By Devon Kinkead

Introduction

In the world of prescreen marketing, success is often measured by conversion rates. However, focusing solely on conversion rates can provide a misleading picture of a campaign’s effectiveness. The true measure of success is not how many leads a campaign converts but how well it performs against competitors in capturing market share. A recent personal loan campaign serves as a prime example of why the win-rate against competitors is the most critical performance indicator.

The Reality Behind Conversion Rates

A Micronotes’ client’s recent new accountholder personal loan acquisition campaign distributed 15,000 firm offers of credit, resulting in 24 funded loans totaling $372,000. This equates to a conversion rate of just 0.16%. While this number might seem low, the true challenge lies in the fact that competitors secured 155 loans from the exact same audience, totaling $3MM. These figures highlight the need to shift the focus from conversion rate to the campaign’s competitive performance.

Understanding Win Rate: A Competitive Perspective

Win rate measures the share of the market captured relative to the competition. In the case of the referenced campaign, the 24 acquired loans represent only 13% of total funded loans from firm offer recipients, significantly below the benchmark set by our highest performing clients of 23%. This gap underscores the importance of enhancing strategic efforts to outperform competitors.

Key Insights from the Campaign

1. Competitive Loan Rates Matter:
   • The average offered rate for acquired loans was 13.5%, while lost loans averaged 13.4%. Although the difference appears minor, further analysis revealed that competitors offered significantly lower rates to higher FICO score borrowers, resulting in lost opportunities in micro credit cells.
2. Loan Amounts Influence Decisions:
   • The average funded loan size was $15,493, compared to the average lost loan size of $19,420. This suggests that competitors are successfully capturing demand for higher loan amounts, an area we can optimize.
3. Geographic Performance Highlights Opportunities:
   • One city showed strong performance with 4 funded loans, whereas another city had 14 lost loans totaling $292,778 with zero acquisitions. This reveals important geographic differences in competitiveness.

Boosting Win Rate

1. Refining Rate Tiers:
   • Introduce more competitive pricing for high-FICO segments to capture prime borrowers who are currently choosing lower-rate competitors.
2. Expanding Loan Size Offerings:
   • Align loan offerings with market demand by increasing loan limits to match competitor offerings and borrower expectations.
3. Targeted Marketing Strategies:
   • Concentrate efforts on high-potential suburban areas and high-loss urban centers with incentives.
4. Incentive Programs:
   • Introduce cashback or rate discount incentives to attract borrowers who are price-sensitive and value additional perks.

Conclusion

The campaign data highlights a crucial lesson: success is not just about conversions, it’s about outperforming the competition. By focusing on improving win rates through competitive pricing, tailored loan offerings, and strategic marketing efforts, financial institutions can capture a larger share of the market and achieve sustainable growth. In today’s competitive landscape, the ultimate goal should always be to win more business than the competition, not just convert an comparatively arbitrary number of firm offers sent into loans. Connect with us today to get your competitive context right!

By Devon Kinkead

The financial services sector faces constant pressure to adapt, innovate, and keep customers engaged. But how do you not only attract new customers but also ensure they stay loyal in an increasingly competitive landscape?

During our recent Gain and Retain webinar, we unpacked actionable insights to tackle this challenge, weaving technology, personalization, and strategy into a framework for success. Let’s break it down.

Deposits Are More Elusive Than Ever

Financial institutions are grappling with two critical issues: attracting new customers and keeping the ones they already have. In today’s environment, consumer expectations for personalized services are high, yet loyalty remains fragile. Bank data reveals that more than 50% of large deposits are withdrawn within 90 days without proactive engagement​.

How can banks and credit unions close the gap between their services and what customers need during pivotal life moments?

Partnering for Smarter Solutions

Micronotes has stepped up with innovative tools designed to address these challenges head-on. By leveraging vast data sets, predictive analytics, and hyper-personalized outreach, Micronotes helps financial institutions anticipate customer needs and deliver tailored solutions right when they matter most.

