Inventors: Oumar Nabe (New York, NY); David J. Fogarty (Riverside, CT), Ian R. Bell (Peebles, GB); Maria A. Karim (Singapore, SG); Rossen G. Valtchanov (Leeds, GB)
As described in the patent, known customer lead generating systems typically utilize random mailings based on archival data, with little or no attention to trending data or expected incomes. Known modeling solutions are inadequate, because a lifetime probability (a probability for termination in each month in the future of the loan) to prepay loans, described herein as early termination of loans, cannot be accurately computed. Without an accurate lifetime probability, accurate marketing decisions regarding whether the customer is to be offered a promotional or a consolidating offer cannot be made. While customers which would provide high expected incomes for the lender can be sent random mailings with a degree of certainty regarding success of the offer, the calculation of the expected income is only based on a rough approximation. A system without accurate expected income data or lifetime probability for termination does not provide sufficient data for lead development for acquiring new loan business.
Therefore, the present invention is directed to identifying and retaining customers who are likely to terminate an existing loan contract at a date earlier than the loan termination date identified in the loan contract are described. The method comprises using an early termination model to identify customers likely to terminate an existing loan contract at a date earlier than the loan termination date identified in the loan contract. By notifying those customers of new loan opportunities at competitive loan interest rates and attempting to cross sell those customers new loans, lost profits from early terminations are avoided by a cross sale or new loan offering before the customer early terminates their existing loan. Claim 1 states as follows:
1. A method for identifying and retaining customers who are likely to terminate an existing loan contract at a date earlier than the loan termination date identified in the loan contract, wherein the existing loan contract is provided by a lender that provides financing for purchasing a product by a customer from a dealer, said method comprising the steps of: storing customer data in a database including a payment history for each existing loan contract by the corresponding customer; using an early termination model to identify for the lender customers likely to terminate an existing loan contract at a date earlier than the loan termination date identified in the loan contract, the early termination model uses the customer data stored within the database; providing a list of early termination customers identified by the lender to the dealer, each customer identified by the lender on the list of early termination customers is a customer that satisfies the early termination model and is a customer the lender would like to retain as a customer; notifying the customers identified on the early termination list by the dealer of new products and new loan opportunities at competitive loan interest rates, wherein the new loan opportunities are provided by the lender to finance a future purchase of new products from the dealer by the customers identified on the early termination list; and cross selling the new loans to the customers identified in the early termination list before the identified customers terminate the existing loan contracts associated therewith.