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Instant Prescreen: How to Increase Wallet Share While Decreasing Costs

June 06, 2012 | Comments: 0 | Views: 150

Instant prescreen was developed as a response to growing ineffectiveness of traditional batch prescreen. Traditional batch prescreen presents generic offers to a wide array of customers that, at the time of the offer, meet a set of qualifying criteria. Because customers are inundated with so many offers for which they may not even qualify, this method has a very low response rate, typically around 0.6%. In order to realize a greater acceptance rate, banks called for a new, more effective method. Instant prescreen answered this call by providing a solution that qualified customers on an individual basis, at the point of interaction. With instant prescreen not only are customers individually presented with offers, but modern platforms allow these offers to be targeted and cost-effective.

Banks amalgamate customer information before making an offer then analyze this information along with demographic information to make the best possible offer for each individual consumer. Because these offers are specifically targeted to individuals at the point of contact, they are more likely to be accepted by consumers, with an acceptance rate of 5-40%. Not only are these offers are more widely accepted than batch offers, but can also be used to lower the cost of account acquisition.

There are two simple concepts for banks to remember when using instant prescreen to increase wallet share and decrease costs: provide value to the consumer and make each offer relevant. The first concept that banks must master is providing products that offer value to the consumer. Essentially, when an offer is made, the bank should not be selling a product, but is instead selling a benefit. This can be safety from overdrawing a demand deposit account, convenience of having all accounts at the same institution, or saving money by using an account with lower fees than the competition. When banks use instant prescreen, they can examine past and current consumer behavior to determine what product the consumer is most likely to accept, ie. the product from which the consumer can gain the most benefits. This increases account openings because they are providing the consumer with product that is helping the consumer in some way and it lowers account acquisition costs because the only offers presented are offers that are likely to be accepted, so price of redundant generic offers is eliminated.

The second concept is to make each offer matter. When batch prescreen is used, every consumer that fits a general set of criteria is presented with an offer. This method not only has a low response rate, but also incurs high costs from printing, mailing, and human resources required when presenting these offers. With instant prescreen, offers are presented on an individual basis and are optimized to be the best and most relevant offer possible. This not only lowers costs by eliminating the costs of batch mailings, but it will increase wallet share because the customers are qualified at the point of sale when the offer is made, so they are more likely to accept the offer because they have already chosen to interact with the bank.

Instant prescreen can be used to decrease costs while increasing wallet share in two ways: providing value to their customers and making each offer matter. Banks can provide value to their consumers by analyzing customer behavior and catering to their behaviors to make tailored offers that benefit both parties.

To find out more about instant prescreen please visit:

Source: EzineArticles
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