How a digital transformation helped this CMO generate $6m in incremental business

Stratton Finance CMO shares the transformation that's not only brought customer lifecycle marketing to life, but has also led to a new digital product building new customer audience acquisition

­­­Stratton Finance has secured $6 million in incremental loan financing business and opened up two new customer segments just one month after launching a complete end-to-end digital product offering.

The car financing company, which is part of the Carsales group, kicked off a holistic transformation effort two years ago, a move sparked by serious changes proposed by ASIC to the industry’s flex commission schemes to cap commissions and bring more transparency and fairness to customer financing.

Stratton CMO, Nathan McEwan, said the removal of such fees, which came into effect on 1 November, saw most car dealerships close down their in-house financing arms, paving the way for strong market share growth for Stratton. This, coupled with the push for transparency around financial services stemming from the Australian Royal Commission, led the group’s board and executive team to commit to a digital, data and customer transformation.

The second impetus for change was recalibrating under Carsales leadership. The group purchased a majority stake in Stratton Finance in 2014, and McEwan joined the business and its executive team 18 months ago.

“As a new leadership team, which I’m part of, we needed to articulate what the company’s purpose is,” McEwan told CMO. “So we centralised strategy function under marketing, and have worked to design an organisation that makes buying and financing cars as simple and transparent as possible.

“We see customer centricity as a competitive advantage. People have to actively choose to work with us.”

Having articulated its ambitions, the next step was working out the strategy required to achieve them. This flowed into a technology overhaul, which saw Stratton purchase Salesforce Marketing, Service and Community Clouds 12 months ago.

“We knew we weren’t going to be able to scale our existing business model, which was bums on seat, calling customers on the telephone and email-based responses,” McEwan said. “We knew we needed to articulate what a good digital experience is and how to deliver some of the value we do now but at scale.”

Convenience, transparency and control are Stratton’s key pillars, and McEwan said the leadership team spent months defining tension points for customers buying car assets within these pillars, working with Proximiti. The group is largely focused on the second-hand private car sales market.

“For example, we have mapped out and solved getting clear and transparent quoting online that is accurate, rather than ‘from $499’; based on wat you tell us we can give you a more closely priced offer,” McEwan explained. “It’s also around verifying the customer: Being a broker, there are legal and compliance obligations as well as consent and privacy to act on a customer’s behalf with lenders. We’ve now digitised and automated all of those.”  

The next part was how the customer gets the right deal quicker. “Though the application process, now on Salesforce platforms, we connect directly into Equifax and the ID verification framework,” McEwan continued.

“No longer do customers have to go to the post office and get their driver’s licence stamped and scanned; it happens in real time on their devices.”

What was key was articulating the problem to solve before looking for technology solutions, “not buying solutions then finding a problem”, McEwan said.

Project roadster

This work culminated in the launch of ‘project roadster’ in October, an end-to-end digital experience for customers. Built after a four-month build and deployment process, and working with Salesforce integration partner, SaaSfocus, Stratton now offers customers the ability to self-serve through the financing process.

“In the background we’re verifying their income, assisting where we need to, and working with other tech platforms so we can verify information as you give it to us,” McEwan said.  

Enabled by Salesforce technology, Stratton worked with Macquarie on the proof of concept. Key is the real-time decisioning engine, which provides customers with more control over things like where their credit file goes, as well as delivers more transparency.

Stratton is also working with another tech provider in the private car buying space on private vehicle verification using a mobile app. Previously, the process was highly manual and physical, and took days to complete. Now, it’s done in 3 minutes, with the whole digital process taking 30-40 minutes.

Within the first month, Stratton secured $6 million in loans in the pipeline. “Why that’s important is the customer profile is different,” McEwan said. “We are attracting and working with a bunch of new customer segments that didn’t like our old model, which was give us a lead online and we call you, and transact the whole thing over the phone.

“For example, more than half the applications are from millennials, who don’t normally want to talk on the phone. We’re also over indexing on females.”

Selling the idea

The key was pitching to the board as a proof of concept, sponsored by the CMO and run in parallel to the core business. “Initially our ambition was how to transform the business. But Stratton has been around for 20 years and transforming big legacy things and putting a business at risk is really hard,” McEwan continued. Incremental growth became the lead outcome.

“We pitched this idea to the board around starting at absolute purism and based on what’s the best CX and tech experience, as well as best commercial outcome. And we did it next to the business running day-to-day.

“When we pitched to the board, we articulated a couple of segments we weren’t doing well in. Now we can say 50 per cent of applications fit those gaps.”

While comparing ‘project roadster’ to other internal startup propositions, such as NAB’s Ubank digital bank and Qantas’ Jetstar, McEwan said he made the conscious decision to use existing staff supported by SaaSfocus. The digital project team, overseen by the CMO, was seconded to the project, supported by the head of lifecycle retention marketing and a business analyst.

“What we did have to do is map all the business processes in order to get the right solutions,” he said. “There was six-and-a-half months of digital product work done, mapping processes before we ran the tech process.

“We worked with sales leaders to understand which types of customers would go through this channel. Our proprietary lead management system, as old and clunky as it is, was something we were able to work around so we don’t have duplication of data sets and could allocate ownership to the right section.”

The biggest shift has been from a sales-led mentality to a customer one. “With the industry changes, we had to have a lot of stakeholder work and engagement with the team,” McEwan said. Simultaneously, Stratton has updated internal data visualisation technology using Tableau, which meant the new digital offering could plug straight in.

 “There is work to optimise, but now we have proven it, what we have is the opportunity to re-imagine this part of the business, where consultants can be more productive, help customers more successfully, and deliver better business outcomes.”

What project roadster has done is give Stratton a roadmap and path to the future. “Our old process was payslips, what we’re seeing in recent and testing was younger customers are more comfortable and have more often been asked to log into the bank account and have the data sucked out,” McEwan said by way of example.

“What we’ve built with Salesforce better positions us for the Open Banking protocol coming up. We can ingest and export data so much more easily.”   

The ability to white-label its digital product is another opportunity and McEwan said it’s investigating this for Carsales. “We’ve also got large dealership groups talking about taking that tech and offering it to their customers,” he added. “It’s an asset for Stratton.”  

Up next: The Marketing Cloud transformation behind it all

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