For example, Micronotes’ Accountholder Retention solution uses machine learning to identify at-risk customers and initiate automated, meaningful conversations within mobile banking apps​. Similarly, Prescreen Acquire deploys hyper-personalized prescreen campaigns to connect with creditworthy prospects and accountholders using geotargeting and 230MM consumer credit records, updated weekly​. Exceptional Deposits identifies unusually large deposits and immediately reaches out to depositors through the digital banking channels to offer help during major life events.

Engage at Scale with Personalization

1. Understand Your Customers’ Moments That Matter
   Life events like buying a home, consolidating debt, or receiving a windfall are critical opportunities to build trust. Micronotes identifies these moments through its Exceptional Deposits program, which flags large deposits and automatically connects accountholders with relevant services​.
2. Turn Data into Actionable Insights
   By analyzing millions of data points, Micronotes’ tools predict accountholder behaviors and needs, enabling financial institutions to act proactively, not reactively. Whether it’s cross-selling products, retaining an accountholder ready to leave, or acquiring new creditworthy accountholders, the results are transformative.
3. Scale Conversations Without Losing the Personal Touch
   Traditional marketing may start one conversation at a time. Micronotes’ Cross-Sell achieves 26x the click-through rate of banner ads by engaging accountholders in interactive dialogues tailored to their specific situations​.

Real Results, Real Growth

Micronotes customers are already reaping the rewards of Micronotes’ gain and retain approach, from acquiring new accountholders at a profit, to expanding wallet share, to retaining depositors and their deposits. It’s a powerful combination.

Step Into the Future of Banking

2025 is the year to stop losing opportunities to competitors with outdated systems and thinking. Let Micronotes help you gain new customers and retain the ones who already trust you.

By Devon Kinkead

Personal loans and HELOCs (Home Equity Line of Credit) play unique roles in consolidating debt to lower borrowing costs. Through an analysis of recent data on Direct and Indirect Sales across different financially personalized firm offers of credit, an interesting pattern emerges: personal loan consolidation offers overwhelmingly result in direct loans, whereas HELOC offers often lead to indirect loans. This blog will explore the reasons behind this trend, provide insight into offer strategy, and explain what it means for financial institutions.

Direct vs. Indirect Sales: Definition

Let’s first define terms:

• Direct Sales: These occur when a loan matches the type of loan offered to the credit-qualified consumer. For example, if a consumer is offered a personal loan and they accept and secure that exact loan, it counts as a direct sale.
• Indirect Sales: These happen when the loan does not match the original offer made to the consumer, despite them being credit-qualified for the initial offer. In this case, the consumer is offered one loan type but ultimately secures a different loan product, leading to an indirect sale.

Figure 1 – Septermber 2024 Micronotes sales attribution data, relationship between offer name and direct vs. indirect loan booked ($)

The Comparison: Personal Loans vs. HELOCs

In the dataset analyzed, personal loan consolidation offers, such as PCL (Personal Consolidation Loan), almost exclusively result in Direct Sales. Out of 402 total personal loan consolidations, nearly all are direct except 14, or 3%.

Conversely, HELOC offers, such as HELOC Consolidation and HELOC Traditional, show a different pattern. For example, in the HELOC Traditional offer, there are 11 direct sales but 22 indirect sales, meaning more consumers who received HELOC offers ended up securing a different loan product.

Why Do Personal Loan Consolidation Offers Result in Direct Loans?

1. Simplicity and Familiarity: Personal loans are straightforward financial products. Consumers understand that a personal loan is a fixed amount with a predictable interest rate and repayment schedule. Since the offer clearly aligns with their needs, credit-qualified consumers typically accept it without exploring alternatives, leading to a direct sale.
2. Tailored to Immediate Needs: Personal loan consolidation offers are highly targeted, focusing on consumers looking to consolidate multiple debts or pay off high-interest credit card debt. Because the product directly addresses the consumer’s immediate financial concerns, they are more likely to accept the offer as-is.
3. Urgency of Debt Consolidation: Consumers seeking personal loan consolidation are often under pressure to resolve their debt quickly. A personal loan provides a direct, efficient solution to consolidate debt and lower borrowing costs, which aligns well with their need for quick relief leading to a direct sale.

