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.