Transcription:
Announcer (
And now it's my pleasure to introduce our moderator for this panel. Joe Wellow founder and CEO of Total Expert. Joe take it away.
Joe Welu (
All right. Thank you guys. Great to be with you. Hope everybody's having a great conference so far. So, super excited to be with these two and talk about a topic that we spend a lot of time thinking about our industry does as well which is really how how to use data to move the business forward. So, I'm gonna introduce go right to left here. John Hutchins VP of Business Intelligence in Emerging Technology at Finance of America. Reverse. John good to be with you buddy. And Susan Allen head of product at Experian Mortgage.
Susan Allen (
Great to be here.
Joe Welu (
All right. So guys we had a great conversation leading up to this session. And why don't we start out Susan with you. And so we spoke a little bit about how lenders are using data and some of the pitfalls of that. But what does experience see regarding the lender use of data to find new borrowers? What do you see and what are your insights?
Susan Allen (
Sure, Thank you. So it's definitely a different world now than it was even even a year ago two years ago three years ago. What we're seeing is that lenders are incorporating not only what all Carl borrower triggers whether that's a mortgage inquiry trigger whether that's a property listing trigger. So, lenders are using those. But then also adding additional data elements to really prioritize those. What we see in for example inquiry triggers we see that the use of things like in the market models other data and analytics to help prioritize that list to optimize conversion rates. We see the same kind of things with property listing triggers. We're seeing more borrowers or more homeowners who are listing properties and then not actually following through on the sale of the property. So, it's more important than ever to pull in predictive analytics to try to understand who's actually likely to move. So, those are those are a couple key things that we're seeing.
Joe Welu (
All right. So, John you you spend a lot of your time figuring out how to un unlock value from data that you have. We spoke a little bit about how you guys are doing segmentation and how you're really honing in on how how to drive the business using the right level of segmentation but also the right level of personalization and customization. Would you talk a little bit about how you guys are doing segmentation? What do you even mean by segmentation? Right? I think there's a lot of people that think it maybe one way but in reality it's a much deeper topic.
John Hutchens (
Yeah, For us it's essentially taking the data that you've required from somewhere experie Experian from your own lo from your your systems your marketing wherever and classifying your customers in a way that drives more favorable business outcomes. So, whatever that means for you whatever that favorable business outcome is whether it's a funded unit or an app it's using that data collecting it and then putting it together in a cohort in a segment whatever you wanna call it. These people are similar. They probably prefer the same communication channels. They probably prefer the same timing mechanisms of outreach and essentially trying to do that to drive more loans right? Try to get more leads at the right time at the right points and the right communication channel success. So, I am very focused on trying to get all that data put it together create those profiles create the segments and to me that's essentially what segmentation is. It's not complicated.
Joe Welu (
So I wanna I wanna start fairly basic just because there's varying degrees of sophistication in the audience. And never want to assume people are a certain level of of sophistication versus not. But, starting at the really the baseline I've got X thousand or x million contacts customers prospects in my database Okay. And, I want to drive volume I wanna drive loans but let's just say I want to drive purchase loans right now based on the environment that we're in. Where do you start? Like if you were to walk in somebody said Here's a database with a million potential customers.
John Hutchens (
I would start small right? I wouldn't try to do too much. You've got a million customers they're gonna have a million different reasons for coming to you.
Joe Welu (
Maybe it's 10000.
John Hutchens (
In there anywhere in there Right? Even if it's a hundred start small right? So, much of segmentation is a process and a journey. It's not a destination. You're never gonna arrive at a point where you clap your hands and walk away and say segmentation's done. It's constantly ongoing whether it's a million or or 10000 right? So, I think start small and actually start looking at the data that you have and then trying to figure out where you have data gaps that you can piece together to create your puzzle of those profiles or those segments. If you are looking at the data and you're looking at even if it's a spreadsheet it doesn't have to be a sophisticated technology that's fine. You can start to use a spreadsheet to understand your data start to see the customer preferences and then okay I need to call Experian to go get XYZ data to append and really start to build a puzzle piece out to say what are we trying to do here to elevate our customer experiences?
