Will a Data Warehouse Solve my Data Problems?

Part two – The answer revealed

Have you ever completed a word search puzzle by first attempting to find all of the words, and then comparing your list of found words with the one that was provided? Of course you haven’t.

The same simple approach applies to solving data problems. You have to truly know what the issues are before you go about fixing them. (Hint: Building a data warehouse is not always the right solution.) Do your homework. Understand your problems before looking for the answers. This is what defi CEO Stephanie Alsbrooks challenged you with in part one of this article in the January/February 2017 Non-Prime Times issue.

We often hear about how a technology solution is doing wonders to fix someone else’s problems. However, their problems may not be your problems. Even if they are, you should ask yourself, “What’s the ROI? Is the existing cost of my problem greater than the implementation, maintenance, and operational overhead costs of the solution I’m considering?” If not, then you may be solving for the wrong problem or attempting to solve the problem with the wrong solution.

Hopefully, you took Stephanie’s advice and did your homework. What should you do next? Well, it involves prioritizing the problems you identified, evaluating potential solutions, and determining which solutions, if any, to implement.

I recommend you start by changing the way you see your problems. When you’re looking for technology solutions to fix business problems, it’s really helpful to think of your problems as the absence of a capability.

Let’s say one of the problems you’ve identified is fragmented, siloed and disparate data being utilized by different groups across your organization. Marketing’s reporting tool may have Metric X coming from Database A, while Customer Care’s reporting tool may be pulling the same metric from Database B. This can cause a clear problem when various business units are operating from business metrics with potentially different values. These data discrepancies are typically caused by differences in load or transformation logic between the two databases or reporting tools. To fix the problem, you may, for example, simply force Marketing to use the same reporting tool as Customer Care. Fixed, right? Sure, unless Finance begins using that same metric in a third and different way next week. But what if they do?

In this example, you ultimately want to address your lack of a single source of truth, a practice of defining a single, trusted, universally agreed upon version of all key data points that are driving business insights. By viewing the problem as a potential capability absence or gap, you focus on defining single sources of truth for each key data point across your enterprise, not why Marketing’s metric X is different from Customer Service’s metric X.

Now, let’s go back to the task of prioritizing your problems, or what we’re now calling capabilities. We’ll use something called a Capability Maturity Matrix. Sounds complicated, but it’s simply a way to visualize capability gaps relative to one another. A Capability Maturity Matrix will help you:
1) Visualize the current state of your capabilities, relative to one another.
2) Visualize the desired state of your capabilities, relative to one another.
3) Visualize the largest gaps between current and desired state.


In the matrix shown above (Graph 2), the biggest pain point is the single source of truth capability. Why? Because the capability doesn’t exist today and it has the farthest to go to reach the desired “Tomorrow” state. In this example, scalability is also a capability that doesn’t exist today.

Data Warehouse Solve my Data Problems 2

However, since there might be a relatively shallow volume trajectory, there’s not an immediate need for this capability to be fully mature.
Once your capabilities have been prioritized, solutions come into play. Solutions can be simple, complex, or everything in between. This is where a knowledgeable and trusted technology vendor might be of help. And with any technology solution, the decision to implement almost always boils down to Impact and Benefit versus Initiative and Effort — Cost versus Benefit or ROI.

How does a solution like a data warehouse address the Capability Maturity Matrix we examined? Does having a data warehouse address a single capability, several or none? Of the capabilities the solution addresses, what will the matrix look like after we’ve implemented it? Evaluating where the solution falls on the scale of Impact and Benefit versus Initiative and Effort becomes easier when you consider potential solutions this way. (Graph 3)

Data Warehouse Solve my Data Problems 3Whether you’re bolstering your operational reports in Excel or building out an enterprise data warehouse, understanding how to view your data problems, the root capabilities behind your problems and how the proposed solution is expected to mature that capability is paramount to success. You need to accurately quantify the benefit of maturing a given capability as well as the costs of implementing and maintaining the solution that furthers that capability.

A data warehouse might be the right solution for you. It might not be.

But what’s important is that you know how to measure and evaluate problems, capabilities, and solutions relative to one another, and ultimately quantify implementation success, instead of searching for a problem to the solution you already have.

In other words, you need to check the word list before you begin the word search.