Why Do HELOC Offers Often Result in Indirect Loans?

1. Complexity of Home Equity Products: HELOCs are more complicated than personal loans. These products involve leveraging home equity, often with variable interest rates, which introduces more risk and complexity. As a result, consumers may start by considering a HELOC but then explore different financial options, leading to an indirect sale.
2. Consumer Preferences for Simpler Products: Although all consumers in this dataset were pre-qualified for the HELOC offers they received, many still opted for a different loan product. This may occur because other products, like a home equity loan or cash-out refinance, may feel like a safer or simpler choice. Ultimately, even though they were credit-qualified for the HELOC, consumers often choose a product that better aligns with their financial comfort level.
3. Loan Switching: After reviewing the terms and complexities of a HELOC, some consumers may realize that a different product, such as a fixed-rate home equity loan, might better meet their needs, particularly if they prefer a predictable payment structure. This switch from the original offer results in an indirect sale.

Implications for Offer Strategy

Given these observations, financial institutions can refine their strategies for both personal loan and HELOC offers to increase the likelihood of direct sales, an measure of product offer fit, and better serve their customers, members, and prospects.

For Personal Loan Consolidation Offers:

• Maintain Simplicity and Targeting: The success of personal loan consolidation offers in achieving direct sales lies in their simplicity and precise targeting. Financial institutions should continue to focus on clear, easy-to-understand offers that address specific consumer needs like debt consolidation to lower borrowing costs.
• Streamline the Application Process: Ensuring a seamless, user-friendly application process can help maintain the high rate of direct conversions. Offering tools like instant approval for prescreened offers could further increase consumer confidence in accepting the offer directly.

For HELOC Offers:

• Provide Upfront Education: Since HELOCs are more complex, providing consumers with clear, easy-to-understand information about the product’s benefits and potential risks can increase the number of direct sales. Educating consumers on when a HELOC is the right choice can yield more direct conversions.
• Offer Alternative Home Equity Products: Given that many consumers who are offered a HELOC end up with a different product, lenders can benefit from bundling HELOC offers with other home equity options, such as a home equity loan or cash-out refinance. By presenting these alternatives upfront, institutions can meet consumer needs without driving them to intermediaries.

Personalization of Offers: As the data shows, consumers often opt for a loan type that fits their immediate needs and financial comfort. Financial institutions should use advanced data analytics to personalize offers, ensuring that each product offered resonates with the specific financial situation of the consumer. This strategy improves conversion rates for both direct and indirect sales.

Figure 2 – Example of financial personalization in a firm offer of credit.

Conclusion: Different Products, Different Sales Journeys

The contrast between personal loan consolidation and HELOC offers reveals the differing levels of consumer understanding and comfort with these financial products. Personal loan consolidation offers are simple, targeted, and address immediate needs, resulting in a comparatively high rate of direct sales. In contrast, HELOCs, with their complexity and reliance on home equity, often lead consumers to explore other options, driving up indirect sales.

For consumers, the key takeaway is to carefully assess the offers they receive, ensuring that the product they choose fits their long-term financial goals. For lenders, understanding these trends can help optimize their offer strategies. By refining how they present HELOC and personal loan products, financial institutions can increase both direct and indirect sales while better serving their customers, members, and prospects.

Ultimately, a more tailored, flexible, and educational approach to prescreen marketing will lead to greater consumer satisfaction and more effective loan conversions.

By Devon Kinkead

Vertically-integrated automated prescreen marketing systems are finding their way into community banking with obvious, and not so obvious returns. A review of 20 campaigns Micronotes’ customers ran reveals that 68% of the loan volume is in indirect sales; that is — an existing or prospective accountholder was offered one loan, like a HELOC, but originated a different loan, like a mortgage. Given the sheer volume of indirect loans, they represent an important but overlooked component of the return on investment analysis.

Direct Versus Indirect Sales

Direct Sales: These are the sales directly attributed to the prescreen marketing campaign. For example, a prescreen offer for a HELOC consolidation loan was made to a prospect on February 1st, 2024 and a HELOC loan was originated on February 24, 2024.

