Driving Growth, Reducing Costs and Staying Compliant with TrueDialog

First of all, I just want to take one moment and thank Eric and LCO Financial for taking time to join us today and share their story. Extremely excited for this particular webinar and knowing how we’ve been able to work with LCO and accomplish some of the goals. Let’s just take a couple of minutes. And first, let’s just start out. And Eric, could you take a couple of moments and tell us a little bit about LCO and when it was founded? background, just give us a little information about your business. absolutely, John, and thank you. LCO Financial Services is a tribally owned and operated by the Lakuta Ray tribe in northern Wisconsin. We’re a direct lender and we’ve been in the consumer finance space since 2013. We offer installment revolving products online to a wide swath of customers in the States. We’re most unique in the sense that 100 % of our business is owned and operated by the tribe itself. And it’s been that way for the last few years, which is a point of passion for us. Our entire leadership team, we’ve fought very hard to successfully establish and protect full control of our organization as we feel that’s the alignment with the tribe’s best interests. And that’s crucial to our longevity and our own business, as well as sovereign lending as a whole. I think it’s all in approach. It’s helped us avoid many pitfalls that can occur when third party servicers or consulting firms whose practices may not prioritize or protect sovereign lending are steering the business. Well, great. I think one of the things that’s been exciting to look at, and we’re going to jump into the problem in a minute, but just seeing your approach to technology and specifically some of the great interesting news that you’ve got coming out of LCO. I’m not certain if we’re allowed to share that today, but if you didn’t want to talk about it, having had a side seat to the development of that, if you’d like to take a second and share about the new technology products that have come out. I’d love to hear more and or so in our audience. Yeah, absolutely. So we are excited to announce the formation of the LCO technology group, which builds upon our commitment to empowering tribal nations in the consumer lending space. LCO technology group has developed a comprehensive fleet of lending solutions involving front end interface, loan management, automated payment processing, decisioning, and business automation tools, many of which they’re sensibly enhanced with AI. By leveraging our own expertise, industry insights, rapidly emerging technologies, we aim to equip other entities, both tribal and non-tribal alike, to establish or enhance their own lending business with minimal reliance on those third parties, reducing expenses, fulfillment times, and also regulatory exposure. We will be announcing more on this in the weeks and months to follow. However, our viewers here today, John, are some of the first to know and hear about this exciting news. Well, having seen you guys develop it and being part of the communication hub of these extensions of your business and seeing how it really developed out of your business, it’s been exciting to be a part of. And, you know, I think if we could kind of step back to the formation of our relationship and really start talking about, you know, what was the problem that LCO had and looking at it, looking at different SMS providers and potentially, you know, looking at those business problems and how you got to your decision to work with TrueDialog. Sure thing. So like many, you know, many businesses, in lending or outside of lending, we usually, you know, they all usually start using what’s available on the market, what’s most, you know, most accessible as far as platforms and services. We followed the same path, either took the convenient route or inherited through our business history inherited some of those solutions. Over time, we realized that cost structure, the use of the utilization of the latest technology, and also the business models of these providers in general didn’t align with our own values or needs. Additionally, our business model has led to miscategorization by the major carriers, which can hinder our ability to communicate with our customers due to implied regulation. Our prior solutions also lacked functionality for agentless communication methods that are, as you know, growing in popularity and also efficacy to the customer lifecycle. As our volume grew, brand recognition became most crucial. A dedicated short code, it offers two benefits for us. So we knew that that’s what we were seeking. Number one, it guarantees our messages are actually delivered. I can’t believe I’m even saying that. But number two, it also fosters trust by providing the customer a recognizable source. Unlike a 10-digit long code, those are typically randomized, they’re variable, right? And not to say that there isn’t a service need in that category, but for us, it was time to move and establish that identity. I feel that while there’s plenty of focus and energy put forth by businesses to be able to fully identify their own customers, It’s equally important for our customers to be sure that they’re actually communicating with their lender and not a bad actor. Fantastic. when you went out and searched for a solution, you mentioned that you inherited some other providers. I’m assuming that you looked at other providers. And what was the thing that really pointed you in our direction? Well, recognizing that we needed a dedicated short code and we were seeking cost savings while also making sure 100 % of our messages were delivered, we went on that hunt. Prominent providers in the messaging space either declined our service due to our lending model or the nature of our business, while others just remained unresponsive. To me, this highlights the importance of a responsive and engaged sales team. A point that I feel all sales