Column: Get a Jump on “In-Market” Consumers

What better target market is there than those who have actively demonstrated “in-market” characteristics or taken positive action toward purchasing?

For most direct marketers who experience a substantial lift in response and activation rates as they adopt credit, behavioral, and transactional event-based triggers at the heart of their precision marketing strategy the answer is none. Few are able to suggest a more potent alternative to targeting “in-market” consumers with their often-staggering statistical propensity to purchase in the near-term, 90-day window.

However, in the quest to outwit, outplay, and outlast their competitors, crafty marketers are seeking ways to get out in front of “in-market” consumers, engaging consumers prior to the purchase signaling.

With the mainstream adoption of event-based trigger technology, response rates associated with triggered leads are settling in to a response range of 1 to 2 percent, down from the 3 to 5 percent early adopters experienced in 2005. Though 1 to 2 percent response rates are still strong, relative to the industrywide average of 0.4 percent, the most aggressive direct marketers are gaining competitive advantage by employing that latest advent in precision marketing: predictive triggers.

Predictive triggers identify “likely activators” based on a consumer’s emergence within a criteria-driven, consumer profile that corresponds to known purchasers. Marketers are able to capture potential purchasers as they emerge within the profile of near-term buyers, just prior to the critical event signaling they are “in-market.”

For example, a consumer caught by a home equity line of credit predictive trigger has taken on a profile characterized by such attributes as a specific balance-to-loan amount on open mortgage trades, balance on installment trades and percent usage on open revolving trades. The consumer has not yet inquired into a home equity loan, but shares common characteristics with those who do within 90 days.

Unlike the rapidly executed, knock out punch for an event-based triggered lead that is “in-market,” predictive trigger leads require a softer touch. As in the example above, many home equity loan leads identified by a predictive trigger do not yet know that their financial situation would benefit from a home equity line of credit. Once educated on the benefits, these leads are highly receptive to a credit offer.

How receptive? Analysis shows that leads identified by a home equity line of credit predictive trigger open a new loan 6.8 percent of the time within 90 days. This on par with the 6.9 percent of the population that opens a home equity loan within 90 days, as identified by an event-based trigger that flags consumers with a home equity inquiry on their credit file within the past 24 hours.

So why use predictive triggers? Direct marketers demanding the 3 to 5 percent response rates they were enjoying prior to widespread adoption of event-based triggers are finding that the consumer populations created by them are typically 80 percent unique or greater than those populations found by event-based triggers during the same time period.

Predictive trigger leads are a treasure trove of untapped or under-marketed prospects.

Direct marketers taking advantage of predictive triggers are beating their competitors to the punch, developing relationships with and pitching products to consumers that have not yet been bombarded by offers from marketers who have jumped on the event-trigger bandwagon. Statistical propensity-to-buy, combined with uniqueness-of-list population are yielding results that are improving direct marketing ROI by as much as 70 percent.

In fact, customers using predictive triggers for their bank card, home equity, auto finance, personal finance, retail finance, mortgage and student loan direct marketing campaigns are combining this new trigger approach with multichannel marketing strategies (including direct mail, outbound telemarketing, e-mail, and automated voice messaging) to achieve incremental uplift in response rates of higher than 30 percent compared to their event-based trigger campaigns.

Ultimately, predictive triggers are offering a competitive edge via a greater porthole of opportunity to develop a customer relationship during a consumer’s likely purchasing window. Combined with multichannel marketing to continuously reinforce the sales message and push the consumer toward the purchasing decision over the 90-day window, this approach is yielding improved response rates — particularly in the face of a challenging direct marketing climate driven by mainstream use of event-based triggers.

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