Indirect Sales: These are the sales indirectly attributed to the prescreen marketing campaign. For example, a prescreen offer for a HELOC consolidation loan was made to a prospect on February 1st, 2024 and a mortgage was originated on April 24, 2024.

Key Data Insights

Figure 1 – Direct vs. Indirect closed loan volume across different offer types. Note: no data for rent-to-own because this was a small scale test campaign.

Indirect sales vary by offer type, with indirect sales materially exceeding direct sales in HELOCs and auto loan refinancing and entirely absent in auto lease-to-own and HELOAN consolidation. Personal loan offers show relatively few indirect sales while mortgages show a significant fraction of indirect sales.

Summarily, return on investment computations must included indirect sales to accurately reflect the real net interest income generated by a prescreen loan campaign, particularly with HELOCs, auto loan refinance, and mortgages.

Conclusion

Understanding the real benefit of automated prescreen marketing requires a comprehensive dataset, excellent analytics, and a good working knowledge of probabilities. Micronotes has developed a vertically-integrated automated prescreen marketing tool that enables community financial institutions to launch campaigns and comprehensively measure the return on campaigns and understand the unique characteristics of each prescreen offer type. Armed with this knowledge, Micronotes’ customers continue to invest wisely to acquire new borrowers and expand wallet share with existing accountholders.

By Devon Kinkead

As we navigate the complexities of the economic landscape in 2024, understanding consumer credit trends is paramount for financial institutions, policymakers, and consumers alike. A recent presentation by Andrew Robbins, a Solution Consultant at Experian at the June 2024 Micronotes Gain and Retail Forum, offers a comprehensive overview of these trends and their implications. Here, we delve into the key insights from this presentation.

Economic Update

Despite a slowdown in the first quarter of 2024, the overall economic outlook remains robust, with a forecasted growth of 2% for the year. The Bureau of Economic Analysis and Experian’s Macroeconomic Scenarios Report highlight that underlying demand measures are strong, indicating resilience in the economy.

Job Market and Inflation:

• Job Creation: After a dip in April, job creation rebounded in May, maintaining a solid labor market with minimal projected increases in unemployment.
• Inflation: Although inflation remains a challenge, with the Consumer Price Index showing stubbornly high rates, there is an expectation of a rate cut by the Federal Reserve in late 2024 and several more in 2025.

Consumer Behavior:

• Savings and Spending: Consumers have depleted some of their pandemic savings but still have substantial net worth and manageable debt burdens. This suggests room for continued spending, which is crucial for economic stability.

Consumer Credit Trends

The presentation provides a detailed analysis of various aspects of consumer credit, underscoring significant trends and their implications.

Credit Card Balances and Scores:

• Balances: Credit card balances have surged by nearly 12% over the past two years, with non-mortgage balances rising by over 11%. This indicates increased consumer reliance on credit for purchases.
• Credit Scores: The average credit score remains relatively stable, but there are slight year-over-year variations.

Generation-Specific Insights:

• Gen Z: This generation has shown a notable increase in credit card spending, especially during the holiday season. Their card balances and usage patterns are becoming a significant factor in the overall credit landscape.

Account Balances and Delinquencies:

• Total Balances: There has been a steady increase in total account balances, despite the number of accounts remaining constant. This suggests higher spending or borrowing per account.
• Delinquencies: Delinquencies have risen slightly, with balances 30+ days past due increasing by 70 basis points over two years.

Hard Inquiries:

• Trends: Hard inquiries for credit have decreased overall compared to the previous five years, particularly in mortgage and bankcard sectors. However, there has been an uptick in personal loan and auto loan inquiries in 2024 compared to the previous year.

Prescreen vs. ITA Campaigns

The presentation also touches on marketing strategies, specifically the use of prescreening versus Invitation to Apply (ITA) campaigns in direct mail marketing. There has been a strategic shift towards ITA campaigns due to their cost-effectiveness and alignment with current economic conditions and budgetary constraints.

