In the installment lending space, profitability is all about the leads that you put into your funnel. The better the overall quality of leads you purchase, the higher return on investment you’ll have in the long run.
And in such a competitive space, every ROI percentage point counts.
That’s why we recently hosted a webinar on boosting your lead purchase ROI. Two of the Whitepages Pro team, Kurt Weiss, Director of Online Lending, and Trevor Anderson, Manager of Solutions Architecture, shared concrete ways that lenders can optimize the lead acquisition process using identity data.
Understand your lead quality
Kurt noted that most lenders don’t have a strong sense of what the quality of leads they’re buying actually is. They get a mixed bag of verified and unverified leads, which puts additional burden (and cost) at the underwriting stage to weed out bad leads.
This is where Whitepages Pro Identity Check can help. By taking a look at your current customers, we can identify indicators based on data like phone, address, email, and IP. This allows us to build tailored profiles of who your best customers are, and which customers are most likely to default.
If you really want to understand how well a lead performed, of course, you need to track it through your entire loan cycle. The problem with that is that you may have to wait for over a year to see the final result. Meanwhile, you’re still purchasing new leads without a good idea of their quality.
How Whitepages Pro solves this problem is by singling out leads that meet certain criteria in order to extrapolate profiles. For example, they should have some age to them so you can see payment history.
Scrub out fraud to improve ROI
With this data in hand, we can create scrub rules to automatically weed out leads that are likely to be fraudulent. The result is that you can then scale up your lead purchasing knowing that you will have more high quality leads coming in and a better return on your portfolio.
Many lenders’ number one priority is to fund more loans, which means they prefer to spend less on scrubbing costs and underwriting costs. But, conversely, spending more on scrubbing your incoming leads saves costs at later stages. You’ll stop spending money on sending bad leads through the underwriting process. And of course, being more aggressive with the leads that you scrub gives you a higher certainty that you’re not going to lose the amount you funded on a bad loan.
The goal of scrubbing leads at the top of the funnel is not to lower the total overall amount of leads you purchase at the end of the day. Rather, we want to raise the overall floor of the quality of leads that you are buying. This allows you to scale up your lead purchase with confidence, knowing you’re not proportionally scaling up the number of defaults.
Have confidence in identity signals
Understanding the quality of incoming leads doesn’t have to be complicated. With the Whitepages Pro Confidence Score, we can take identity signals and assign a numerical value based on the projected quality of that lead. This gives your team a quick shorthand during manual review, and allows you to create scrub rules based on the Confidence Score.
Even removing a small amount of leads on the least confident end of the scale can improve your profit margins. And, of course, having confidence in your lead quality can be a path to auto-funding your top leads and streamlining your funding process even more.