Joe Welu (
So, just to unpack that a little bit and Susan I want you to chime in as well. I've got a database set of prospects customers depending on the category and I know that ultimately there's going to be a certain percentage of those people every year that are gonna transact regardless of whatever the market is doing. Agree Right? Absolutely. There's gonna be people people get I think overly concerned about the cyclicality of the economy. The reality is home ownership in America isn't going anywhere and there's gonna be a certain amount of things that are gonna move the market regardless of what's happening right? people get new jobs they get transferred they get divorced they get married. Somebody unfortunately passes away right? They age out of their home. You guys are in the reverse business. How do you guys look at those types of signals and then know what to do with those signals? Do you start like where do you start connecting those dots?
Susan Allen (
So we do a lot, What we find is that the lenders who are most successful at converting the leads into actual what whether you're talking about response rates or funded loans are those that gather the data that are required for a particular purpose right? It matters, Are you looking for a home equity? Are you are you looking for a home equity consumer? Are you looking for a purchase consumer product matters product? Product absolutely matters. We see significant differences in consumer in consumers who are gonna purchase a home versus folks who are home equity borrowers whether that is the type of consumer they are. So we have a experience has a large marketing arm and we cluster folks into into kind of descriptive categories. And, you're much more likely to see somebody who's a home purchase candidate for example described as a savvy researcher. You're much more likely to see somebody who's a good home equity customer described described as brand loyal right? So, understanding how folks are described not only does that help you figure out who am I gonna market to but how do I wanna market? How do I wanna message through through what channel? So it's using data that's fit for purpose to not only decide who you are going to reach out to but in what capacity.
John Hutchens (
I think if I could riff off with that for a second I was talking earlier about the process and starting small so much of segmentation and omnichannel measurement it can be a process or basically a formula right? Talking about what she's saying there. You've got there these different pieces. You've got your message of what you're actually saying. You've got the timing of when to send that message. You've got the medi you've got who you're gonna send it to you've got your right channel you've got your trigger point like what's actually triggering this thing off. And if you just start looking at those five data points across all of your different your your different profiles your different people in the databases you are going to start to pick up on little hints you guys on anybody in the field. Any loan officers in here are probably gonna see that. You're gonna start to understand more. And again trying to complete that puzzle picture of of a complete customer profile. That's when you're gonna start to know Okay I need I need more data. I need a better customer track total expert can offer me. You'll start to see that kind of form just by keeping it kind of small keeping it simple and and not not doing too much with it.
Joe Welu (
One of the things that that we talk a lot about and spend a lot of time thinking about is ultimately having the most comprehensive profile of a customer and what actually means right? what do people think it means and what it actually means. I've found two different things and I wanna get you guys this feedback on this. A lot of people believe you have a customer profile It's a moment but a lot of times it's just a moment in time. The reality is most of the value that you can drive from that data is what is changing in in their individual world. Do you guys agree with that? And give me some commentary on how that profile that customer profile evolves and maybe where some of the pitfalls are being able to understand what's evolving in each one of those customers world.
Susan Allen (
Definitely, So I think when it comes to data it's really interesting. as as we were talking in preparation for this Joe mentioned the notion of it being a data arms race. And I think that's very that's very apt. And what we see are the lenders who are most successful do tend to pull in a lot of data. Whether that's trended data somebody who's a 720 FICO score it matters whether they just came down from an 800 or up from a six 20 right? That's a that's a very relevant data point to understand about your consumer. but there's also that you you you can get overwhelmed with the data. So what are you doing with the data? It's important to make sure that you have data that's as we mentioned before kind of fit for purpose but also data that you have. You've massaged a little bit. we've done some really interesting lost lead analyses with lenders where we go in and we say Okay you had this set of leads you marketed to what happened?