Brandon Burns is the director of data and analysis for defi ANALYTICS, the new flexible analytics and reporting platform from defi SOLUTIONS. Founded by Stephanie Alsbrooks, the defi platform now includes defi ANALYTICS, defi SERVICING, defi DIGITAL, and, of course, the popular defi LOS. Email Stephanie at salsbrooks@defisolutions.com or Brandon at bburns@defisolutions.com.

Technology Partners – Blissfully Ignorant or Painlessly Aware

One of my favorite books is The Book of Questions by Gregory Stock. It’s a tool for improving relationships. It poses hundreds of questions on random subjects and gets people to explore and explain how they feel about things they may never have thought of. In my experience, there is one question that people always seem to choose. It is something like “if your significant other was out of town and had a fling that meant nothing to them and you would never ever find out about it and it wouldn’t impact your future, would you want to know?”

Technology PartnerThe responses are always varied and they always get a reaction—from “heck no, you did it, you deal with it” to “100% yes, a relationship is built on total trust and complete honesty.”

Would you care? Or have an opinion on which type of person you would want to be in a relationship with?

I believe that picking a technology partner is a little like picking a personal relationship partner. Choosing someone you are on the same page with might be critical to you – whether you prefer Beyoncé or Bach, first-class or coach, vegan or paleo. Or, it might not be an issue at all. Preferences are neither wrong nor right. What’s important is that you understand your partner’s preference. It’s the same with transparency and which a person prefers.

Here’s the top 10 from My Technology Book of Questions that I think you might want to explore when considering company transparency and your vendors.

1. If your vendor offered you a SOURCE CODE ESCROW would it matter to you?

The source code escrow requires the vendor to regularly deposit their code with a third party, so if certain trigger events happen you have the option to take the code and keep your business going. It may give you peace of mind that they aren’t going to walk out on you tomorrow and that you won’t be forced to jump before you are ready. But if you know you will never really take the code and use it, if you feel the company was unlikely to trigger an event that would cause this, or if you would rather just move on to another partner if they did, then you might not care.

2. Is it important that your vendors, even privately held companies, release their FINANCIALS to you?

If FINANCIALS are a requirement of vendor management, this may be critical for you. If you are unsure about the management of the company, you may care. Without the pressure of vendor management and if you are comfortable with the company’s history, and more importantly its future, this may not be an issue.

3. How important is it that your partner makes their OWNERSHIP STRUCTURE clear – if it’s the founders in charge, or private equities or venture capitalists that have majority ownership?

The company’s structure could give you insight into any positive alignment, or conversely, the likelihood of any future potential conflicts of interest. (Or the possibility that the people you trust will be booted out.) However, you may firmly believe no one can predict the future and knowing the ownership structure won’t give you that ability either.

4. Every vendor’s system has uptimes and downs, and challenges with internet providers or integration partners that could impact the system’s health. What if your vendor doesn’t clearly share the HEALTH OF ITS SYSTEM to keep you updated and you are always wondering – does that matter?

If you like looking at data and information, and being in constant communication, then seeing a vendor’s Status Page might be critical to you. But you may already have too much to focus on. Or you may be comfortable with calling the support line if there’s a problem or relying on your vendor’s technical team to call you if something should happen. In these situations, this type of information might be too much for you to deal with.

5. PRICING can be a sensitive topic. Which do you prefer: a vendor that gives transparency about their pricing, with everyone receiving similar deals? Or a vendor that negotiates to the point that the next company that comes along might be paying substantially more or less than you?

For some, the negotiation is all important and the deal other companies receive isn’t relevant. For others, knowing there’s a basic pricing structure and that other clients are paying similar prices gives them the assurance that the price is fair in the marketplace and they can set a budget and achieve their goals.

6. Every company has a ROADMAP. Some are more fluid than others. Is your vendor partner’s roadmap documented and shared with you? Do you care how they create their roadmap and do their planning?

Insight into planning and roadmaps may show how a company’s leadership thinks and prioritizes. But, if the system “as is” meets your needs and you don’t see those changing, then what the roadmap looks like and how is was created might not be that important.

7. Do you have great IDEAS and want your vendor to listen to them? Do you care about what other clients are thinking? Or if your vendor and their clients might agree with you?