Direct Mail Volume:

• Trends: Although there was a slight decrease in overall direct mail volume in recent months, Prescreen mail volumes remain at about 400MM per month while ITAs hover around 150MM per month.

Conclusion

The insights from Experian’s presentation provide a valuable snapshot of the current state of consumer credit in the United States. Despite economic challenges, consumers continue to spend, albeit with increasing reliance on credit. Financial institutions must navigate these trends carefully, balancing growth opportunities with the risks associated with higher consumer debt levels. Understanding these dynamics is crucial for making informed decisions in today’s complex financial landscape.

By  Xav Harrigin-Ramoutar and Devon Kinkead

Over the past two years, many financial institutions have faced significant cuts in their marketing departments. These reductions have left them struggling to execute effective prescreen marketing campaigns. However, Micronotes offers a solution: a fully automated prescreen marketing service that can fill the gap and expand marketing capacity.

Effective Credit Marketing Strategies: Lessons from Successful Lending Campaigns

For today’s financial institutions, credit marketing is indispensable for expanding their accountholder base and enhancing loyalty via wallet share expansion. It drives revenue growth, strengthens customer relationships, and boosts satisfaction. Advanced technologies and the increasing availability of customer data enable financial institutions to deliver personalized and timely credit offers, meeting specific customer needs and preferences.

Data-Driven Personalization in Credit Marketing

Personalized Loan Offers Through Advanced Data Integration

Community financial institutions partner with Micronotes to enhance their credit marketing efforts by utilizing comprehensive accountholder data and Experian’s extensive credit database. This collaboration delivers personalized loan offers through always-on credit marketing, ensuring customers receive relevant and timely financial solutions. The campaigns leverage the institution’s existing accountholder data combined with Experian’s credit records, which include approximately 230 million consumer credit profiles updated weekly. This data integration provides a deep understanding of accountholders’ financial situations, enabling highly personalized loan offers.

By implementing an always-on credit marketing strategy, institutions continuously deliver personalized credit offers, ensuring ongoing marketing efforts that increased new and existing accountholder engagement and conversion. These campaigns significantly boost loan and deposit business as customers responded positively to the financially personalized offers, leading to higher engagement rates and improved customer satisfaction. Consequently, institutions expand wallet share by providing relevant and timely credit solutions tailored to individual needs.

Enhancing Cross-Selling with Microinterview Technology

In other successful campaigns, financial institutions utilize Micronotes’ microinterview technology to enhance the cross-selling efforts. This approach involves brief, targeted interactions within digital banking channels to engage customers and present relevant product offers and reminders of offers made, conversationally. The microinterview technology enables short, focused interactions with accountholders, quickly capturing their interests and needs, and allowing the institution to effectively present personalized product offers. By analyzing customer data, the institution identified the most relevant products for each customer, significantly increasing the likelihood of successful cross-selling.

Microinterviews typically outperform ads of equivalent size by a factor of 26 so, the significant increase in engagement further drives cross-selling opportunities and improved customer retention. Customers appreciate the personalized approach, leading to stronger relationships and increased loyalty.

Geotargeted Acquisition Campaigns for Market Expansion

Financial institutions also implement geotargeted acquisition campaigns in partnership with Micronotes, leveraging consumer credit records and precise geotargeting to attract new customers in their branch footprint. These campaigns utilize a vast database of consumer credit records to identify creditworthy prospects within targeted geographic regions. By focusing on specific areas, the institutions tailor marketing to areas where brand recognition is highest in the communities they serve. This approach combines automated marketing techniques with comprehensive data analysis to deliver financially personalized and geo-targeted email and direct mail firm offers of credit.

Geotargeted acquisition campaigns achieve high response rates, successfully expanding the institution’s market share in targeted regions. The use of automated prescreen marketing and precise targeting reduces overall marketing costs, making the campaigns more cost-effective and yielding a net negative customer acquisition cost. Financial institutions can assess the near branch loan opportunity by ordering a growth analysis here at no cost.