Joe Welu (
You Spent money to acquire customers.
Susan Allen (
You spent money to acquire, Right? What happened? And then use that in the feedback loop.
Joe Welu (
I'll unpack that just a little bit. How do you when you say what happened what are you looking for?
Susan Allen (
Sure. And so one of the things that I'd encourage as part of this it's a different world now than it was a couple years ago is as you unpack the what happened open the aperture up a little bit in terms of the data you look at as well as the timeframe right? It's common for lenders to say Oh did that borrower or did that applicant close a loan with me within 90 days 120 days? Well maybe they didn't but they closed it six months later. Or they called with somebody else by the with with somebody else by the way. Or maybe they didn't even get a mortgage at all. Maybe they got a credit card followed by an auto loan right? so it's important to really dig in and understand. And when we've looked at that one of the things that we've noticed in these studies is that when the client loses a lead they are much more likely to lose it to a non-bank than to a bank. And, so when we look at this lost lead analysis what we see is that non-bank are garnering more share than they currently have of the marketplace and then when we look at who are the biggest not only consumers of the most data but also really sophisticated in terms of how they're leveraging that data both in terms of creating the list and in terms of messaging. We definitely see the IMBS very aggressive on that front. I don't know if that's consistent with what you all see.
Joe Welu (
Yeah, I mean we talk all the time about look the future of the industry is gonna be settled with essentially what we're in right now. We refer to it all the time as a data arms race right? It's still about the customer but how can you use data to more deeply understand the customer? And then how can you use that data to better serve them get better financial outcomes right? You guys I know huge into really understanding the whole financial health and wellness journey what it means and then being able to use data to understand what's going on at these different milestones. I mean talk a little bit about some of your key learnings as you're looking at a wider aperture wider view of of data. Cause I think that is a mistake that we see I think you guys would agree with me is people they their default is what they think Right? Versus really stepping back and saying give me all of the data points and then look let me look at a year or two years. How what would have been your key learning journey?
John Hutchens (
Yeah. I think for us it's been really important to look at the life cycle of where that customer's at. So, if they're early in the funnel if you're prospecting for instance and you're using one particular tool or medium you're gonna get different results than if you're using that same communication channel or medium deeper in the funnel right? For instance SMS you're probably not using SMS to try to go prospect. It's probably not working. And if you are I wanna talk to you cause I wanna figure out how to do it right? It's just probably not working well. But once you get to the transaction or you have things cooking you're working with that relationship is there. SMS is just a it's table stakes right?
Joe Welu (
Do you think a lot of people make a mistake on they think they should be using email or text at a certain place in the funnel and they're actually just using the wrong channel? Do you think people make make that mistake?
John Hutchens (
I do. I think that there is such thing as the wrong channel. I tend to believe in transparency just over communicating even if it is the wrong channel. So I hesitate to call it the wrong one but there is definitely a preferred channel by that consumer that will drive that outcome that you're looking for. And, that consumer wants it when they want it. It's just table stake takes to expect SMS at certain key points right? Maybe live chat depending on certain data points like the marketing source where you're getting that lead from live chat is could be useful right? Other channels no one cares. They don't want live chat. And, so I do think that it's it's important to keep in mind that more information that consumer is probably better. Hey I sent you an email sorry I know you probably prefer text my bad. But then now it's in your your head. I've gotta send that next customer a text right?
Joe Welu (
So, let's talk a little bit about how you really need to adjust to the feedback loop. Okay? Like when you look at data across the life cycle of a customer part of the success from talking to you guys and our own key learnings is your ability to course correct and adjust. Based on what you're hearing from the data. Agree and maybe elaborate on that a little bit.
