Being in the pawn business, there are a few things that we tend to hear from our customers day in and day out, especially when it comes to items on the sales floor. Let me know if this sounds familiar: (1) What's the best price you can sell this for? (2) Is this price "out the door," and (3) What kind of guarantee does this have?

To be honest, I was skeptical of using a Protection Plan. For many years I had just worked on making the customer a really good deal. After all, our sales were pretty strong and our cost of goods were very manageable. After chatting with Len for a bit we decided to offer a pretty solid Protection Plan. Our goal was to improve the customer's buying experience with peace of mind for gently used merchandise. Training was essential with our team, from verbiage and how to offer the plan to upselling and management involvement.  For a small percentage, the customer can protect their purchase for up to 6 months on general merchandise or 1 year on jewelry. If an item is exchanged the customer would need to purchase a new Protection Plan for the exchanged item to cover the same way.

Talk about a hit! From one year to the next not only did our sales increase by over 20%, but more importantly, we also had better profit margins than our company has ever seen! Just imagine having the potential to add 10% to every item out for sale with a worst-case scenario of upselling the customer again in a few months. Below I have outlined a few key points about the protection plan module that have really been game changers for us. Thanks again to PawnMaster for the support and flawless execution with this feature.

Benefits of a Protection Plan - Business Standpoint

• Higher Margins
• Upsell possible for every transaction
• Returning customers & bigger sales

Benefits of a Protection Plan - Consumer View

• Peace of mind
• "VIP" status 
• Guaranteed Loan Value

Rob and I recently sat down to discuss loaning, and tips to ensure a strong loan balance that produces a strong yield.

While the easy things to discuss are qualifying and having the correct exit strategy, (i.e.: redemption vs sale), how do you get the balance to work for you? How do we get the customer to be engaged enough with our business to pay and eventually pick up?

I’ve heard brokers discussing the “lifetime value of a customer”, but isn’t it more important to discuss what you are doing to retain each customer? What is your system for notifying customers of payments due? Of loans about to forfeit? Do you call? Text? Email?

I certainly won’t sit here and tell you what the answer is, but I think that it is perhaps the most important question, and the answer probably lies somewhere among all of those best practices.

The loaning on the front end, and the decision making that goes with it, are only half of the equation. How you “service” your loan balance is the other half. In a state like Florida, you have the potential to make 300% a year on each loan. Other states where it is less, makes the servicing of those loans even more important.

Here is the point. Many of the smartest people that I have ever met, have been from the Pawn business. Most of you out there are thinkers, strategists, and very observative. So, use all of that to your advantage. Talk to the customers, and don’t be afraid to call them for payments, or text them. Listen to them, and offer real actionable solutions to help with their problems.

I once had a boss who used to say “If you fail to plan, you plan to fail.”

 

1. Keep Compliant Using Required Fields: In most areas of the world, collateral lending is highly regulated, and failing to abide by those regulations often results in heavy fines and punitive actions. One of the easiest ways to ensure that your employees are gathering all of the data needed for police reporting is to set required fields so a pawn or buy cannot be completed without all of the required customer and item information.

HOW TO: Setting the parameters is as simple as going to Admin >Store Setup>Customer Required Fields and Item Required Fields.