What is a prescreened credit card offer and how does it Work?
Prescreened credit card offers work just like any other prescreened offer, only they are specifically for credit card products. Let’s take a look at a real scenario before we dive into the logistics of how the backend of a prescreened offer works.
Let’s say you are shopping for credit cards that offer balance transfer promotions. The best one you came across scouring the internet was a 3% transfer fee and 1.99% APR for 24 months. So, you applied and were approved, but haven’t moved any farther yet. Perhaps you haven’t taken the next step because you’re waiting for a better offer to come along. Next thing you know, you have an offer in your inbox for a balance transfer promotion with a 3% transfer fee and 0% for 18 months. Not only that, the offer includes your name and indicates that you’re already prequalified for this offer. The next steps are clearly outlined and if as advertised are fast and easy. Furthermore, you’ve checked the legitimacy of the source of the offer and it checks out. Without hesitation, you accept the offer and transfer your balance with confidence.
On the consumer side, you’ve just delivered a personalized experience that left a member or non-member very happy (as long as everything went as planned). On the credit union side, you just captured a loan by taking advantage of technology. No cold calls. No denied applications. Prescreened marketing is beneficial for the member and the credit union.
So, how does prescreened credit card offers work?
The Fair Credit Reporting Act (FCRA) permits creditors to review consumer credit reports and issue firm offer of credit. Furthermore, credit bureaus can match individuals to lenders based on specification. Once matched, they can share names and addresses to be used for marketing offers. Specifications can include credit scores that meet lending criteria, geographic range, and more. By issuing a prescreened offer you’re not guaranteeing approval, but you are saying that the member or non-member has a very good chance of qualifying. If they choose to accept the offer, and they do not meet requirements disclosed with the offer then the offer can be revoked. It’s important to include disclosures on the prescreened offer to protect yourself.
As a financial institution you probably rely on third-parties to handle marketing. And prescreened marketing offers are no different. Credit unions that are committed to producing results should partner with Ser Tech to generate effective prescreened marketing offers. Ser Tech can procure data, design creative, and fulfill prescreened marketing pieces through omni channel delivery. Our prescreened marketing program is turnkey, all the credit union needs to do is determine what creative to send, approved the copy and set the credit criteria. Ser Tech also provides Trigger Programs that allow you to monitor a set of prospects/members in your geographic footprint for specific credit inquiries. Within 24 hours of a credit inquiry, Ser Tech can send prequalified offers via email or mail. With the statistic that 60% of loan shoppers will commit to a loan within a week of a credit bureau inquiry, it’s critical to get the offer out as soon as possible and apply follow up. Ser Tech provides faster access to campaign insights and follow up lists so that you have an increased chance of capturing the loan. As effective as technology is, personal touch is still unmatched.
What is a prescreened loan offer and how does it Work?
Prescreened offers can be used to target a variety of financial products. This can include:
- Auto loans
- Personal loans
- Credit cards
- Debt consolidation loans
- Mortgages
The science behind the prescreening process does not change per product, but the criteria will. Therefore, if you’ve been prescreening for credit card offers and wish to switch to personal loans or auto loans, you need to create new criteria. For example, if your credit union wants to capture more auto loans $25,000 and up, you would center your criteria around this goal. Criteria can include credit score, income, geographic location, and any other factor used to make loan decisions via your underwriting process. If your prescreened marketing partner is behind the times you may be limited, thus stressing the importance even more of partnering with the right agency. The more detailed criteria is, the more likely you are to have a better conversion rate. Getting the right offers in front of the right people will improve customer and employee satisfaction while boosting ROI. Talk about
winning all around.
What are the pros and cons of prescreened credit card and loan offers?
Prescreened offers can deliver a plethora of benefits for credit unions and members or non-members. Here are some of the pros and cons of prescreened credit card and loan offers.
Pros:
- Better conversion rate: Prescreened offers allow you to advertise specials rates exclusively to members and non-members that have a very good chance to qualify. As a result, you are likely to capture more loans when you compare applications to approvals.
- Increase ROI: Marketing requires plenty of capital. As you make marketing decisions ROI will be critical. With many types of marketing, ROI statistics are not always offered. Of course, ROI can vary depending on how competitive your offers are, but ideally if you are competitive and utilize prescreened offers effectively, you will see impressive ROI’s. Learn how Ser Tech helped one credit union earn a 166x return on investment!
- Deliver a more personalized member experience: Prescreened marketing allows you to deliver a personalized member experience. Demonstrating that you understand member needs can automatically upgrade how a member feels about your brand. In addition, extending offers to members that are demonstrating a need can maximize response rates which grows revenue.
Cons:
- Unsolicited mail: Some members or non-members may not appreciate loan offers they did not directly ask for. In addition, sending offers too frequently can make members annoyed, thus making them unsubscribe from your mailing list. You will want to find the perfect balance of staying in front of customers and adding value without overwhelming them. If you get any push back from individuals receiving mail you can always remind them that they can opt out of prescreened offers permanently or up to 5 years. Temporary opt out requests can be filed online, but permanent requests must be mailed in.
- Unhappy members or non-members that don’t qualify: As we discussed earlier, you assume the individuals receiving prescreened offers, but there’s the chance they won’t upon a final application. For example, if a member recently lost their job they may not meet the income requirement. As a result, they won’t qualify for the prescreened offer. This can leave members frustrated.
Why choose Ser Tech for prescreened credit and loan offers?
If you want to maximize results, choose Ser Tech.From identifying members to target to providing fast analytics, Ser Tech goes above and beyond to maximize ROI. Ser Tech utilizes trigger marketing, another factor that sets them apart from the competition. Triggers allow credit unions to receive crucial data on member capital needs in “real time.” Triggers include credit inquiries which set up a prescreened offer to be sent within 24 hours. Impressive, right? Wait til you see the results. Trigger programs achieve a 5% to 12% response rate. Ser Tech is your go-to for prescreened marketing offers delivered with intelligence, integrity, and intent. But don’t take our word for it, check out what our
customers have to say. And when you’re ready,
request a demo online.
Opportunity is knocking. . . sign up for a free month of Ser Tech’s EverScreen product to unlock the loans that you could be closing!
Cons: https://www.forbes.com/advisor/credit-cards/pros-and-cons-of-pre-screened-credit-card-offers/