Susan Allen (
Sure. I mean absolutely agree, There are a few things more valuable I think than a than a very robust lost lead analysis that says I didn't pull it through it did it close a mortgage? If so with whom? what do I know about that? And, when right? So I I think that that's really critical. I think also one of the things that's important about your question was kind of listening in that feedback loop. We also did some interesting consumer surveys where we went out and did interviews and surveys and focus groups with consumers to get their feedback on their perception of the industry. How do they think about mortgage. And what was really interesting about that is when we talk to folks specifically who self disqualified meaning they look to us and they're probably on your lists right? As folks who would likely be eligible and interested in a mortgage. They're interested probably eligible but they don't think they'll qualify. So they self disqualify what they told us more often than anything else. They don't know who to talk to. They are twice as likely to talk to family and friends as they are to anybody in our industry Right? And they don't trust.
Joe Welu (
Just to clarify that a little bit so the research that you've done with consumers
Susan Allen (
With consumers.
Joe Welu (
Key hurdle for a lot of those consumers is not understanding where to go for advice.
Susan Allen (
So it's correct. So, it's not understanding where to go for advice. And I don't mean to minimize saving for a down payment and other things like that. But when you just ask consumers about their journey and what they need they need more transparency. They need you. It's so funny cuz I recently graduated from having teenagers so congratulations to me on that. They all lived. but this whole you don't know me. You don't know my story. It was so it was really interesting how much that got reflected in the feedback that we got from these consumers who are not coming to us as an industry. They think we don't understand them. So, to John's point about really having to have that communication we might think we're over communicating. We might think we're over educating. We might think consumers have all the data that they need. And they should trust us cuz we're a credit bureau we're a bank we're a trusted advisor. That's not the feedback that we're hearing directly from consumers.
Joe Welu (
In spite of all of our best efforts to change.
Susan Allen (
In spite of all of our best efforts.
Joe Welu (
Still got work to do.
John Hutchens (
I think it's important to call out there that with a lot of the data and the segmentation that she's talking about if your loan officers or your sales force are doing active listening and they're taking that active listening and things they're hearing and turning that into data that's going to be feeding things like her her models that make her models better that then feed back into yours. And, there is a flywheel effect there right? The better you're actively listening converting that to data that you can then segment better on the better off other people whether it's your data engineers are experienced or total expert whoever the better they can do their jobs to give you more data. And hopefully in this environment you can start to find your way out.
Joe Welu (
I want to define a little bit when when you guys say act when we talk about actively listening to customers right? it's not just what the customer is saying Okay? It's really what they're doing or not doing. That is some of the most powerful feedback. Do you guys agree with that?
Susan Allen (
I do, I think there's I think there's some data that can be fed in to help active listening. So, let's take let's take Helo for example right? If you're if you're thinking somebody's in the market for a home equity line of credit it's gonna be a very different message and a very different conversation. If you have the data to tell you oh gosh looking at this this consumer's trade line they would really benefit from debt consolidation versus oh looking at this consumer the age of their home how long they've been in the home all these other things they're gonna be much more likely to be receptive to a remodel type of a message. That's listening to the data. And if you have the data on oh this consumer prefers E is more likely to respond to email this one's more likely to respond to some other channel. You can listen first to the data and let that inform how you reach out. And I'll hand it over to you to talk about actual human listening part.
John Hutchens (
I think that was that was well said. I mean so much of what a loan officer does now in these data wars is collect data right?
Joe Welu (
They don't they don't probably think of it that way.
John Hutchens (
They don't think of it that way. I know but for people like me on the back end so much of my data were right is to try to append this data from other sources to create that that complete profile. And, ultimately she said it perfectly there when you combine the two you've got you the one officer or your sales team will know the preferred channel. You'll know how that customer wants to communicate. You'll know how to communicate the right life cycle the right stage. They'll they'll provide the data they'll provide other information that you can use to activate and create a competitive advantage. Again the whole purpose of all of this is to drive those favorable outcomes that when you more business.
