Centex Home Equity - Predicting A Need (1,430 words)
"A strong database has meant a five-fold advantage in our ability to market successfully," says Rob Greenbaum, Centex's vice president of marketing. "When we solicit business from a prospect universe, there's a five times greater probability we will originate a successful response to a loan offer."
MITI's Scruton agrees that a strong database is of vital importance, noting, "The strength of the database has a marked influence on the growth of the mortgage lender." He adds, "This is an extremely competitive industry where the one with the best data and the marketing acumen to use it has a distinct advantage."
But just what is a strong database? "Fundamentally it is a database that is multi-sourced," says Greenbaum. "It takes into account that a single data provider can't be all things to all people. We view a multi-sourced database on two levels: First, no single source can bring together the highest quality of known homeowners. For that you need to bring together multiple sources of data. Second, you're going to need good demographic data and good credit data in order to build your predictive models. These data come from another source, not necessarily the same source as the home-ownership data," he explains.
All the data Centex uses in targeting its prospect universe are supplied through MITI. "They compile it from the credit bureaus, data compilers, census information and public records information such as tax assessor records and mortgage deeds," says Greenbaum.
Next, the data need to be matched together at a household level to complete the whole data set, which, Greenbaum says, gives Centex "the most robust database as a foundation for all of the direct marketing initiatives we do."
Of all the data used, Greenbaum says, the most powerful predictors of both response and risk are those obtained through the credit bureaus. "And we also look at homeowner data such as equity and length of home ownership," he adds.