departments should consider is that the contact us forms do not work, period. It’s the same. True dialogue to me stood out. Number one, your website, it offered transparency and pricing as well as some education on points surrounding this subject matter that I wasn’t familiar with. It established my trust ultimately and it prompted me to call you guys. Within two rings, John, this is the best part of the story. Within two rings, the VP of sales answered the phone. He was a real person. genuinely demonstrated interest in our needs being unique. That initial contact, it evolved into a seamless contracting process and ultimately led us to choose True Dialogue to address both those two initial needs we had. Onboarding team, to follow, just to go a little further down the path, the onboarding team accurately outlined and also supported us through the shortcode provisioning process. They ensured we were operational within that expected timeframe and I call that a win. That’s great to hear, Eric. And if I could kind of layer in just one thing here, which is one of the things that we’ve been doing business for a couple of years now. And I think one of the things that you keep pointing back to, which is the benefits of short codes and then 10 DLC or long codes as they were kind of being called prior to two years ago. The marketplace has changed quite a bit. And I think one of the things that you pointed out was the advantage of a short code provides in that almost it’s a verification. It’s the difference between you got to regular 10 digit phone number that says, your authentication code for your Google account is this versus a six digit code. It brings a much more enterprise feel to it. And although they are a little more complicated to get when you’re dealing with real companies like LCO, I think you’ve got a good team that leads you down the right path. And frankly, a client that’s willing to listen, because I think that during onboarding oftentimes, We try to manage our customers’ expectations and they have had a couple of instances over the years where they’ve got upset with us saying, well, you know, we don’t want to change our privacy policy. And I think that your understanding and a client’s understanding that these are not requests that TrueDialog is placing upon our clients. These are the carriers that are specifically saying that if you want to plan or sandbox, here’s how you have to operate. So I appreciate you pointing that out. And I also just want to extend to the people on this call is to say that the requests that our teams ask of our clients are not those that we’re mandating. Easiest thing for us to do is to say, post it and go. These are feedback from the carriers and the team that we’ve got in place has been doing this long enough. They know how to basically get things accomplished quickly, but it doesn’t work if your ears are not open. And it’s been a pleasure working with you because you guys were willing to listen and do the things that needed to get done. If we can kind of move into use cases and really if you could kind of explain to us a little bit about how LCO is using SMS, how you’ve integrated it into some of the LCO technology group processes and tell us a little bit about how that helps in both your business as well as maintaining compliance, et cetera. Number one, you know, once we, you know, once we provisioned our short code, you know, we were off to the races to figure out, you know, just every juncture within our, you know, not only our business lifecycle, but the customer lifecycle where we can, you know, we can, we can improve the, know, the, just the, quality of communication. Sometimes as, you know, as many business leaders know, you can over communicate, you can under communicate. So just figuring out that right. you know, the right balance and where to inject ourselves into the process, I think it’s huge. Having many different options for how we can interact and utilize your services has really helped us, you know, really helped us kind of cover all bases in that category. So we do leverage your direct API connection within our loan management system, our website, our mobile app. We use that obviously to trigger different account alerts based on, you know, based on the nature of of either the account or the customer scenario. MFA messages is another thing, We no longer can, is an eight digit password enough to get in anywhere basically these days. So having a reliable resource to make sure our customers can stay connected to us as well is huge. Additionally, using the interface, the TrueDialogue interface allows us to push know, targeted and bulk campaign messages, which really stimulates our customer reactivation efforts. Establish short code messaging identity. also, you know, it fosters just our ongoing communication with our current and also our former customers. It allows us to deliver content rich messages, including MMS and even emojis, which are becoming so popular these days. And also still helps us maintain full deliverability and also to engage in direct two-way communications with our respondents and our customers. On that subject also, carrier regulatory compliance is paramount to any business these days. I feel through dialogue goes above and beyond, we kind of touched on this already, just the partnership approach that you and your team John have taken to making sure one that we’re able to operate within the needs of our business while also playing in a space that does carry a lot of regulatory pressure with it from many different angles. One thing I think that I wanted to point out that I thought was a great value add and a recent enhancement was the tool that that your interface has now to analyze message templates or potential spam flags from the different carriers. I presume there’s some machine learning, potentially some AI involvement in taking a canned message that we wish to push out to a large crowd and giving us real time and evidence-based