending and card direct-mail offers, 6.2 billion mail pieces were preapproved, according to Comperemedia, an increase of approximately 11% over 2017.
Banks and credit unions have had some early success with digital prescreen when making preapproved offers to existing customers while they were logged into their online banking account. While a page is loading in an online banking application, a lookup can be executed against a prescreen list, and the best preapproved offer can be returned in a text or banner ad.
The key compliance element that allows for this prescreen ad is the fact that the customer is already authenticated through the online banking login. This assures that the preapproved offer is made to the right person. This is much like the way banks use preapproved offers to customers while making routine transactions at a branch.
How Digital Prescreen Can Improve Prospecting
Building on this approach, it is not hard to see how digital prescreen offers can be adapted to prospecting, with the addressability of paid social and display. Prescreen offers in digital rely on the ability to sync 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 with no preceding offer in direct mail or email, but instead with a message indicating “You may be preapproved.” The ad recipient is then directed to a site for identity verification and matched to a prescreen list. If there is a match, the individual is presented with a preapproved offer containing appropriate disclosures. If there is no match, the consumer can be directed to product information or an online application process.
While many lenders have explored digital prescreen approaches for prospecting, most have not dedicated the resources or the required testing iterations to make it successful. The success of direct mail and the need to meet short-term marketing goals has resulted in limited marketing budget available for digital prescreen testing.
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4 Arguments in Support of Expanded Use of Digital Prescreening
Despite the lack of concerted effort to date, there is clear rationale to support how digital prescreen can improve customer experience and marketing performance.
1. Digital offers allow consumers to connect directly to products and services offered by financial institutions. There are great opportunities to personalize the experience based on the consumer’s credit and financial situation. For instance, a lender could promote a streamlined preapproved process and an accelerated loan funding cycle for high credit-quality consumers. This provides clear benefits to the consumer, who can benefit from the reduced information requirements of a preapproved process.
2. Increase exposure to your best audiences. Consumers are spending on average six hours a day with digital media, according to eMarketer. Adding digital media to the mix will increase exposure to a lender’s best audience and provide options for media optimization across direct mail and digital. While the product offer must be the same across direct mail and digital for compliance reasons, the messaging can be aligned, adjusted or sequenced to provide the consumer with additional information and context.
3. Reach new audiences. Digital marketing cost per impression has a lower starting point than direct mail and can be used to reach new audiences that are either too costly to acquire otherwise or more responsive to digital media than direct mail. Start by testing available prospects just below your direct mail breakeven levels.
4. Take advantage of additional platform data to improve targeting. Digital prescreen can take advantage of online data provided by audience buying platforms to improve on the targeting and segmentation of initial prescreen lists. While credit data can identify credit eligibility and need for certain products, online data can improve on identifying need, behavior, and context that can provide input on the right product or offer to target a consumer.
Steps Leading to Successful Implementation
For lenders to be successful in building prescreen digital programs, they should consider the following:
- Align with compliance. Get the compliance teams at your company and bureau partner comfortable with the digital prescreen marketing process, from list generation to customer experience. Ensure approval to work across various audience buying platforms, so there is enough scale and variation for testing.
- Build a testing roadmap. We often see one-and-done testing with digital prescreen versus a dedicated plan for testing across all key marketing levers. To make digital prescreen work, you need an extensive and well-thought-out plan focused on driving business outcomes. Develop a testing plan that encompasses all marketing levers including audience, creative segmentation, customer experience, and various publishers and audience buying platforms.
- Build media-specific targeting tools. To find those segments that are less responsive to direct mail and more responsive to digital, you need to employ media-specific targeting tools. Initially, it is good to start your audience plan with direct mail response models. However, to get the full impact of digital marketing, you must build models from digital responders.
There are significant opportunities in digital prescreen, but it requires a concerted effort. Lenders that dedicate adequate resources and stay the course through the testing period should be rewarded.