B-to-B Special Report: Put the Direct Back Into Direct Mail With Credit Scores
But it’s possible the bank might be better off not offering any more services to this particular customer. The worst thing the bank could do is offer a current customer an additional product, receive a favorable response from the customer and after all that turn him down for the B-to-B product. That could negatively impact the existing relationship or even lead to losing the customer entirely. Commercial credit scores help avoid the counterproductive interaction before it begins.
While risk variables like bankruptcies, liens, current delinquency and judgments can be used to identify current/existing risks and suppress unwanted prospects, they do not help you avoid prospects likely to become a risk in the near future by becoming delinquent or filing for bankruptcy. Good risk models can predict the likelihood of potential hazards before you spend marketing dollars on acquisition.
Using Credit Data to Grow Your Business
Commercial credit elements can be used to target businesses that are expanding. For instance, the presence of numerous inquiries on a credit report typically is seen as a negative, indicating a desperate need for credit. Modeling can take into account other elements such as days beyond term, derogatory indicators and purchasing history. A firm with numerous inquiries but otherwise excellent credit and the right pattern of purchases may indicate a company on the move, taking on new commitments as part of a growth strategy.
Lastly, credit scores and other risk models can help you decide the most appropriate sales approach. For example, an office furniture store might send a direct mail piece to one segment offering furniture rentals, while offering another segment furniture for sale. Based on the business credit score, the seller gains insight into which businesses are likely to buy as opposed to rent.
In short, business credit scores and other B-to-B models allow you to get more bang for your direct mail buck.