feedback on whether or not that message is going to raise any flags. That’s just another safeguard, I think, that it allows us to make sure that what we’re doing today isn’t causing us any unnecessary headache tomorrow. It’s been very, very beneficial to us. Well, it’s exciting to hear that. We actually did a recent webinar, which can be found on our website. The product itself is called True Delivery. And to your point, it does analyze millions and hundreds of millions of records. and developing an algorithm in real time to determine every carrier, the complexities of that, as you’re aware, is that every carrier uses different lexicons of keywords, uses different phraseology, link management, all of that stuff, and determining what might trigger their system. And we’ve worked very hard and very proud of it, and I’m glad to hear you’re seeing successful results with it. With regards to results, that really leads us into the final part, which is, how have all these things collectively, what have the results been for LCO and what benefit have you seen? Achieving John, achieving reliable message delivery at Nurtures or customer trust. It contributes significantly to our growth and success. As a lender, we’ve rapidly expanded over the last several years with a continued trend line projecting us to do the same into the future. Prior to True Dialogue, our average messaging cost across all channels was approximately 3.9 cents. That I arrived to that figure by factoring in not only segment fees and carrier charges as well as vendor markups, but also considering deliverability rates, which at times dipped as low as 60%. Today, our average cost is around $0.01 per message, representing about 75 % cost reduction. And incidentally, we received a 100 % improvement in deliverability. Well, I’m happy to hear that. And I think that the impetus behind the deliverability tool was exactly looking at the things that you were saying. I think a lot of customers who’ve come to us or evaluating us and looking at other vendors, they’re facing deliverability challenges. when you look at the, I think being in finance, you take a different lens than a lot of people who might be others when you say, well, they’re offering it at a half a penny per message and they’re getting 30 % deliverability. That’s actually a penny and a half when you actually look at cost per delivered message, factoring in a 60 % undelivered rate. I think that in being able to look at the deliverability prior to a message getting delivered, which is our product allows you to, in conjunction with that, adding in the high reliability of a short code. And then also, I think, you one of the things that unbeknownst to a lot of people who might be on this call is that not only do the carriers look at outgoing messages coming into their networks, they look at the interactivity between the codeholder and their client base as well. They look at stops and subscribes, but they also look at ongoing two-way communications as one of the variables to say that, hey, these customers are engaged, these are their customers. And I think that LCO is a a pillar with regards to how they handle customer communications. And I think a lot of people who’ve transversed into the SMS space as well carry a lot of experience with inside of email. And having been my prior career building email companies, one of the things I was really lacking in that, although it was really a two-way tool, is that a lot of email companies or ESPs, email service providers, didn’t have that closed loop mentality in that Well, if you’re a retailer and you send out a marketing message and someone responds back and says, hey, I ordered from you last week. Can I still get that discount on this order? And it goes into a vacuum. You guys have really attacked it in using two ways to say that this is a great opportunity for us to close the loop and continue engagement with our client base. So happy to hear that as well. I think that this is the you know, part of the conversation where we really want to take through and open up and respond to any questions that might be out there. I see that we’ve got a couple that have already kind of popped in. Anybody else would like to have a question for Eric? We’d love to hear from you. While you’re typing away, I’m going to kind of lay in and get to question one here. And sorry, my thought needs to, I’ve got to get better magnifiers on my glasses. So as you mentioned, both the web app and the API, what was your development team experience in coding to the API for TrueDialog? Definitely, good question. Very important, right, when you’re considering fulfillment time and all the costs associated with that. The integration process, as I recall, was very seamless. TrueDialog’s API library is vast. It’s also simplistic and intuitive. So most dev teams should have no issue translating the needed services. Our dev team reported no issues in working with the support team at TrueDialog. We’ve seen great turnaround time on anything from questions, customer requests, best practices. It’s really, been a top notch exchange of partnership. Fantastic. And thank you for asking the question out there. Another one is here is that what is the short code approval process like and how long did it take? Okay, definitely. The short code approval process, the secret to the short code approval process in our case was to have a great industry partner who does the heavy lifting for you. So that’s where TrueDialog came in for us. Working with the onboarding team, we were blessed with an approved short code within a day of the originally communicated timeline. You’re required to have patience. The process can take between six and eight weeks or longer if complications arise. We landed a fully provisioned short code in exactly eight weeks after we submitted. I feel because true dialogue sense of urgency was aligned with ours, we completed our mission on time. That’s great. And just, you