The Myth of Lost Home Loan Opportunities

Posted by on June 26th, 2014

Response Scales Since mortgage refinancing has fallen from its 4Q12-2Q13 peak, the concern from our financial institution (FI) clients is that the opportunity to capitalize on home loan opportunities has passed them by. Fortunately, that’s just another recent financial myth.

Consumers will continue to need home loans regardless of interest rates, as they move, expand their families, adjust to empty nests, retire, etc.  Even when mortgage interest rates were twice their current level, financial institutions flourished. Record low interest rates over recent years have spurred refinancing that otherwise might not have been as appealing to homeowners in the past, but new homes will always be a necessarily.

So while the percentage of total home loan originations has indeed shifted from mainly refinancing to new purchases, is it not true that total opportunities have dried up? Actually, with home equities in the mix, the picture actually gets rosier.

Equity is coming back and, when available, is always a good source of funds for FIs mostly because those loans are highly secured. Also, home equity loans are usually kept in portfolio rather than sold like the majority of 15+ year fixed rate mortgages, giving banks and credit unions large monetary loans to even out their balance sheets.

Datamyx, a leading provider of risk-based, data-driven marketing solutions specializing in the financial industry, compared total home loan applications from the three credit bureaus from July 2013 to June 2014 to find that despite the decline in home loan refinancing over the past year, a significantly larger percentage of consumers are actually shopping for home loans (new purchases + refinancing + home equity loans/lines) this year. An additional pleasant surprise is that the percentage of total loan shoppers who are generally home equity qualified (defined as FICO 680+ and LTV<70%) also increased this past year.

The newly installed Fed Chairperson, Janet Yellen, has shown a commitment to maintaining today’s short-term rate environment over the course of the year.  Lower rates will continue to prop housing demand and ensure that the refinance market does not dry up. Mortgage Bankers Association’s Mortgage Finance Forecast projects total mortgage originations for 2015 to be 15% greater than in 20141. Add in the contributions of increasing equity as home values continue to rebound and lenders will be met with a glut of demand and will rely on data driven marketing solutions to help target the higher quality loans for all types of home loans – refinancing, new home purchase and home equity.

1. Mortgage Bankers Association, Mortgage Finance Forecast


Increasing Productivity At Work

Posted by on June 25th, 2014

We live in the digital age where everything is moving faster and faster. Our workloads are increasing while our time is decreasing – The result is more stress. It’s a widely accepted opinion that overwhelming, ongoing stress is extremely detrimental to your health and productivity.

With all of our mobile devices, apps and digital toys, how is it that we can’t seem to get better at managing our workload? Sometimes, you have to look to great leaders and managers of the past to find an answer. When it comes to managing your workload, and stress, the best solution is “The Eisenhower Matrix.”

Made popular by Dr. Stephen Covey, it’s actually attributed to our thirty-fourth president Dwight D. Eisenhower. This method of managing action items is deceptively simple and helped “Ike” cope with the overwhelming tasks he faced as a five-star general, the Supreme Commander of Allied Forces in Europe and later as President of the United States of America.

To use this matrix, start by making a list of all of your pending items and sort them in the following order:

1: Urgent and Important – do immediately

2: Not Urgent and Important – do next and plan when to do them

3: Urgent and Not Important – delegate to others or do later

4: Not Urgent and Not Important – do last/not at all/delegate to others

Visually, it looks a lot like that:

Eisenhower Matrix

The key to using this matrix is to remember that there is a limited amount of time each day and, since, you can’t do everything in one day, you must prioritize your tasks. This will enable you to reduce the stress caused by one large pile of “to do” items versus tasks organized into the most productive battle plan.

It’s important to learn the difference between things that are important and urgent versus not. A common mistake is to address those things that are urgent, but not important, before items that aren’t urgent, but are important. Doing the former causes you to fall behind on things that should be focused on sooner.

As Eisenhower once said, “What is important is seldom urgent and what is urgent is seldom important.” Words to remember as we face the daily onslaught of tasks competing for our time and resources.


Get To Know Your Gen Y Customers

Posted by on June 18th, 2014

Response ScalesBrands are looking for the most efficient and effective ways to communicate with the next generation of shoppers. These customers who were raised with the internet and quickly embraced all facets of digital media – Gen Y. Because information is always just an arm’s reach away for this segment, they have become accustomed to a constant stream of marketing messages coming from multiple channels and therefore have found ways to only consume the media they are interested in.

This has presented a problem for marketers in all industries. Brands cannot totally dismiss incorporating marketing best practices to support efforts such as building brand loyalty, optimizing the customer experience and increasing engagement, but must also focus on personalizing and sending individualized messages. This means that the brand’s communications must be highly targeted and provide accurate and relevant content that is useful and informative.

Currently, Gen Y consumers are a population that cannot be ignored. Not only is this group large, 86 million people, but these men and women are more technologically advanced than ever before, and they are connected to each other via social media channels like Facebook and Twitter. It is estimated that 74% of adults between the ages of 24-34 own a smartphone and utilize multiple communications platforms and devices per day1.

These trends toward increased mobile adoption have forced marketers to define and utilize the most effective tools to help treat their customers as individuals. They must find a way to break through the clutter and speak to their customers on a personal level. The focus needs to be on using advanced analytics for a deeper insight into the customer journey meaning all online and face-to-face interactions that customers have with a brand must be examined. It’s more than just browsing and clicks on a website, it involves email, social media, one-on-one interactions, and local search.

