Market turned off by poorly targeted credit offers

A survey commissioned by Callcredit has highlighted the failures in targeting credit offers and the issues that accompany them, with 78 per cent of the market turned off by poorly targeted offers.

The survey has revealed the scale of inaccurate targeting by credit marketers and that poorly targeted mailed credit offers, such as credit card, loan, home shopping and mobile phone credit offers, could turn off up to 78 per cent of consumers.

Asked how they would react if they were mailed a credit offer, only to be turned down when they applied, 39 per cent would not deal with the company again, 30 per cent said it would give them a negative impression of the brand, and nine per cent 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 identify the most appropriate consumers to target with credit offers.

Results from the Yougov research show that marketers are failing to accurately target their credit offers, as 33 per cent of people who receive credit offers either do not think that any credit, catalogue or mobile phone offers that they receive are relevant for their financial situation.

This rises to 56 per cent for just credit card and loan offers, 77 per cent for catalogue offers and 79 per cent for mobile phone credit offers.

The results also highlight that a significant amount of marketing is wasted die to the lack of consumer insight: 13 per cent of adults are surprised to receive credit offers as they do not use credit (20 per cent of retired adults said they do not use credit at all), while the same percentage said they had been mailed about a product they have never used and never would.

Surprisingly, 42 per cent 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.

Adam Leslie, head of data at Callcredit Marketing Solutions, said: '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.

'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,' Leslie added.

The research also shows just how essential credit risk screening is, with 39 per cent of adults confirming that they would not deal with a brand again if they were mailed a credit offer, only to be turned down when they applied.

It is not just the potential of losing customers that marketers need to think about - badly screened credit offers waste both marketing resource and opportunities.

Nine per cent of adults surveyed have been surprised to receive a marketed credit offer due to their poor credit history - rising to 15 per cent in 35-44-year-olds.

The importance of assessing this risk is clear, as 12 per cent 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.

Leslie said: '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,' he added.

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 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.

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