Why Real-time Prescreen-of-One Should Get a Bigger Share of Your Marketing Budget

Faced with lower response to direct mail credit offers as well as economic pressures to reduce marketing costs, lenders are looking for practical strategies to meet growth objectives. Many lenders are adopting more sophisticated direct mail prescreen practices, such as lifestyle analytics, in an attempt to reach the right prospects. While effective, these “off-line” prescreens, as they are known, are only one part of the solution. The bigger opportunity for lenders is to augment the off-line prescreens with real-time — whenever the opportunity arises.

While the terms “prescreen” and “cross-sell” are often used interchangeably, there are differences between the two. Cross-selling generally occurs when a consumer has made an application for a specific product. As part of the application, the lender pulls a credit report to determine whether or not the individual is eligible for that specific product. The lender can then evaluate other products and services for cross-selling.

With an online prescreen solution, lenders can make pre-approved credit offers within seconds. Prescreen-of-one, on the other hand, leverages the consumer’s presence at the point-of-sale even though they haven’t applied for any specific product. During a real-time prescreen transaction, a consumer’s creditworthiness is evaluated in seconds. When a consumer passes the prescreen criteria, federal law dictates that a firm offer of credit must be made.

Real-time or “online” prescreen is one of the most cost-effective and flexible ways to quickly increase wallet share. However, direct mail is still a substantial source of revenue for lenders big and small. The best approach is to deploy a balanced blend of both strategies.

For more information, read our banking pre-screen-of-one white paper