HELOC Consolidation Wake-Up Call: Capturing New Accountholders in a Hyper Competitive Market

By Devon Kinnkead

The $73 Million Wake-Up Call

When we launched a HELOC consolidation campaign targeting prospective accountholders for HELOC debt consolidation opportunities, we knew the market was competitive. What we didn’t fully anticipate was just how much opportunity our client would leave on the table – and more importantly, what those missed opportunities could teach us about acquiring new relationships in this massive and hyper competitive market.

Campaign Performance: The Hard Numbers

Let’s start with the reality check. Our campaign sent 21,000 targeted offers to non-customers between Q2-2025, resulting in:

• 21 direct sales ($3.7M in new HELOC originations)
• 2 indirect sales ($64K)
• 712 lost sales to competitors ($73.3M)

That’s a sobering 3% market capture rate, an a unit loan basis, meaning competitors won over 96% of the prospects who were actively seeking HELOC consolidation solutions. With an average line size of $176,190, each lost prospect represents not just immediate lending opportunity but potentially decades of relationship value.

Geographic Performance: Where We Won and Lost

One Northwestern state emerged as our strongest market with 13 direct sales from 4,560 offers (0.29% conversion), particularly in one county where we captured 6 sales. This success suggests we have brand recognition or competitive advantages in these markets that we’re not leveraging elsewhere.

Conversely, another Western state – where we sent 5,817 offers – yielded only 3 direct sales (0.052% conversion). This dramatic underperformance in such a large market demands immediate attention. The data shows we’re losing significant volume in high-value metros where average loan amounts exceed $250,000.

Segment Analysis: Finding Our Client’s Sweet Spot

The most revealing insights come from our segment performance:

Winners:

1. High DTI Borrowers (64.4%-77.2%): Despite only 119 offers, this segment converted at 0.84% – our highest rate. These borrowers desperately need consolidation and are underserved by traditional lenders.
2. Mid-Tier Credit (601-642): With 0.55% conversion, this segment outperformed prime borrowers, suggesting our value proposition resonates with those who may face challenges elsewhere.
3. Large Loan Amounts ($148K-$251K): This segment delivered 8 direct sales with a remarkable 6.40% market share gain, indicating we’re competitive when significant consolidation is needed.

Underperformers:

1. Prime Credit (811-850): Despite sending 2,373 offers to this segment, we achieved only 0.29% conversion. Premium borrowers clearly have better options or stronger existing banking relationships.
2. Lower DTI (Below 51%): These financially stable prospects showed minimal interest, likely because they have less urgent consolidation needs or better alternatives.

The Competitive Reality: Why We’re Losing

The 712 lost sales tell a crucial story. These prospects:

• Received our offer
• Were actively in-market for HELOC consolidation
• Chose a competitor instead

The 3% loss conversion rate (versus our 0.1% direct conversion) means competitors are 34 times more effective at converting these prospects. This isn’t just about rate – it’s about brand awareness, speed, process, relationship, and trust.

Strategic Recommendations for Next Campaign

1. Double Down on Underserved Segments

Immediately reallocate budget toward high-DTI and mid-tier credit segments. These borrowers have fewer options and show 3-8x higher conversion rates. Create specialized messaging that addresses their unique consolidation challenges using behavioral economics best practices.

2. Show Up and Speed Up Response Times

With $73M walking to competitors, we must assume awareness and speed are killing us. Implement:

• Monthly campaigns to build brand awareness
• Instant pre-approval capabilities
• Automated document collection
• Same-day callback guarantees
• Faster digital application process

3. Geographic Rebalancing

Shift resources from underperforming states to high performing ounties. However, don’t abandon large states – instead, test localized strategies:

• Partner with local mortgage brokers
• Implement geo-specific rate promotions
• Test Spanish-language campaigns in appropriate markets

4. Rethink Prime Segment Strategy

Stop mass-marketing to 811+ credit scores. Instead:

• Create premium, relationship-based outreach
• Offer wealth management bundles
• Lead with financial planning, not just consolidation

5. Enhance Value Proposition Messaging

Our current messaging isn’t differentiated enough. Test:

• “Local lender” advantages versus national competitors
• Success stories from similar DTI/credit profiles
• Calculators showing total interest savings
• Clear timelines: “Approved in 24 hours, funded in 5 days”

6. Implement Behavioral Triggers

The campaign treated all prospects equally, but behavioral data could dramatically improve targeting:

• Multiple credit card balance increases
• Property value appreciation in their area

The Path Forward: From 3% to 30% Market Capture

This campaign revealed both our client’s vulnerabilities and our opportunities. We’re competitive in specific segments and geographies, but we’re getting crushed elsewhere. The good news? We now have clear data on where to focus.

For our next campaign, success means:

• Achieving 15%+ market capture in high-DTI segments
• Doubling conversion rates on home turf
• Building awareness and reducing speed-to-decision from days to hours
• Creating segment-specific value propositions that resonate using behavioral economics best practices

The $73 million that went to competitors represents more than lost loans – it’s lost relationships, lost deposits, and lost lifetime value. But it also represents our opportunity. These prospects were interested enough to apply for our client’s HELOCs. They received our offers. We just didn’t give them enough reason to choose us.

The market for HELOC consolidation is massive and growing. Rising credit card rates and home values create perfect conditions for this product. Our challenge isn’t finding prospects – it’s converting them before competitors do.

With these insights and strategic adjustments, we’re not just aiming to improve our conversion rate – we’re targeting a complete transformation of how we compete for new accountholder relationships in the HELOC consolidation space. Order your near-branch growth analysis to start your HELOC consolidation journey here.