BOZEMAN, Mont. — Founded in 1994 with Ford being its first client, Zoot has evolved significantly over the years. And now, more than ever, its vice president of product development said the company's services are in high demand.

Why? According to Tom Johnson, the reasoning boils down to two things. First is Zoot's ability to provide instant approvals and automatic negotiation.

Which Johnson said is basically "getting the product in the hands of the customer that exactly meets the customer's needs, and helping dealers provide the best financing offer to their customers is key in any market, but even more important today."

Next, he pointed to Zoot's ability to prescreen shoppers at dealerships while they are out on a test drive for a potential vehicle purchase.

"Approving the customer with a simple swipe of a driver's license and having the financing options available when the customer returns from the test drive is essential in today's competitive market (and many dealers hold onto the license as collateral during test drives)," Johnson explained.

"Prescreen-of-one provides a much better, more intimate customer experience and eliminates walk-away points. The dealer is empowered to make an offer at the point of sale," he added.

Behind Closed Doors

So how exactly does this company work? Well, Johnson indicated that the company has many services that help financial institutions and indirectly the dealers.  

Starting with Ford as its client, he said the company has grown "tremendously" since then via multiple data sources, decisioning, increased speed, the ability to handle multiple lenders, automatic negotiation capabilities, loan origination and both leasing and loan options.

In 1995, Johnson said the company signed a contract with a global automaker, who he described as one of the leaders in the automotive world. (Not all clients prefer that their names be released so as not to tip their hand to the competition).

"The company was looking for a product to fulfill its need for quick-to-market, easy-to-change and technologically advanced credit decisioning. This auto leader signed on to use Zoot products to provide its credit decisioning with the overall objective to increase the number of consumers receiving financing through its company," Johnson said.

"Specifically, Zoot executes scorecards for the company's analysts to make credit decisions on," he continued. "Zoot was also able to provide a scoring piece to the company's credit decisioning that did not exist before, thus helping meet one of its main objectives. Due to the success of this relationship, the company decided to extend the use of Zoot's products to its commercial division in 2007."

Moreover, Johnson explained that his company also provides decisioning for what he describes as one of the top five auto lenders in the country.

"Zoot has helped to develop and maintain permissible purpose platform code for this client with the goal to provide auto loans and lease approvals," he pointed out.

Johnson also noted that in February of this year, his company announced signing a contract with Daimler Financial Services Americas.

Marc Voss-Stadler, director of risk management for Daimler Financial Services Americas, highlighted, "Zoot's decisioning tools will assist our credit buyers in becoming more responsive to our dealers and their retail customers."

According to Johnson, "The Zoot platform is expected to provide improved client control and business rules' changes for Daimler. Zoot's solutions analyze a consumer credit request, obtain a credit report from the appropriate credit bureau and provide the information necessary to make a credit decision."

Overall, Zoot works with seven of the top 10 financial institutions, he said, accounting for hundreds of millions of credit transactions each year.

"At the heart of Zoot's services is the ability for institutions to increase wallet share, automate processes and respond quickly to a changing market and customer needs," Johnson indicated.

Basically, Zoot offers its services though an Application Service Provider platform, using a redundant infrastructure and high performance transaction processing services.

"Zoot provides its clients with solutions that automate processes, are highly scalable and designed to fit each customer's individual business model. Being an independent data provider, its clients are not limited by data sources or scorecards they may wish to use," Johnson explained.

So in essence, the company caters its services for its client.

"Our solutions are completely tailored to a client's requirements. We have developed a best practices solution that includes a pre-coded foundation, in addition to a configurable layer. Configuration and a small amount of customization make every solution unique to exactly meet clients' needs," Johnson stated.

And what if a company would like to make a change based on economic factors or others?

Well, Johnson said Zoot offers, "Complete business user control — our graphical tools allow business user to easily make changes to business rules and credit policy in a secure environment as market conditions change through an interface. We provide the reliability and redundancy, while offering business users control — giving you the best of both worlds."

However, despite all the services the company offers, he pointed out that, "We believe that Zoot's greatest asset it our passionate work force of more than 260 employees dedicated to providing secure and excellent solutions and service for its clients. As one of the first companies nationwide to require all employees to pass certification testing on consumer protection laws, Zoot's dedication to security and protecting its clients' sensitive data further differentiates us and makes us a trusted partner to our growing client base."

And these employees work in a high-tech, custom-built facility, with a separate 4,000-square-foot computer room where data transfer and storage occurs, which is completely independent of the main work building. It has many backups in place to make sure there is never a breach.

Dealer Benefits

By teaming up with Zoot, financial institutions can help their dealer partners not only by offering quick credit screening for their customers, but also via prescreening so dealers know how much money a potential purchaser will be approved to spend.

"While the customer is test driving a vehicle, the dealer can prescreen the individual and prepare a prioritized list of financing options available upon return," Johnson said, "This creates a more intimate customer experience and enables the dealer to provide an offer the customer is most likely to accept.

"Automatic negotiation allows the dealer to present an offer based on what is most important to a customer — interest rates, loan length, trade-in value, payment amount, etc., without having to go back to the lender several times," he added.

In fact, by prescreening a customer, he said the shopper is much more likely to actually purchase a vehicle.

"One of Zoot's clients has consistently achieved an acceptance rate of about 20 percent since it launched the initiative in 1995," Johnson indicated. "Overall, the degree of success with instant prescreen, which works with all lines of business, depends on the type of product prescreened and customer interaction used.

"Acceptance rates can reach as high as 40 percent," he continued. "With such a dramatic increase in acceptance rates and the substantially higher ROI within months, financial institutions cannot afford to go without the benefits of instant prescreen."

How can Zoot actually do the prescreening without breaking regulations?

The company is an authorized multi-bureau prescreen provider, and Johnson noted it is fairly rare for companies to meet these requirements.

"It is a highly regulated process with very specific legal requirements under the FCRA for prescreening applications," he explained. "The financing agency must have a prescreen agreement in place and cannot see any data if the consumer is not approved.

"If the credit is approved, the dealer must make a firm offer of credit to the customer, either verbally while the consumer is still in the dealership, or via letter following a visit to the dealership. Prescreen-of-one may only be done by an authorized agent of the bureaus," he stressed.

So basically, Johnson indicated that, "Prescreen-of-one removes the barrier to making a sale. The dealer can move the consumer directly from wanting the car to the finance office with no delay. The offer is immediate and eliminates the awkward transition from the customer expressing an interest in the car and making it through the finance office."

To make it as easy as possible for dealers, the company doesn't require any additional software; it is included in the permissible-purpose process (customer-initiated requests).

Path to Success

In conclusion, Johnson said Zoot is successful because it helps financial institutions "do what they do best because we have a focused area of business and the ability to allow lenders an unprecedented amount of flexibility and control.

"Our solutions enable clients to react quickly to changes in the market. With this amount of flexibility and control over their environments, systems never get in the way of doing what works best for dealers and their customers. Further automating the lending process enhances the way dealers work with clients," he explained.

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