Oak Street Mortgage first opened its doors in 1999. Headquartered in Carmel, Indiana, a suburb of Indianapolis, it currently has 24 office locations across the country. Well on its way to becoming a leader in the industry, Oak Street Mortgage was founded by president and chief executive officer Steve Alonso. The management team at Oak Street has more than 100 years of combined experience. Each team member has a proven track record in lending.
The executive team understood the power of targeted marketing and database analytics as the primary vehicle to generate profitable loan volume. The challenges facing this team were disparate marketing campaigns across the branch network, competing branch versus corporate marketing initiatives and insufficient experience to construct a comprehensive marketing strategy. Overall, this was impeding the company's ability to optimize cost per booked loan.
A pivotal decision was made to establish a unique database marketing approach. A database was created, fully integrating all available marketing history from its acquired companies across multiple channels with the largest sources of atomic level data. This atomic data consists of individual and property level data in its most granular form at the transaction level. A dynamic analytic and campaign management platform was constructed that enabled executives enterprise-wide to access all product, channel, market, pricing, creative and offer data in consumer-centric views for dynamic decisioning. No longer a static marketing database, this platform is now able to support all marketing initiatives, ending disparate marketing and redundant costs. Just as important is that the executive team is able to assess performance and market potential under one set of metrics and elevate into a new planning process whereby budgeting decisions are now driven by performance to date, market opportunity and business capacity under one integrated approach. This takes Oak Street well beyond the sophistication levels of integrated channel marketing credit screens and nested modeling, into the arena of local market optimization on a national scale. Executives are now able to dynamically reconfigure the optimum mix of marketing spending, lending officer capacity and loan volume with point-in-time business objectives (i.e., revenues, loan volume, market share, etc.).
Already well along the way toward achieving its cost per loan (CPL) objectives, major shifts have been made in channel allocation, market selection and resource allocation, all driven by fact-based data decisions. Most importantly, all decision making is now integrated and proactive, across marketing, risk management and sales. The executive team is orchestrating a substantial growth in volume on a very clear path.
The measurements are all business performance indexes, as opposed to data or systems measurements. Data metrics (i.e., risk and marketing criteria, business rules and model scores) are established to support business metrics. Business metrics such as CPL, loan volume, total marketing budget, number of loans versus other loan generating budgets and number of loans are continuously tracked as marketing tactics are fine-tuned.
The final solution was an outsourced data warehouse of 180 million consumers, fully integrated with the Oak Street Marketing program, where each individual record is a consumer-centric view of demographic, lifestyle, credit and purchase behavior. The technology is SAS' suite of data warehouse software on a Sun 4500 Server, multiterabyte, remotely accessible platform. This was chosen because of the processing and querying performance SAS has been able to deliver, which directly translates to Oak Street's ability to make dynamic, fact-based decisions outpacing its competition. Oak Street is in a unique competitive position, having the most comprehensive national data warehouse of real estate data at their fingertips as they scale their business.
Additionally, the attention to detailed business rules has had the most dramatic impact on the day-to-day success of this platform. These rules are the basis for the data warehouse design. Done correctly, this translates to level of unsurpassed agility needed to compete in today's marketplace.
The two leading drivers of ROI have been reducing the CPL and shifting large volumes of direct marketing spending from lower performing to higher performing marketing tactics.
The Oak Street Mortgage solution includes:
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