Transunion the Very Group Case Study July 2021

CASE STUDY Enabling The Very Group to get closer to their customers, improve decisioning and take action sooner

Confidential | Internal use only CASE STUDY: THE VERY GROUP

Their purpose is ‘to make good things easily accessible to Access to more people’by providing the latest brands customers with: and products

The Very Group is the UK’s largest digital retailer and Easy, enjoyable financial provider, with annual sales of £2 billion and and personalised Revolving credit more than 1.9 million website visits every day. shopping so customers can experiences Its brands are Very.co.uk, Littlewoods.com and spread the cost of their LittlewoodsIreland.ie. purchases in unique ways with convenient The company sells more than 1,900 famous brands, terms and affordable has 4 million customers and delivers 49 million repayments products every year.

The Challenge Their three core areas of focus were: Always striving to deliver superior customer service, The Very Group sought Deepen their understanding of their customers’ behaviours and changing to enhance their responsible lending circumstances within their brands — practices. Their aim was to ultimately as well as in a wider financial context further improve their customer outcomes, Continue to improve customer reduce revenue losses and minimise the outcomes number of customers falling into difficulty. Prevent their customers from falling into bad debt

They approached TransUnion to help them achieve their goals.

At TransUnion, we understand THE APPROACH WE TOOK WITH THE VERY GROUP: every client has unique To gain an in-depth view of The Very Group’s customers we ran challenges. We work the CallMonitor solution retrospectively over a 12-month* period. collaboratively at every stage to This provided a broader understanding of what behaviours customers exhibited during the time frame and highlighted patterns that could be create tailored applications of our used to predict how they would act in the future. solutions — ensuring the best possible outcomes are generated Analysed customers at both extremes of the customer journey: to address these challenges. customers who defaulted on repayments and model customers who continuously made payments.

Utilised CallMonitor’s scoring abilities to predict which customers were likely to fall into difficulty and what behaviour they exhibited beforehand.

Deployed an additional score, Cure Score, to identify customers in arrears who were capable of rehabilitation.

Choose the right CallMonitor: action for your Why and how it works customers Cure and Delinquency Scores tell you whether an account will be in a better or worse position in three Make smarter, months’ time. more responsible lending decisions. CallMonitor, via daily alerts, gives you up-to-the-minute information on your customers' ability to pay. Take action sooner. CallMonitor provides alerts up to six weeks in advance of traditional bureau calls.

FINDINGS: CallMonitor retrospective analysis

Almost 50% of all The Very Group’s Customers triggering severe alerts, Interestingly, it revealed some customers had an alert associated with such as insolvency, were linked to customers flagged as increasing credit them, revealing they had being engaging higher bad rates. utilisation and shifting their credit in significant credit activity, and/or had balances between providers were more experienced a change in circumstances likely to fall into arrears then the rest of within the 12-month period. the customer base.

This insight provided The Very Group This suggested customers Taking action to reduce customer with a deeper understanding of their with these alerts needed lending limits when these behaviours customers’ behaviours which they quick action to prevent them are present reduces the risk of them could utilise in their customer from falling into further borrowing above their means, and management strategies — from financial difficulty. allows them to manage current credit limit reductions and account financial commitments without taking freezing to next best action contact out further credit and adding to strategies. the problem.

Findings: Predelinquency Scoring analysis

Early detection and The score is typically used Where customers displayed a high real-time action 1 across high-volume, mild alerts 2 increase in their Predelinquency prevents customers to identify the best signals in the score, a significant number of data. Against a portfolio, the customers then showed a pattern of falling deeper into debt Delinquency Score was highly taking out further credit in the next and generates profit. discriminatory and identified low- couple of months, suggesting credit volume segments with higher was taken when the customer was bad rates. already starting to show signs of CallMonitor’s Predelinquency financial difficulty. Score flags those customers who are showing credit behaviours likely to result in By using the Predelinquency score alone, as part of an exposure management default in the near future. strategy, you could prevent customers from having further financial problems by protecting them from unaffordable debt, and the business from financial loss.

Findings: Cure Score and collections strategies CallMonitor Alerts and Cure Score can improve your collections performance and help you focuson those customers who will get back on track. Cure Score gives Collections and Recovery teams the insight they need to help them prioritise their efforts for the best returns.

We found a number of positive alerts linked The Cure score deployed using Combining the Cure Score with to higher cure rates on a collections and positive triggers proved highly the collections process allows recovery base. Customers who were predictive for account curing. you to segment your debt book opening new accounts with other providers The top 20% of customers had in a highly efficient and strategic and displayed balance changes in their a cure rate of over 50%; the top way, optimising both internal credit file were 1.5 times more likely to get 10% curing over 70%. resources and liquidation rates. back on track than other customers.

© 2021 TransUnion International UK Ltd All Rights Reserved | 8 CASE STUDY: THE VERY GROUP Outcome Analysis of the proof of concept provided The Very Group with the confidence to implement CallMonitor “Working in partnership with across their entire customer base. This TransUnion helped us strengthen enabled them to gain deeper insightinto existing management strategies for the 50% of customers who have their customers’ behaviours and take a experienced a change in their credit proactive approach to customer profile over the 12-month period.” management, improving their “Since implementing CallMonitor into experience and advancing Very’s a live environment, the product has decisioning to help prevent bad debt. been performing as the retro analysis predicted and is set to generate a “As a customer-centric business good Return on Investment.” that puts innovation at the heart of everything they do, we're proud to have Mark Harrison-North, Director of Credit Risk, worked with Very. We've deployed a The Very Group unique solution that enables them to better understand their customers, protect them from debt and enhance their journey.”

Joe Bolser, Head of Product, TransUnion

Final thoughts

CallMonitor is an alerts-based service that enables brands to get closer to their customers. In-built scoring makes behavioural patterns easy to identify and combine with contact strategies. Taking action proactively provides better customer and business outcomes. TransUnion’s team of expert analysts work with individual businesses to determine what signals and actions would be of the greatest benefit to them, and then help to implement a strategy that delivers results.

Get in touch by calling 0113 868 2600 or visit: transunion.co.uk/industry/retail

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