A defi ANALYTICS Lost Sales Analysis can help answer the questions you think to ask, as well as the ones you haven’t thought of. An LSA eliminates the guesswork and lets you find out things like: Why do some applications you approve end up with your competition? How are those apps performing? Were you better off losing them? And what can you do to win more, and better quality deals?
Discover why your competition is winning deals.
See how your deal structures stack up against the competition.
Learn how external factors affect the loan process.
Find out how your lost apps are performing.
Armed with these insights, you’re able to reassess decisions, develop winning deal structures, and ultimately increase your capture rate of apps that will perform over the life of the loans. A Lost Sales Analysis can be invaluable to your bottom line. That’s why we’ve partnered with Equifax to make the process easy and cost effective for our lender community.
We do the legwork.
- We gather and format key data points for you quarterly.
- We decipher the data and present the findings to you.
- We help you better understand your dealers, and which of them are providing the best service to you.
- You save time and costs up to 900% as compared to working directly with a credit bureau.
You get the benefits.*
- Loan characteristics (LTV, APR, Term, Payment Amount, etc.)
- Loan performance (Current Status, Delinquency, etc.)
- Vehicle details (Year, Make, Model)
- Dealer details (Dealer Name and Address)
- Competitor details (Lost to Lender Name)
*Select states restrict the use of some or all data. Contact us for details.
Some of What We Offer…
Are you capturing applications that have a riskier deal structure within a given credit segment?
Are you capturing the best deals that when compared to your competitors could better position you with your bank partners/investors?
It’s important to understand the true value of the deals you are winning and losing. In the example below, we see that the lender is capturing deals that have a higher LTV ratio and, conversely, losing deals that have a better LTV ratio across the credit spectrum. This trend demonstrates that the lender is not offering competitive pricing and might be capturing a riskier portfolio.
Deal Structure Analysis
Which, if any, external factors (such as dealer service, dealer discounts, etc.) are playing a role in your sales lost?
By comparing the structures of the deals a potential competition is capturing against the deal structures you are offering, you can get a better sense of what your dealers want. In the Deal Structure Analysis, we will look into parameters such as APR, monthly payment, loan term and amount financed in understanding the strength of your offer versus the final structure that the consumer accepted.
This graph below shows that even though the lender has been offering a better APR to the end consumer across all credit tiers, the lender is not winning the deals. If the same trend followed for payment and term, it could mean that the dealer discounts offered are not competitive.
You can get a read on your dealers if they are sharing the right information with your sales representatives about who you are losing your deals to. Additionally, you can share with your dealers who they are losing customers to. The back and forth sharing of information between you and your dealers can be an important step in improving your overall relationship and helping them be more efficient. The graph below shows:
- The deals the lender lost where the consumer ended up buying a car,
- The % of customers that ended up with the same dealer vs. the % of customers that ended up with a dealer in the region.
You can lose the deal for multiple reasons, but how many of the customers are ending up with a similar collateral at the same dealer or a different dealer.
It would be useful to understand if the collateral that the consumer ended up with is the same one shopped for with you.
This graph below indicates that the customers that were shopping for cars in the $14k to $16k range, but actually ended up buying in the lower prices ranges.
DATA STUDY ANALYSIS…
Sample Data from Multiple Actual Lenders
In a recent defi ANALYTICS LSA study that used the combined data of multiple actual lenders, about 55% of the lost sales applicants successfully obtained a loan from a lender other than those involved in the study.
During the analysis, we “got hits on” about two-thirds of those apps, meaning we were able to identify through the Equifax IHS data the purchased vehicle and selling dealer information.
Hit rates vary slightly by U.S. state and region. On average, the Equifax hit rate is slightly higher on East Coast (60%) as compared to the Midwest (50%) or West Coast (45%).
Using the sample data, we found out that the annual percentage rate (APR) offered by multiple actual lenders was insufficient to borrowers. As you can see in the accompanying chart:
- Even when the approved APR was lower, the deal was lost to a higher APR. The implication is that the dealer discount was, most likely, not competitive in those buckets.
- However, even in the higher-score buckets, the APR was not competitive enough.
In this study, the deals were lost through two separate dealerships:
- 30% through one dealer,
- and the remaining 70% through another.