WFHM - Campaign Analysis

The Case:

To analyze the results of a recent mail-only outreach effort by Marketing. The

campaign consisted of existing WFHM borrowers, prompting them to take advantage
of currently low interest rates The sample of eligible borrowers was split into three
groups: Champion, who received the “basic” letter; Challenger, who received a letter
with a newly developed creative; and Hold Out, who did not receive any letter
Response data:
# Borrowers Challenger Champion Hold Out Total

Total Base 10,845 10,867 3,288 25,000

Total Responders (I + R) 442 462 89 993

% Responders 4.1% 4.3% 2.7% 4.0%

Responders (Retail only) 420 424 83 927

% Retail Responders 3.9% 3.9% 2.5% 3.7%

Loan Funded 256 233 53 542

% Loan Funded (% of
applicants) 61% 55% 64% 58%

 The percentage of Responders in the mailed group was better than that in the hold-out
group, however, there was not a significant difference between the Champion and the
Challenger groups
 There was a higher percent of loans sanctioned in the Challenger group vs. the Champion
group
Who are the responders?
Rate Benefit
The Challenger group has
32% 30%
39% applicants with higher rate
benefit compared to the
champion group, and this
40% 40%
36% behavior is in line with the
holdout group
27% 29% 25%

Challenger Champion Holdout

> 1.75% 1.25% - 1.75% < 1.25%

Months Remaining:
Both the Challenger and the Champion groups had similar borrowers in terms of the
number of months remaining in their existing loan, however this distribution was
different in the holdout group where there were a concentration of members who fell in
the higher ranges of months remaining in their existing loan
Who are the responders?

 LTV: Only 43% of Challengers have <0.85 LTV vs. 50% in the Champions group

 All the borrowers opted for the ‘adjustable rate’ loan

 FICO scores of the borrowers in the challenger and champion groups looked similar

 Marginally higher percentage (6.8% vs. 5.2%: responders; 6.9% vs. 3.5%: funded

applicants) of the Champions group had borrowers who defaulted in the last 30 days

 47% of the borrowers from the challengers group applied through call center vs. 50%

in the champions group

Key Insights and Recommendations

 At the face of it, this campaign shows similar results in both the challenger and
the champion groups with a better success rate1 in the challenger group
 The newly developed creative is attracting same / similar number of borrowers
as the old creative did, however, the profiles of the borrowers is marginally
different. For Eg: the challenger group has borrowers who had higher rate
benefit, had lesser LTV rate, etc.
 However, not all the groups mentioned above (point 3) when targeted could be
beneficial, as some of these are true for the generic group
 Using differentiation model we could achieve better results of targeted mailing –
identify the group which gives a signification gain and thus improving the
positive impact

Success rate1: Loans sanctioned