Conclusion

Prescreen marketing is one of the most effective tools to grow wallet share and expand market share for financial institutions and that effectiveness is proven 400MM times per month in prescreen mail volume. However, prescreen marketing has historically been complex, lacking financial personalization, and labor intensive. That labor is no longer available in the marketing departments of many financial institutions that have been cut over the past 2 years. The introduction of Prescreen-as-a-Service (PaaS) to automate this complex process enables marketers and lenders to hit their numbers with their lean staff.

By Devon Kinkead

The performance of automated prescreen marketing systems is enabling unprecedented ROI measurement and optimization. Here’s what we’ve learned over the past 18-24 months about optimization.

Analyzing Loan Closure Patterns

We began by examining loan closure times, using the offer date as the baseline. Our weekly data revealed an initial spike in weeks 3 to 4, followed by a relatively even distribution of closures over the first seven weeks. By week 17, nearly all loans were closed. Knowledge of this pattern enables financial institutions to better handle the distribution of new customer/member onboarding and loan processing workload and customer engagement over time.

Effective Distribution of Efforts

Our clients have implemented a system where branch managers, lenders, and customer/member service representatives (CSRs/MSRs) call customers/members about money saving firm offers. This collaborative approach ensures a broad effort across the retail side of the financial institution, leveraging local relationships and comfort levels. This distributed effort helps smooth out the workload and keeps customer/member engagement steady.

Direct Mail vs. Digital Channels

Our campaigns have shown that direct mail often outperforms digital means in new customer/member acquisition campaigns. This was evident when an email acquisition campaign initially resulted in zero applications over six weeks. Switching to direct mail transformed it into a highly successful campaign within the next few weeks. This highlights the importance of choosing the right delivery method for the right campaign as prospect behavior can vary significantly based on how they receive information.

Speed and Convenience in Loan Processing

One of our key value propositions is providing speedy and convenient loan processing. Our clients have streamlined their processes to ensure quick centralized underwriting and offer digital means of closing loans. This approach caters to busy customers who prefer not to visit the branch in person, thereby enhancing closure rates from pre-qualified applications.

High Pull-Through Rates

Some of our clients are seeing extremely high campaign pull-through rates, with 95-99% of approved applications resulting in funded loans. This success can be attributed to efficient application and approval processes coupled with thorough initial prescreening.

The Impact of Email Reminders

For digital prescreen campaigns, we observed a 50-50 split between email and direct mail. Timing plays a critical role here, with email recipients receiving offers immediately and mail recipients a week or two later. We’ve found that sending reminder emails every two weeks significantly boosts application rates, aligning with observed application spikes in weeks 2, 4, and 6.

Impressive ROI

Clients have seen substantial, repeatable, and measurable ROIs of over 200%, including cost of funds. This demonstrates the effectiveness of our strategies and the potential for prescreen marketing to drive significant financial returns when executed thoughtfully.

Conclusion

Our optimization underscores the importance of understanding customer behavior, choosing the right communication channels, and ensuring a streamlined, customer-centric loan processing and new customer/member onboarding approach. By continuously refining these elements, financial institutions can maximize their ROI from automated prescreen marketing campaigns, achieving both new and existing accountholder satisfaction and financial success.

By Devon Kinkead

In the competitive financial services landscape, understanding the average days to close a loan is critical for shaping effective prescreen loan marketing strategies. By tailoring marketing efforts based on the closing times of different loan types, financial institutions can significantly increase the number of pre-qualified loan applications and loans. Let’s explore how the data on average days to close a loan can influence marketing strategies.

Understanding the Data

The data on average days to close a loan at one of our clients, following Micronotes-powered prescreen marketing campaigns, is as follows:

Figure 1 – Average days to close a loan following prescreen offer made across 630 loans

It’s puzzling that HELOANs closed faster than HELOCs but, this may be due to a small number of HELOANs that were applied for and processed almost immediately following the issuance of a firm offer of credit.

Impact of Loan Processing Times on Marketing Strategies

Personal and Auto Loans: Quick Turnaround Advantage

With an average closing time of 42 days, personal and auto loans offer a quick turnaround, which is a strong selling point in marketing campaigns. Highlighting the speed and efficiency of these loans can attract prospective qualified borrowers who are seeking rapid access to funds or to lower their borrowing costs. Marketing messages emphasizing fast approval and closing times can drive higher engagement and conversion rates.