For some, the transparent sharing of ideas and receiving feedback on them can give valuable insight into what others are doing and finding important. But you may get the answers you need in another fashion and not be concerned that anyone else sees or agrees with you.

8. Does the vendor have a COMMUNITY you can take part in for full transparency of questions related to system functionality?

If constant improvement is important. If having a place to ask questions and get details matters and you’re involved in making your business better each day, then a community might be key for you. However, not everyone wants or relies on community. If you’re not going to get involved, search for articles, look for ways to improve and actively engage, maybe this isn’t a critical item for you.

9. Does your vendor reveal RELATIONSHIP CHALLENGES? When something goes wrong, do they hide it or try to avoid telling about it?

For some, the past is the past and what’s important is how the company is going to deal with challenges in the future. For others, the past is an indication of the future, and they want to be completely aware and fully informed of both the good and bad that has taken place.

10. Do you want to hear your vendor talk about their STRENGTHS? Even when maybe it seems they go on and on and on about what they’ve been up to and what is going really well.

For some, a vendor’s happy stories are an indication of their confidence in their ability to deliver a product that contributes to their success and yours! But maybe you’re not one to dwell on your vendor’s other successes and would rather judge their strengths solely on their contribution to yours.

Stephanie Alsbrooks is the CEO, founder, and c-through specialist at defi SOLUTIONS, the most configurable loan origination platform on the market. E-mail Stephanie at salsbrooks@defisolutions.com.

Choosing a Lender

by Scott Brackin

creditmailIn the presence of fierce competition and razor thin margins, it’s more important than ever for dealers to look for lenders who are engaged in innovative ways to protect risk, while providing the best in class service levels for the dealership and the consumer.

Dealers understand non-prime consumers are on extremely tight budgets. Would-be customers walking into the showroom already know exactly what monthly payment they can afford.  To accommodate these potential buyers, dealers rely on lenders to help provide the right interest rate and term. Historically, lenders have relied primarily on the Big 3 bureaus, however those bureaus have limited information on non-prime consumers. Most dealers know that millions cannot be scored. Per the CFPB, 45 million U.S. adults are living without credit scores due to no credit history, limited data or out of date credit data with the Big 3 bureaus. There are also nearly 90 million adults with scores below 650 and that number is just going up.

Top lenders are innovating and learning alternative data is shedding more light on these thin-file, ghost consumers to help them better assess the risk and offer more flexibility in pricing. To be competitive, dealers must work with those lenders that employ all available information —specifically alternative data—to provide a more complete picture. By utilizing lenders that have access to alternative data on those consumers, dealers will sell more cars, minimize buybacks and help to build better customer relationships.

passtimeWhat is alternative data?
Just as the label implies, alternative data falls outside the scope of the Big 3 credit bureaus and includes public and private records procured from governmental and institutional sources and is accessible via third-party aggregators. Alternative data sources could include records from public files, utility and telecommunications companies and others.

From public records, one may access an immense amount of data regarding a consumer’s property ownership, bankruptcies, liens or judgments and relationships. Public records provide asset and adverse action information that may be modeled. Another source of alternative data is tradeline information that offer access to application inquiries, loan performance and consumer stability details. Alternative tradelines provide past loan payment behavior and an understanding of outstanding debt. At the end of the day, what you are looking for is a lender that has a complete the picture of someone’s ability to afford the automobile.

Move more metal
Lenders that leverage alternative data have deeper information on consumers’ buying behavior. These lenders will provide a pricing advantage over those who are not accessing alternative data.

For example, a lender who uses short-term tradeline data will have information on whether or not the consumer has taken out or paid off any short-term loans. Paying off short-term loans correlates with reduced risk. Specifically, borrowers with three or more paid off short-term loans in the prior year have a 33% lower than average auto loan bad rate – an improvement three times as large!

This information of a lower default rate translates directly into pricing power and the ability for dealers to close more sales.

automotive-personel-200x300Better buying experience
Lenders using alternative data have information enabling them to quickly verify information online, reducing some of the manual verification process. Such services include identity verification and information on the consumers’ stability that correlates directly with risk. Often lenders will access alternative data to verify income, employment and ACH events. When successfully implemented, these services make the funding process more cost-effective for the dealer.  As a result, the experience is also faster and more efficient for the buyer.

