It is true. It all starts with the list. Individually scored credit-based lists can be a very effective tool for a dealership in generating non-prime and prime leads. Many dealers and marketers are unclear on the types of credit data available and how to use the data most effectively. As the new bankruptcy law reduces the number of filings, credit data will become an even more valuable data source in generating sub-prime leads.
Individual consumer scored credit data is the most accurate and effective data source used in target marketing for sub-prime prospects. Individually scored data allows you to reach a consumer who meets approval guidelines based on credit score, bankruptcy status and trade lines and also allows you to further target based on months remaining on a loan or lease. Incorporating demographic data selects such as ethnicity, age or income with credit data can improve results. Discuss your target audience with your data provider and ask to review attributes available to meet your goals.
The Federal Trade Commission under the FACT ACT has issued very specific guidelines for use of individual credit data for marketing purposes. The FACT ACT requires the mail piece to display a firm offer of credit using “pre-approved” or “pre-qualified” language, opt-out information and the terms and conditions of the offer in certain font types in specific locations. Modeled or aggregated data can only be used in “Invitations to Apply” applications. You cannot use language indicating they are “pre-approved” with modeled data. Be careful as some companies offering credit data may really be offering modeled credit data. Be sure to ask your data provider which data you are receiving, if you are using individually scored data and confirm the data you are receiving is FCRA compliant with lender permissible purpose.
Selecting a Bureau
All individually scored data is derived from the major credit bureaus. It is very important to match the credit bureau used for front end target marketing with the bureau your primary finance company is using to approve your loans. Scores can differ between bureaus and in sub-prime marketing you want to reach prospects that best meet your lenders underwriting guidelines. Ask your F&I Manager which credit bureau you are using on the back end and make sure your data provider delivers your bureau of choice.
Once you decide on the type of data it is time to look at the number of prospects in your marketing area. Counts are available by city, zip codes and radius and should be turned around quickly. If you are using phone numbers, keep in mind a Subscription Account Number (SAN) is required and can be obtained from FTC as a part of the National Do Not Call Program. Ask your data provider for counts and assistance in finding the number of prospects that meet your campaign needs.
Be sure to ask how often the data is updated that you are receiving. This becomes very important in working with sub-prime lists, as activity on the file can change a score outside your targeted range. To ensure deliverability, be sure to ask your provider if your list will be processed with the National Change of Address (NCOA) file and CASS certified and include a verification report with each order.
Mail piece Review
With recent law changes and increased legal scrutiny, you want to be sure your mail piece is in compliance. Your data provider should provide guidance and the most current disclaimer. If you are using individually scored data, your data provider should require you to submit a mail piece for review. Once your mail piece is approved, your data is typically delivered in electronic format. Credit-based lists can only be released by the print vendor and requires a standard third party processor agreement. Ask your data provider if they will be reviewing your mail piece.
Now that you have the tools – you will be on your way to success. Combining a quality credit-based list with an effective mail piece will drive more traffic to your showroom and help you deliver more cars.
Auto retail veteran and F&I products expert Paul McCarthy has joined AUL Corp. as vice president of national sales.