Joe Welu (
So, it's really the three buckets that we always think about. You you have certainly zero party data the the data that your customer really does tell you right? Whether it's a survey or communication you have the data that you retain from doing business with them applying closing loan and then you have third party sources and I want to talk about and drill this down into actually how do you operationalize a strategy to close more purchases? What are the data sources that you guys would recommend if somebody says Hey I've got a pretty good set of data here on my customers right? We're listening. We understand their preferences we also can segment based on life stage we know approximately if they've been a homeowner or not a homeowner some of the basics. What are the other third party signals that they should be thinking about pulling in to help unlock purchases?
Susan Allen (
Yeah so I think it's interesting some of the credit triggers these are tried and true products right? So, credit inquiry triggers and sometimes we hear oh gosh yeah.
Joe Welu (
So that's late funnel.
Susan Allen (
That's it's very late funnel.
Joe Welu (
Last Moment.
Susan Allen (
That's last moment. Folks are effective using it. talk to your talk to your loan officers who leads. Picked off five minutes after you call right? So there are companies who are effective with that. Same with property listing triggers right? So, somebody's listing a home for sale. That's actually much earlier funnel. What we find is that there's a good 35 day gap between the time when somebody lists on average lists a home for sale and then does the mortgage inquiry. That gives you a lot more time to actually reach out and cultivate that relationship. But in any of those we find the clients who are most successful are bundling that with some type of in the market modeled data that goes and looks broadly at their credit trend looks looks at all the information the tradeline information.
Joe Welu (
So, that's kind of like the first parts the trigger listings and credit triggers. Those are sort of the basic building blocks.
Susan Allen (
Those are the basic building blocks. But then adding in predictive modeling that I mean there are we offer 'em others offer 'em There are good models out there. A really good models gonna be based on millions of data points right? And really help you hone in on here's how to prioritize that. Cause you can't get to everything with the most expensive outreach that you have right? Yeah. So how do you prioritize that way?
John Hutchens (
I wanna jump in there because one of the things that we found that was really interesting in doing our own data modeling at FOAC was in looking and saying Okay what data do we have as soon as we get a lead whether it's from a credit sugar whether it's from a branded lead source what do we know? We know where they came from. Was it web form? Was it phone call? We know what time of day they called us. We know the day of the week that they called us from if they called us if it's a credit sugar right? You get some you get some basics you get a baseline. And from those baselines alone we were able to predict pretty high likelihood of who's gonna move forward and who's not. And essentially what we're talking about there is prioritization and scoring. But when you look at those things you can start to create segments. You can start to take that and say Okay these people I'm not gonna waste my time. They're probably not going anywhere because of time of day or lead source or whatever.
Joe Welu (
Right? So, what you're saying and and we see this I agree with what you said but I just wanna clarify just the basics right? Just understanding and unlocking using data to understand kind of the basic elements and then taking action on those things really unlocks a ton of value.
John Hutchens (
Just start somewhere.
Joe Welu (
We in my opinion okay and I want you guys to chime in on this is that a lot of organizations they start with great intent. They invest in data sources they invest in tools internally technology and they start doing segmentation. They start even what we call hydrating which is bringing in third party data. And, it's somewhere between that moment and actually then putting it in the hands of the loan officer at the moment of truth that it breaks down. Do you guys see that as well? And what are your thoughts?
Susan Allen (
Yeah, experience we've got a front row seat into hey these folks pulled credit and and here's what happened. The in between I don't know. So, the thing that I can share is that there's a difference between lenders who seem to do a more effective job going from their list to conversion how they get there. We can tell what kinds of solutions they leverage from us. So, I guess my parting thought on that comment would be if you're not doing it already do a comprehensive lost lead analysis and ask your providers if this is what others are seeing across the board. Have 'em give you our are we at above below
Joe Welu (
so benchmarking selves against your competitors.
Susan Allen (
That'll give you a good state.
Joe Welu (
Just because you have the inputs you have the third party data triggers you have the segmentation Doesn't mean success.
Susan Allen (
Doesn't mean success. It's that combination. It's that handshake between having the right data to create the right list and prioritize and using the data to message. And then everything John's been talking about how the organization operationalizes that.