As Gen Yers start to slowly take over the marketplace, brands must pay special attention to online interactions in a holistic way. By tracking all facets of online behavior, brands can learn what consumers are thinking about at that moment in time. From there, messages can be tailored to speak directly to someone specifically. As more data is collected, the more developed the customer’s profile becomes, providing an opportunity for marketers to leverage all of that data in a way that promotes brand loyalty.


1. Doherty, Jaqueline. (29, April 2013). On the Rise: A Lost Generation? No Way.


Response Scale Fundamentals

Posted by on June 13th, 2014

Response ScalesWith all my recent blogs about survey essentials, I realize that I’ve never really summarized my suggestions and views on response scales. Choosing the right scale is critical, because you can’t word the survey questions correctly without knowing which answering scale you should use.

As a rule of thumb, always pick the answering scale BEFORE you write the survey questions. If you don’t, you’ll have major headaches matching all your survey questions to one single response scale.

In opinion research, the most common response scales are:

Interval Scales (also called Continuous Scales) – Associate certain attributes with ordered equal intervals (referred to as points on the scale). Most interval scales use between five and seven points (for example: agreement, satisfaction, importance, frequency, etc.). Likert Scales are considered an interval scale.


  • Nominal Scales (also called Categorical Scales) – Use labels for unordered characterization. Demographic questions are examples of nominal scales (for example: job title, age, tenure, department, etc.).
  • Semantic Differential Scale – Only the two outside points of the scale are labeled (for example a 10-point scale with ‘Extremely Satisfied’ and ‘Extremely Dissatisfied’ as the top and bottom choices.) Mid points are not labeled.
  • Dichotomous Scales – Dichotomous scales offer two response options (for example: “yes or no”).
  • Ordinal Scales – Ordinal scales use rank orders (for example: number in order of priority or preference.)

Interval Scales – Most Commonly Used Scales

Likert Scales are often the most common Interval scales– A typical Likert scale has five to seven-points in which the interval between each point on the scale is assumed to be equal. Likert scales should have an equal number of positive and negative choices and usually has a neutral mid-point. If the neutral point of the scale is eliminated, then it becomes a ‘forced-choice scale’, but will still have equal number of positive and negative choices.

There are a few guidelines to create valid Interval/Likert Scales. A general rule is when deciding the number of answering options, use the smallest number that satisfies the need for:

  • Variance – are there enough choices? Usually this is between five and seven choices. Some statistical analysis needs more than four choices to produce useful output.
  • Discrimination – can you tell the difference between choices? At some point, it becomes impossible to really delineate the difference between the response choices. This is why good scales seldom go over seven points.
  • Accuracy – do the labels accurately describe the choices? Each point of the scale should be labeled, which increases the chance that each respondent will interpret the scale similarly. Labels should be created that feel evenly spaced in the continuum, since they will be numbered 1 to 5 (or 7).
  • Symmetry – is the scale balanced appropriately with equal number of positive and negative responses? Using a neutral point is optional, but keeping the scale balances is NOT.

Here are examples of commonly used five-point Interval Scale:

5 Point Scale

Here are the Agreement and Satisfaction scales expressed as six-point Interval Scales (forced choice):

6 Point Scale

Here are the Agreement and Satisfaction scales expressed as seven-point scales:

7 Point Scale

See my blog from 1/8/14 “Dilemma of the NA/Don’t Know Response Option” to learn more about how to use Not Applicable and Don’t Know in the scale.

Lastly, ‘classic’ Likert scales start with the most negative choice on the left and then move to the most positive choice on the right. In reality, I prefer starting with the most positive response, as I’ve shown above. It’s most important to remain consistent within a survey, regardless of whether you start with the positive or the negative.


Mobile Marketing – Increase Your Potential Reach

Posted by on June 10th, 2014

Mobile MarketingIn today’s fast-paced society, time is of the essence. Whether we jump online to find the quickest way to get from Point A to Point B, check an account balance, or access the latest news story, digital technology is a means to get us there faster. As consumers, we operate under the same mentality as the demanding Veruca Salt of Willy Wonka’s Charlie and the Chocolate Factory… we “want it and we want it now!” and in the format we want it in.

Today, companies face the challenge of providing a platform for consumers to access the information they need in the most convenient way. With several avenues to choose from, companies can now increase their potential reach by creating a responsive mobile site and/or offering a downloadable app. These options provide companies with their very own chocolate bar wrapped with a golden marketing ticket.

Mobile websites share a single URL with their parent website, offering information from the entire site through a consumer’s smartphone. This is beneficial for consumers who may not know exactly what they are looking for. Access to the full site on a mobile device can also ensure that consumers do not feel like they are missing out on any information, feature, or functionality that may not be available on a reduced app version. Mobile sites have the capability to display real-time updates to content – through text, video, or images, which allow companies to share the latest information they have on their website straight to a consumer’s smartphone. Also, mobile sites have lower developmental costs and offer a less expensive marketing plan, minimizing affects to lower marketing budgets.

If the consumer does know exactly what he/she is looking for, a downloadable app can provide information through a single button allowing said consumer to access what he/she needs instantaneously.  Through an app, a consumer can access personalized information, such as a bank account, without having to log in to the website. Apps can be searched for in an app store allowing companies to increase brand awareness and discovery, and consumers can personalize their mobile experiences by utilizing app potential to incorporate other smartphone features such as camera or video.

While the mobile site vs. app debate is ongoing, both options offer companies the same end goal – providing readily accessible information to the consumer on a device other than a personal computer. Whether the consumer chooses to use the mobile site or an app, he/she is able to rely on the convenience both options deliver – accessing the information he/she needs, right when he/she needs it.