Mortgage Loans: Setting Realistic Expectations

Mortgage loans have the longest average closing time at 98 days. Prescreen marketing for mortgages should focus on setting realistic expectations for qualified potential borrowers. Emphasizing the thoroughness of the process, the benefits of taking the time for careful underwriting, and the security of long-term investment can help manage customer expectations. Offering detailed information on the steps involved and providing regular updates can keep applicants engaged throughout the process.

HELOANs: Streamlined Processing

Home Equity Loans, with an average closing time of 41 days, can be marketed as a quick and efficient way to access equity. Similar to personal and auto loans, emphasizing the ease and speed of the application and approval process can attract more applicants. Highlighting the potential uses for HELOAN funds, such as home improvements or debt consolidation, can also enhance the appeal.

HELOCs: Balance of Speed and Flexibility

With an average closing time of 66 days, HELOCs require a balanced marketing approach. Emphasizing the flexibility and ongoing access to funds that a HELOC provides can be a key selling point. Marketing messages should highlight the benefits of having a line of credit available for future needs while also communicating the relatively quick processing time compared to mortgages.

Enhancing Prescreen Loan Marketing Strategies

Targeted Messaging

Tailoring marketing messages based on the average days to close each loan type can significantly impact the effectiveness of prescreen campaigns. For quick-to-close loans like personal, auto, and HELOANs, focus on speed and convenience. For mortgages and HELOCs, emphasize the benefits of the thorough process and the long-term value.

Data-Driven Campaigns

Micronotes processes 230MM credit records per week and delivers completely financially personalized FCRA compliant firm offers of credit to each prescreened customer, member, or prospect as shown below.

Educational Content

Providing educational content about the loan process can build trust and transparency. Detailed guides, FAQs, and step-by-step explanations can demystify the loan process, making potential borrowers more comfortable and confident in their decision to apply.

Multi-Channel Approach

Implementing a multi-channel marketing approach can reach a wider audience. Combining digital marketing, direct mail, and in-branch promotions ensures that the message about the loan’s processing time and benefits reaches potential borrowers through their preferred channels.

Conclusion

The average days to close a loan plays a crucial role in shaping effective prescreen loan marketing strategies. By leveraging this data, financial institutions can craft targeted, financially personalized prescreen marketing campaigns that highlight the strengths of each loan type, ultimately increasing the number of pre-qualified loan applications. In a competitive market, understanding and utilizing loan processing times can be a significant advantage, driving higher engagement and conversion rates while enhancing customer satisfaction.

By Devon Kinkead

Myths often cloud the reality of banking operations when new technologies enter the market. One such myth is the belief that bankers will be overwhelmed by the loan volume generated from prescreen marketing campaigns. However, this misconception doesn’t hold up under scrutiny.

Prescreen Marketing Campaigns

Prescreen marketing campaigns are a proven market share and wallet share growth strategy with an average volume of 400MM prescreen offers mailed per month, or more than one for each adult in the U.S., and an important steady source of revenue for the US Postal Service. These firm offers of credit are used to identify and credit prequalify potential borrowers. These campaigns involve sending financially personalized, FCRA compliant, pre-approved loan offers to individuals who meet specific credit criteria. The goal is to drive prequalified loan applications and increase the institution’s lending portfolio.

The 17-Week Window

A critical aspect of prescreen marketing campaigns that is often overlooked is the extended loan application and processing window. Contrary to the concerns among financial institutions that are new to prescreen marketing, loan applications from these campaigns are not received all at once. Instead, applications and loans are typically spread out over a 17-week period following the initial mailing as shown in figure 1. This reality significantly reduces the potential for overwhelming loan volumes. For example, about the same number of loans are closed in weeks 7-8 as are closed in week 1, or about 7% of the total number of loans closed.

Figure 1 – Loan volume over time following campaign start, $1B community financial institution.