Alternative data providers have built a business around collecting unique quality data from a variety of less traditional sources.  The buzz is this data is quickly becoming more mainstream with auto lenders. When choosing a lender, find out if they are using alternative data, what types of data and how they are using the data to help them more accurately assess risk and price the loan.

Lenders leverage alternative data to take a “closer look” at prospects and build a win-win for the dealer and the consumer. Not only will it allow dealers to be more competitive, resulting in more sales, but it will also allow the consumer to be able to afford the vehicle their credit really deserves. By meeting their needs quickly the first time, this will undoubtedly bring about repeat business.  A true win-win-win for the dealer, the consumer and the lender.

Scott-BrackinScott Brackin is the automotive practice segment leader for FactorTrust. Scott has more than 24 factortrust-200x300years of experience in financial services, credit risk data, and technology. Since joining FactorTrust in 2013, he’s overseen the company’s rapid growth in the automotive segment as part of his vision to become the premier alternative credit reporting agency (CRA) and analytics business for the automotive finance industry.

What do Employees look for When Changing Jobs -– and How Can You Benefit?

by Don Jasensky

In the past quarter of a century that I have been recruiting for automotive dealerships, there are the five aspects of candidates’ employment that are brought up most often when looking for a job change:

• Day-to-day work content
• Career visibility/opportunity
• Location
• Compensation
• Security

So how can you use this criteria to your advantage? Find out what is most important to your top candidates and appeal to those needs when reasonable.

factortrust-200x300Case study: We were helping an auto dealer of a very large Ford store. He needed a rock-star service director.  We found three great candidates. Two were from out of town and needed to relocate, and were willing to do so. The dealer was willing to cover relocation expenses. The third candidate lived across town, about an hour commute each way. He did not like the long drive, but did not want to move closer to the dealership.

We suggested to the dealer that he offer the candidate with the one-hour commute the following:

• Salary that was agreeable to all

• Flexible hours – understanding that the service director needed to be there at 6:30 am to open up, but allow the flexibility of leaving early in afternoon sometimes to see his kids’ baseball games, dance recitals – all the things he had been missing his entire career. Keep in mind, “rock star” employees are very hard workers by nature and are not likely to take advantage of this benefit.

• A company car and gasoline. In the grand scheme of things, what is the cost to use a company car and gas compared to the revenue from a huge Ford service center that is run by a “rock star”?

Results: Win-win for the auto dealer and the service director. The ability to occasionally see his daughter’s dance and piano recitals and his sons’ sporting events made him feel so respected and in turn made him the most dedicated employee you could imagine!

Lesson learned: Ask candidates what is most important to them when considering a job change and if at all possible, appeal to those factors when making an offer.

Don-Jasenskyautomotive-personel-200x300Donald Jasensky is the founder and CEO of Automotive Personnel, LLC. It is in its 26th year providing executives, managers , and sales professionals to the automotive finance, aftermarket and automotive dealership industries. 800-206-6964×21, don@automotivepersonnel.co, www.searchpro1.com

Is your GPS Device Really 3G?

By Jeff Karg
factortrust-200x300With 2G GSM towers sun-setting on a weekly basis, coverage for GPS devices on the 2G network is shrinking in areas across the country. If you think this is simply a rumor, just Google “AT&T 2G” and take a look at the top results. On the AT&T website itself you’ll find the statement, “AT&T has announced plans to sunset its 2G network by approximately January 1, 2017. As AT&T progressively frees up valuable spectrum for its mobile broadband networks, we may conclude that some markets or territories may need to sunset 2G even sooner.”  1

We know that the carrier and its roaming partners has in fact sunset certain markets already and will continue to do so throughout the next 18 months.

automotive-personel-200x300While it is true that T-Mobile is going to continue supporting its 2G network longer than AT&T, the question is: after AT&T’s network is gone, what does the T-Mobile network look like without the ability to roam on AT&T?

Anyone who tells you that 2G is here to stay is, at best, basing their claim on a technicality; one which will not serve you well if you are outside of T-Mobile’s native coverage.

