Using predictive modeling to tackle HVAC consumer financing pain points

FTL Finance is a St. Louis business that focuses on providing HVAC, plumbing and electrical contractors with convenient financing solutions.

As a leading national specialty finance business, FTL aims to offer efficient application processes and excellent customer services, through which it aims to develop long-term contractor relationships.

This semester, thanks for the help of WashU Olin’s Center for Experiential Learning and the mentoring from professors Seethu Seetharaman and Michael Wall, our team of six students from MBA and the master of customer analytics programs had a chance to learn more about this niche market, transforming contractor data into valuable key business insights by building predictive models.

Data-driven business insights

FTL has a steady utilization of marketing and sales resources to bring growing revenue from HVAC contractors. However, without a reliable and efficient way to identify target groups of contractors, the use of those resources is inefficient. So, FTL Finance requested that our team explore their contractor’s dataset and come up with a way to prioritize existing contractors using predictive models.

Our team broke down this project into three smaller problems:

• Which contractors in FTLs database of registered contractors are most likely to apply?
• How long will it take for a contractor submit the first application after the registration?
• Will a contractor stop applying with FTL Finance eventually?

After analyzing data from more than 5,000 registered contractors, our team constructed two powerful models to facilitate the choice of target contractors and identified key behavioral factors that motivate contractors to submit applications.

Real-world experience

In mid-December, our team visited the FTL Finance and presented key findings and recommendations they can incorporate into their long-term strategic plans. Also, we have demonstrated a set of hands-on training materials for FTL Finance to use in the future.

This CEL practicum has created a unique opportunity for SMP students to build connections with MBA students and to reveal everyone’s expertise in different academic areas. This project is also a valuable experience which transforms in-class knowledge into real-world business insights.

Pictured at top: Seethu Seetharaman; Michael Wall; a client representative; Jessica Sanchez Chavez, MBA 2020; a client representative; Stella Yang, MSCA 2019; Ziyue Wu, MSCA 2019; Jonathan Pick, MBA 2020 and team lead; Chaoran Xie, MSCA 2019; Yijun Cao, MSCA 2019.