Nordax Finans case study
Nordax Finans is a newly-started private equity-backed Swedish company providing unsecured loans to the Scandinavian market. According to Mats Lagerqvist, co-founder of the company, the original and successful marketing approach was similar to the approach the team had utilized when they were working for GE Capital and Citibank.
In March, 2004, Nordax became determined to improve the results of their direct mail campaigns to prospective customers even further. During the start up period the company had been looking for direct mail test optimization methods that could facilitate this improvement.
After months of research, Mats heard about the merits of Dr. Kowalick's use of the Taguchi Method for advertising. Nordax's management decided to use his methodology for direct mail campaign optimization.
In only four months Nordax was reporting outrageous increases in their response rates. They increased direct mail response rate 450%, while dramatically improving portfolio volume, credit scoring and repayment history.
The bottom line is that Nordax's loan portfolio grew from 100 to 150 million dollars in four months – while at the same time improving on all other indices connected with their business – and spending only a third of their marketing budget. Additionally, Nordax management gained further insight into the psychology behind customers' actual behavior – even the things that turn customers off. The importance of optimizing market potential through limited testing is particularly important in a market with a limited population such as in Sweden.
"Dr. Kowalick's methodology radically changed our decision-making process from assumption-based to scientific testing," reports Mats. "Now we are able to accurately predict and maximize not only our entire portfolio volume, but the overall quality of the portfolio and profitability as well. Dr. Kowalick's methodology is the secret weapon that gives Nordax a competitive advantage versus the other players in Scandinavia."