DDM - Auto

Leading Auto Captive Lender Leverages Equifax Solutions

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Marketing Case Study for Automotive Captive Auto Lender Discovers Likely Financial Capacity of Consumers for New Electric Model case study Challenge: New Auto Model and New Target Audience, Yet Limited Insight on Interested Consumers A leading auto manufacturer was in the process of revolutionizing its lineup of cars and trucks. Its typical models featured speed and sporty styling and tended to attract younger buyers. Given the evolving consumer purchase trends in the auto market however, the manufacturer decided to refresh its product lineup. The manufacturer introduced a new family-friendly electric model which was targeted toward a different audience, "green, environmentally-aware families." Consumers that were interested in the new electric model could pre-order it with a deposit, even before seeing the vehicle. Dealers were unsure about the new model and the potential new customers. They knew they would have to make a significant investment to promote, stock, and service the new vehicle, since it was the brand's first electric model. In addition, dealers had limited knowledge about the profiles of the consumers who put down deposits, given the divergence from traditional buyers of the brand. Dealers wanted reassurance from the manufacturer and captive lender that consumers who were putting down deposits had the right financial profile to purchase the vehicle and if their demographics and behaviors matched the new vehicle's target audience. Solution: Gain Insight on Likely Financial Capacity and Persona of Interested Consumers The manufacturer's captive financing arm was asked to provide more information on interested consumers (deposit-payers) of the new model. The captive lender considered several third party providers to gain insight on the consumers. "We chose measures from Equifax because they were the only source that could provide us information on both the likely financial capacity and demographics of interested consumers," reported the head of credit risk and analytics department at the captive lender. "Other providers offered Automotive Company CHALLENGE An auto manufacturer and its captive financing arm needed to provide insight to dealers on the target audience of a new model to ensure effective sales, particularly since the target audience was significantly different from the typical buyer of the brand. SOLUTION The captive auto lender worked with the Equifax team to provide dealers with likely financial capacity and demographic information for consumers interested in a new electric model. RESULTS By using Aggregated FICO ® Scores and other measures to evaluate interested consumers, the captive lender was able to convince dealers that the financial investment required to stock the electric vehicle on their sales lots and to promote the new vehicle was worthwhile. They were also able to confirm that interested consumers were a good fit for the new model—they were likely to have higher aggregated credit scores, were less likely to be delinquent for auto loans, target audience.

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