Help grow your customer base with one simple message: “I can save you $50 a month on your car note!”
Nothing motivates people to take immediate action like a well done refinance program. These programs help identify opportunities to cross-sell a more favorable auto loan with a lower monthly payment.
While refinance programs aren’t new, there are new data-driven strategies for driving successful campaigns that help move the needle in terms of profitability and customer growth.
Why the message works
Consumers might qualify for a lower rate auto loan for many reasons. First, based on the structure of the original loan there’s the reality of inflated loan rates. Also, lenders can sometimes offer better rates simply because they didn’t get a chance to look at the deal.
Near-prime or subprime credit can also fuel a higher Annual Percentage Rate (APR) at the time of purchase. But, in as little as a year, borrowers can make steady payments, re-establish their credit and improve their credit scores, which could qualify them for a better APR.
In all situations, a refinance program is your chance to reach out and help with a simple message that goes something like this: “We can help make that car even more affordable for you!”
The opportunity is real—up to 20 percent of your customers might qualify
The big secret behind successful refinance campaigns is this: you must identify and deliver the right message to the right audience. Using a specialized mix of market analytics and expertise, Equifax regularly helps lenders create highly targeted programs that drive informed, confident decisions and customer growth by expertly balancing opportunity and risk.
Here’s a peek at how we do it and the size of the market opportunity:
- First, identify all consumers who have a trade line with you. It could be a mortgage, credit card, or other account;
- Further analyze that list to identify individuals who also have an open auto loan with another lender; and
- Using information in the trade line, estimate the interest rate on that open auto loan.
We generally see that around 20 percent of consumers qualify for a refinance program. In other words, they have decent credit scores and are paying higher auto loan interest rates than could be offered.
Take it to another level
Next, you can fine tune that audience by playing the ‘what if’ game. Using a long list of credit attributes, you can pick and choose criteria, and visualize in real-time how it changes the size and quality of your audience.
For instance, you can play it safe and stick with people who have never been delinquent. Or, to expand your audience, you might select folks who’ve been 30 days delinquent in the past, but are now current.
To help you design a program that fits your unique needs and credit policies, we offer a support team and professional Credit Marketing Services (CMS) that can further refine your list by helping you answer other big questions like:
- Should I only include my current customers?
- Should I use this as an opportunity to expand my customer base by including non-customer consumers living in close proximity?
If you decide to market to prospects in your community, you can take a closer look at these people to better understand the risk you might be getting on the other end. Using our deep expertise in credit marketing, we can recommend specific cut-offs to mitigate your risk and better align your campaign audience with your internal credit policies.
Make the call, and we’ll do the heavy lifting
Equifax offers a total end-to-end solution to get your refinance campaign off the ground and out the door. You don’t need a dedicated IT/analytic resource or expertise in the automotive market. All you need is the desire to improve customer service, and profitably grow your account base.
Before you commit, we can show you the size of the opportunity within your customer base so you can determine if it’s worth pursuing.
- If you only have DDAs—not typical trade lines like mortgages, credit cards and other loans—you can work with our CMS team to build a relevant audience for an auto refinance message.
- Choose from custom prescreen analytics, where our team works one-on-one with you to build the right audience for your refinance message, or try our user-friendly credit marketing solutions platform which offers a sizable list of standard credit attributes you can self-select.
- Based on your marketing needs and budget, we can also facilitate the design and mailing for your refinance campaign. You simply approve the list, the design and printing of the mailer and the launch date(s).
As we speed through 2015, few programs can help deliver such a quick boost to the bottom line like an effective refinance campaign. The core message of saving money resonates with consumers and provides a smart, cost-effective strategy for growing your customer relationships. Make that call today to discover the size of the opportunity hiding inside your portfolio.
For more information on automotive solutions from Equifax, please visit www.equifax.com/automotive
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