Moving to 3G
Although 2G is not gone yet, the prudent long-term plan is to move to a newer technology, like 3G.  Maybe you are already buying 3G…. or you think you are.

creditmailUnfortunately, many dealers and lenders in the market who thought they were buying 3G GPS devices are actually still, unknowingly, receiving 2G devices. Whether it is a misunderstanding or something more deliberate, many customers of GPS devices have come forward indicating they thought they were buying 3G, when in fact they were not. Consequently, you may want to check the GPS devices you are currently ordering to make sure you are really on the 3G network. By putting it off, you may find yourself in the dark, at a time you least expect, nor can afford. 

It may not be easy to determine which device you are using by just looking at it. However, your device provider should be able to match the model of the device in your hand to certifications that show the device is utilizing 3G technology. This documentation is readily available to your device provider and can easily be given to you. If your device provider is reluctant to supply you with this documentation, there may be a reason.

PassTime, a leading provider of GPS devices is a Verizon Partner Program Member for its GPS devices in the BHPH and sub-prime lending spacing. Its devices utilize Verizon’s 3G network. Documentation of certification of its devices on Verizon and 3G are available upon request.

Should you have any concerns or questions about your device, contact PassTime at 877-727-7846 or info@passtimeusa.com.

Jeff-Karg-HeadshotpasstimeJeff Karg is the Director, Corporate Communication, at PassTime.


Pull the Trigger to Higher Sales

by Denny Long
passtimeI have heard a story about a dealer in the ‘60s or ‘70s who would perch on top of his dealership with high-powered binoculars recording the license plate numbers of vehicles that were shopping at his competitor’s stores. Back then in his state, you could buy a list of the license plate numbers and learn the name and address of each registered vehicle. He would then grab the phone book and call these consumers to let them know that he offers better deals, better vehicles, and better financing. This dealer became very successful and a true legend in the car business. Could you imagine doing that in today’s world?
Well, in reality, you can! And you don’t need to perch on top of your dealership or use high-powered binoculars. And it’s perfectly legal – it’s even encouraged as a benefit to consumers.

factortrust-200x300We know that all dealerships are not created equal when it comes to helping consumers with sub-prime credit. Most dealers don’t have the lenders, inventory, or knowledge to help these people. We also know that every day, sub-prime consumers walk into the wrong dealership and are told they have bad credit and cannot be helped. Many of these consumers believe that they will hear the same thing from every dealer so their search for a vehicle ends. If you are the dealer in your market that has the right stuff for these sub-prime consumers, you’re in luck. Can you imagine knowing when every sub-prime consumer in your market has their credit bureau report viewed by an auto dealer, bank, lender, or credit union for automotive financing purposes? It is possible!

It’s called a Trigger Program because when the consumer has their credit bureau pulled, it will trigger a notification that this consumer is in the market. Every morning a fresh list of these shoppers becomes available. This is the most targeted list of in-the-market consumers available and the response rates prove it. As most of you know, you are lucky to get a 1.0% response rate on a typical direct mail promotion. It’s not unusual to see response rates from a proper Trigger Program run between 5.0% and 12.0%. It takes the right program with the right processes to get response rates like this.

automotive-personel-200x300Many of these consumers also have listed phone numbers that are not on the National Do Not Call List. These consumers can be called by a professional call center, which means you are communicating with them the day after they shopped and were possibly told “no” to financing. When these consumers receive a call telling them, “Congratulations, you’ve been pre-qualified for automotive financing at a dealership near you,” the consumer thinks, “These idiots don’t know I was just turned down yesterday.” So many say, “Yes, I want to hear more about this offer.”

Another key is that the mail must go out every day. You can’t wait and mail these people weekly. First class postage is also a must to get the mail in their hands as quickly as possible. These are valuable prospects so the mail piece should be high-quality and high-impact.

If you use the right provider for your Trigger Program, all of this is handled for you. You just handle the leads as they come in and do what you do best – sell vehicles! A properly handled Trigger Program always delivers results. As one of my clients stated, “This is the second best lead you can get with the first being a customer that’s already in your dealership.”

So now that you know that this great program is available, it’s time for you to pull the trigger to higher sales. Good luck and good selling!




denny-longDenny Long is president of Credit Mail Experts. creditmailHe has over 30 years of experience in the automotive industry and is known as the top expert in sub-prime marketing. Denny has written hundreds of helpful articles that have been published in World of Special Finance, Auto Dealer Monthly, and the BHPH Report.