John Hutchens (
It's essentially competitive advantage right? So, much of of this data war is about how do I create a competitive advantage in this marketplace on a purchase environment or shifting great environment or whatever. That whole process and structure is your advantage against your competitors how you do it whether you do it your competitors are doing it I can confirm that right?
Joe Welu (
It's the level of execution.
John Hutchens (
It is happening. It's the level of execution. It's the level of of time you're spending on it. And at the end of the day how successful you're doing it to get that person to the outcome that you choose.
Joe Welu (
All right. We got about five minutes left here. And guys we've got a couple great minds up here. One from a is executing and in the trenches every day using it to drive business. And another that has tremendous viewpoint into the world of data and all that's available. Questions from from the audience? Yeah go ahead.
Audience Member 1 (
Yeah just a quick question on and this is you're know on these top three triggers that are coming out on a semi-regular basis despite the market despite all the tools all the things about different strategies that approach those triggers on
John Hutchens (
Yes, Some of that I wouldn't necessarily be willing to share but there there are definitely things that do fraud that do work. Yeah. Credit triggers if executed right. They do work right? They are late in the funnel they do work. There's also types of educational campaigns that you can run that again those work it's not so much about the where you're getting the data from. It's your company your the marketing that your company is doing is different than the marketing that my company's doing. And, what works for me is not going to work for you. And so much of it is relative to your own company. That's hard for me. But there are definitely things out there that that do work. And she can probably rattle off 14 of them on data that she's seeing on her side that will clearly indicate to you here's at the broad industry that doesn't relate to F O A C. Here's what works across industries or companies.
Susan Allen (
Yeah. Credit triggers for sure.
Joe Welu (
Yeah. So I mean we broadly we see credit triggers and and listing alerts in our world be the very highest ROI data sources. There are there's vast differences though on the execution right on on what people are doing with it. Do they have a process in place to bring it all the way through the sales organization? are they enabling the field correctly right? All the way down to call scripts and best practices. Do they have that framework in place? And we've talked about this. I think you guys agree with that. It's really critical that you have an enterprise level strategy that is built around best practices. And at least that's what we see. You guys agree with that? Absolutely.
Susan Allen (
Yeah. And I'll throw in I don't have any stats on it but but definitely an underutilized resource in our industry are folks who have been either who either dropped out of the funnel and then didn't ever originate a mortgage or folks that we have declined. We as an industry do a horrible job. We say no to people instead of not yet right? And, we leave borrowers unsure how to come back in. But, there are some lenders who make very robust use of that as a the same way others would look at their current portfolio. They look at these folks that they're trying to kind of groom in and bring in. So, again I don't have any stats on how effective that is but I know there are folks who pay attention to that and and use it very effectively.
Joe Welu (
Great Question, go ahead.
(
You said about borrowers disqualifi themselves and they don't reach out their that was the question in regards to they didn't want call. There's a lot of lot of buyers have that that factor that they call so they're gonna get sold on something they don't wanna do.
Susan Allen (
Yeah. So the question in case folks in the back couldn't hear it is when we were talking about the the research work on disqualifi self disqualified borrowers did people talk about not wanting to get sold a mortgage? The research that we did was actually under the auspices of trying to help close the racial and ethnic home ownership gap. And, so we were trying to understand what do consumers think about our industry? And, so we asked them some questions around like like what is stopping you from applying for a mortgage? and we gave a number of choices and I was surprised that the very top choice was I don't know who to call or some variation of I don't know who to call. I don't know what information to trust. It wasn't. Number two was saving for a down payment but number one was this lack of trust and understanding who to call. And then a subsequent question was who do you call contact for advice? Twice as many people said family and friends and like less than like a third said they reached out to anybody in our industry. So, they're not sure who to call and they're not calling us. Right.
Joe Welu (
Guys we are out of time. Thank you so much you guys. Fantastic amount of knowledge. Thank you for having me. All right.
Announcer (
All right.