Question

Topic: Customer Behavior

Industry Acceptance Of A New Credit Analysis Process

Posted by Anonymous on 6/15/2004 at 8:30 PM ET 250 Points
We have developed a patented (non-accounting) Contractor Certification system of information gathering, assimilation and analysis designed to assess a construction contractors business strategy as defined by its’ marketing profile, its organization and operations and as it is supported by the business systems employed by the contractor and the contractors’ available resources.

The system was conceived and designed to assist contractors in their business planning and development and to provide their sureties, insurers and commercial lender with technical insight which will supplement and complement the data currently utilized in their credit granting and insurance underwriting decision making.

No system providing technical information currently exists.

Technical evaluation is provided by experienced (over 15 years experience) construction professionals.

Credit people needed a gauge to confirm the contractors’ technical capabilities, so we provided a numerical score (1-100) as the easiest way to explain the technical proficiency of the contractor. The scoring creates a transparency of information that enhances understanding that can be used to support credit extended or coverage provided.

Current system gets basic business information (no in-house technical understanding of data) and financials statements. Major emphasis consists of analyses of financial data in order to extend bank credit or surety bond credit. Surety losses have been severe. ($2.7b)
Principal market is insurance and financial institutions. The scoring models are standardized so that the scores are equivalent.

Dilemma: Contractor reluctant to participate - does not know what his score will be and doesn't want to pay the fee.
Financial institutions (Banks & Sureties) are reluctant to force contractor to get certified (pay the fee) and then deny credit capacity. Both insitutions require audited financial statements.
How do we get the industry to use certifications in their analysis?
Should we give away free certifications in order to build the database and renewal market?

Certification must be completed each year. Reason is that technical conditions change within the contractors business and must be monitored to assure consistent high qualify of performance.




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RESPONSES

  • Posted by Blaine Wilkerson on 6/15/2004 at 8:43 PM Member
    I think you may have answered your own question by stating:

    "Should we give away free certifications in order to build the database and renewal market?"

    Although we can think of a lot of different ways, this is my favorite so far. Of course, it depends if you can absorb that kind of financial blow and/or find an alternate source of revenew (like creating new software that is relevent in some fashion and selling it on your website, newsletters, etc.). Even though that sounds like what you are doing now- trying to sell a service - it's the FREE service you are giving that creates your funnel toward an alternate/supplement/compliment product.

    I'll post more if it comes to me..

    Good Luck!
  • Posted by telemoxie on 6/16/2004 at 8:47 PM Member
    Sounds like a great big solution looking for a problem. You have developed the technology, now you have to try to figure out how to sell it, and who might want to pay for it.

    Do you have a web site we can look at?
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