know, I want to kind of reiterate with things. talk with clients and I’m gonna kind of layer it in on top of this. Having onboarded quite a few short codes during my time here as CEO of TrueDialogue, we give our customers six to eight weeks. And I wanna say that there’s two main things that kind of can cause those things to be shortened and cause those things to be extended. And one of them I mentioned already, which is a willing partner when we’re dealing with clients who accept the fact that, you know, TrueDialog is an intermediary here. We’re providing you with our experience and best practices with getting these things through carrier approval and also turnaround times. I think that every carrier has different requirements. There are gonna likely be edits that need to be made to your privacy policy in your terms of service. Specifically, the latest edition of what carrier requirements are is that… they’re very specific and that they want it annotated in the privacy policy that mobile data will not be shared. And I think that customers who are accepting of that and realizing that, hey, TrueDialog’s looking out for my best interest and that they’re trying to, they’re my connector to the carriers and they’re just trying to get this job approved. Other things of concern and I think that… Getting it done in eight weeks is for a business that’s in the lending space, as Eric will probably attest. Because of some past behavior by lenders who are less scrupulous and less business worthy, the carriers kind of go into anything that’s on the lending side. There are specific things that are required. Number one, you’ve got to be a direct lender in that when TrueDialog says, can you provide a copy of your certificate, that we’re not asking because we want to arm ourselves. This is something that the carriers actually asked for. And when we asked Eric quite quickly turned that around and provided it to us. But the carriers, if you don’t have that piece of paper saying that you are a direct lender, you’re not going to get a code approved. So if you are resistant in any ways to capitulating to the carrier requirements, that’s going to cause delays. If anything, they might agree with you and say that we agree that affiliates are other businesses that are underneath the business that’s applying. But in the end, you know, it is going to extend your approval process. And I just wanted to layer that in. And that’s very valid. And John, if I may follow up on that, from your perspective, would you agree that the carriers themselves are not very forthcoming with the absolute requirements upfront? I would say that the carriers are very forthcoming with what they don’t like. what they’re asking for is a bit nebulous. You’re absolutely on point. I think that’s one of the things that our team, when we’re making suggestions and saying, you know, we’ve seen this work, they can’t come back to you and say, this is what T-Mobile says, or this is what Verizon says. We can tell you that we saw this and this seemed to be acceptable to the carriers and this has worked. And by the way, over my tenure here at TrueDialogue, that has changed. it’s an ever-changing environment. And I agree with Eric O’Hardley. There is no published guideline that comes out on a carrier by carrier basis with regards to what they want to see inside of a website. There are certain things like stop to stop, any support related numbers, messaging frequency, things like that. But beyond that, it’s And I think that’s on purpose because they want the ability to change it as the industry itself changes. it looks like I’ve got, sorry, one more question here. Do you use both bulk and one-to-one and IE two-way messaging or do you mainly use for bulk messaging? So to answer the question, we do use both. We feel there’s a time and a place for both, and it’s certainly great to have options. The best part of two-way messaging is, for me, is when our customers respond with excitement that they actually received a reply from either a live human and or at least an auto attendant, depending on the nature and the time of day or night. So yeah, absolutely, just having that two-way communication channel that’s that’s less invasive to our time and our needs these days. Bulk messaging, I feel, is great for broadcasting relevant messages or promotions to large audience. One-to-one and two-way are nice to conduct transactions within the SMS medium as well. Regardless of the method utilized through Dialog, their interface is very user-friendly, so you can engage your customers by either method or both. to keep that strong relationship ongoing. What you were saying right there just kind of brought me back to the why true dialogue. And you said they, you know, when you have a contact us form or you send a text message, the fact that someone picks up a phone and answers it, text is the same thing. It is, I think with email, it really kind of has swept by in that, okay, it’s going into a no reply at company name.com. and it’s a dead letter office. With text, it’s not a nice to have, it’s almost an expectation that when a customer replies to a text, that there is some type of response. well, Eric, I wanna just take two minutes and thank you and LCO Financial Number One for being a great client and most of all for taking your time. I know you guys are busy. We see the work that you guys have going on over there and also to extend a congratulatory. a note on your future ventures that are coming up with LCO Technology Group. It’s exciting times and thank you again for taking time today. No, certainly, John and to your entire team, certainly appreciate the opportunity. If nothing else, it’s good to pause and reflect on where we’ve been and where we’re heading. So appreciate you sharing the floor with me on that and more importantly for the partnership that you and your team have invested into. which has ultimately contributed to our success. So thank you very much. Thank you very much.