An independent survey commissioned by Callcredit Information Group has revealed the scale of inaccurate targeting by credit marketers and, alarmingly, that poorly-targeted mailed credit offers, such as credit card, loan, home shopping and mobile phone credit offers could turn off up to 78% of consumers. Asked how they would react if they were mailed a credit offer, only to be turned down when they applied:

• 39% would not deal with the company again
• 30% said it would give them a negative impression of the brand
• 9% said they would lose all trust in the brand

However the issues for credit marketers start even before the credit risk pre-screening process begins. In many cases marketers are failing to indentify the most appropriate consumers to target with credit offers.

Missing the mark:

Results from the research show that marketers are failing to accurately target their credit offers, as a third of people who receive credit offers (33%) either don’t think that any credit, catalogue or mobile phone offers that they receive are relevant for their financial situation. This rises to 56% for just credit card and loan offers, 77% for catalogue credit offers and 79% for mobile phone credit offers.

The results also highlight that a significant amount of marketing is wasted due to the lack of consumer insight; 13% of adults are surprised to receive credit offers as they don’t use credit (1 in 5 retired adults (20%) said they don’t use credit at all), whilst the same percentage (13%) said they had been mailed about a product that they have never used and never would. Surprisingly 42% of consumers who have received credit offers felt that offers were no more relevant to them even when they were already a customer of the company sending it.

“To increase the profitability of credit marketing, it is essential that marketers have a holistic view of consumers’ activity so they know exactly what is going to hit the mark.” said Adam Leslie, Head of Data at Callcredit Marketing Solutions. “Not only do organisations need to know how a consumer uses credit with them, but also how they spend with competitors. This enables them to understand their profitability potential, prioritise marketing spend and differentiate messages to target their offers more effectively.”

Failing to weed out the riskiest consumers:

The research also shows just how essential credit risk screening is with 39% of adults confirming they wouldn’t deal with a brand again if they were mailed a credit offer, only to be turned down when they applied. But it’s not just the potential of losing customers that marketers need to think about, badly-screened credit offers waste both marketing resource and opportunities. 1 in 11 adults (9%) surveyed have been surprised to receive a marketed credit offer due to their poor credit history, rising to 15% in 35-44 year olds. The importance of assessing this risk is clear as 12% of 35-44 year olds have responded to a credit offer knowing they might not be able to keep up repayments, raising the risk of bad debt in the future.

“Marketing to consumers who can’t afford a credit offer is distressing for them and is clearly a waste of money and marketing resource. This research delivers a strong message to marketers that it can also have a massive impact on a consumers’ view of a brand and getting it wrong could drive a significant number of customers away.” added Adam.

Credit reference and marketing solutions specialist, Callcredit, commissioned the research as part of its ongoing development of targeting tools to deliver optimum “share of wallet” for consumer credit offers.  The company is about to add a new suite of profitability tools to its portfolio for credit marketers, using data from the live credit referencing database in a compliant way to provide a full view of consumers’ market-wide credit spend.

Callcredit has developed specific versions of its new nGauge profitability tools for the credit card, loan, home shopping and mobile phone markets. Designed to maximise customer conversion and accept rates, it aims to help marketers increase customer value.