Antiquated Loan Application and Processing Systems

Even financial institutions with antiquated loan application and processing systems can handle an uptick in loan volume over the course of 4+ months from fully qualified borrowers. With 85-90% of applications funded, this is highly productive work.

Conclusion

The notion that bankers can’t handle the loan volume associated with prescreen marketing campaigns is a myth that doesn’t hold up to scrutiny. The 17-week closed loan window combined with good estimates of total expected loan volumes, by type, from the Micronotes Growth Analysis make the leap to automated prescreen marketing for market share and wallet share expansion more like a stair-step.

Prescreen marketing, historically used by large banks, fintechs and credit unions due to its cost and complexity, is now available to all community financial institutions that want to grow market share and wallet share in their operating footprint with steady and manageable loan volume growth.

by Devon Kinkead

Introduction

Community financial institutions, particularly member-owned credit unions, are mission-driven organizations. Moreover, credit unions have a long history of using prescreen marketing to expand wallet share and market share.

The prescreen marketing process is complex and labor intensive involving multiple steps and coordination across multiple vendors including:

1. Buy prescreen list(s)

2. Designing creative with financial personalization

3. Ensure compliance

4. Transfer list and creative to the mail house

5. Track results

6. Determine sales attribution

7. Compute return on investment

8. Repeat

So the question is, once the entire prescreen process is automated, how does that automation further the missions of the institution? Below, I’ve examined the mission statements of several credit unions and how automated prescreen marketing furthers those missions.

Consistent Financial Health Improvement

Credit unions like Hope Credit Union and Peoples Credit Union prioritize improving their members’ financial health. Continuous refinancing of high-interest debt ensures that members consistently benefit from the lowest possible rates, reducing their overall financial burden and freeing up resources for savings and other financial goals. This ongoing support is crucial in maintaining and enhancing financial stability for members.

Building Stronger Relationships

Credit unions such as CommonWealth Credit Union and Synergy Federal Credit Union emphasize building lifelong relationships with their members through personalized services. Continuously monitoring and refinancing debt demonstrates a proactive and caring approach, reinforcing the trust and reliability that are cornerstones of these relationships. This continuous engagement helps members feel valued and supported, fostering long-term loyalty.

Enhanced Community Impact

Credit unions like America First Credit Union and Superior Credit Union aim to play a vital role in their communities by providing superior financial products and services. By continuously helping members save money through lower interest rates, credit unions can significantly enhance their members’ disposable income. This additional financial freedom can lead to increased spending and investment within the community, promoting local economic growth and stability.

Affordability and Accessibility

Many credit unions, including Synergy Federal Credit Union, focus on offering affordable financial solutions. Continuous refinancing ensures that members are always benefiting from the most competitive rates, making financial services more accessible and affordable. This ongoing process is more effective than occasional refinancing, which may leave members with higher interest rates for extended periods.

Reduced Financial Stress

Frequent refinancing can significantly reduce financial stress for members. Knowing that their credit union is consistently working to lower their debt costs provides peace of mind and financial security. This aligns with the mission of credit unions to enhance the financial well-being of their members and create a supportive financial environment.

Proactive Financial Management

Continuous debt refinancing reflects a proactive approach to financial management, which is often a core value of credit unions. By actively seeking out opportunities to lower debt costs, credit unions demonstrate their commitment to the financial success and education of their members, aligning with missions that emphasize member empowerment and financial literacy.

Conclusion

Continuous refinancing of high-interest debt aligns more closely with credit union mission statements than occasional refinancing, when labor and budgets allow financially personalized prescreen marketing. It ensures consistent financial health improvement, builds stronger member relationships, enhances community impact, maintains affordability and accessibility, reduces financial stress, and promotes proactive financial management. This ongoing approach is essential for fulfilling the core missions of credit unions, ultimately leading to more satisfied and financially stable members.

Doing more for existing and new members with fewer resources yields more mission fulfillment per dollar of budget and hour of labor; it’s a smart strategy for leaning into the mission. See a sample of automated prescreen marketing for near-branch new member acquisition here.