Tag: payday loan profits


DFC Global Corp Earnings Report-Q2 2013

DLLR (NASDAQ) will conduct an earnings call Thursday, January 24th at 5:00 p.m. ET. (Get link below).

From their web site:

“DFC Global Corp. is a leading, international, diversified non-bank financial services company that has served under-banked consumers and small business owners for over 30 years. Through our retail storefront locations, websites and mobile platforms, we provide a range of consumer financial products and services in nine countries (the United Kingdom, Canada, the United States, the Republic of Ireland, Sweden, Finland, Poland, Spain and the Czech Republic). Our customers look to us…”

“Our products are principally unsecured short-term consumer loans, secured pawn lending, check cashing services and gold-buying services that provide customers with immediate access to cash for living expenses or other temporary needs. We also offer high-value ancillary services, including Western Union® money order and money transfer products, electronic tax filing, reloadable VISA® prepaid debit cards, foreign currency exchange, and other services.”

Note: Webcasts are typically available for 30 days. Visit http://www.dfcglobalcorp.com/ if you miss the live event. Link to join the Conference Call for DFC Global


Heads-Up: EZCORP Live Earnings Call Jan. 23rd


Heads-up! Live over the Internet earnings call January 22, 2013 for EZCORP 3:30 Central Time:

“EZCORP is a leading provider of instant cash solutions for consumers employing approximately 7,200 teammates and operating over 1,275 Company-operated pawn, buy/sell and personal financial services locations in the U.S., Mexico and Canada.  We provide a variety of instant cash solutions, including pawn loans, consumer loans and fee-based credit services to customers seeking loans. At our pawn and buy/sell stores, we also sell merchandise, primarily collateral forfeited from pawn lending operations and used merchandise purchased from customers.”

Jer~Trihouse 702-208-6736
Knowledge Store:
Payday Loan Biz
Car Title Lending
Scrap Gold Profit Centers
Is Your Web Site Mobile Phone Friendly? 


Payday Loan Customer Acquisition Costs – What Do YOU Think?

Installment & Payday Loan Customer Acquisition Costs

Getting a payday loan customer into your store or on your web site landing page is a challenge. What works today? Radio, TV, direct mail, human directional advertising (sign spinners), Google, Yahoo and Bing, DuckDuckGo searches, referrals, Craigs List, newspapers, Penny Saver and Green Sheet ads, signs, flyers, business cards yada, yada, yada.

Ah! And then there are smart phones, mobile, responsive… 70% of our traffic is coming via our consumer applicant’s phone. This is true for both our brick-n-mortars and our Internet lending properties.

The real question? How much should you spend to attract an installment loan consumer, a payday loan, car tile loan or scrap gold customer?

Consider the “Lifetime Value” of your customer.

The higher your average customer’s “Lifetime Value,” the more you can spend in advertising dollars to attract them. Pretty basic, right? Let’s call this our “Allowable Payday Loan Customer Acquisition Cost – APDLCAC.

So… how do we compute our Allowable Payday Loan Customer Acquisition Cost?

  • We put a value on our average payday loan customer’s Lifetime Value.
  • Then, we subtract our costs to create and deliver payday loans to our customer over the entire relationship we maintain with our customer.
  • We subtract our Overhead (minimum recurring expenses to continue in business (salaries, rent, utilities, phones, etc.) divided by our total customer base (fixed costs) we’ll need to stay in business over this time period.
  • Multiply the result by 1 minus our desired Profit Margin and this reveals our Allowable Payday Loan Customer Acquisition Cost – APDLCAC.

Simple, eh!


Assume we are simply awesome at servicing our payday loan customers once we latch onto them; I mean acquire them!

Say our typical customer Lifetime Value is $2800 over 10 years. (4 loans/yr X 10 years. Avg loan is $400 at $17.50/$100 = $2800 fees)

And let’s say the costs to create and deliver this customer is $500 over this 10 year period. That leaves us with $2300 in revenue per payday loan customer served.

And let’s say our Overhead expenses are $1,000,000 over the same 10 year period and we serve 2000 customers.

Fixed costs = $500 ($1,000,000/2000 customers = $500 )

This leaves us with $1800/customer before marketing expenses ($2300 – $500).

Assume  our goal is to achieve a 60% profit margin. We can spend a maximum of 40% on marketing costs.

Thus, our APDLCAC = $720 per customer ($1800 X .40).

So… any customer we “buy” for $720 or less is a bargain!

PS: Want to pay $100 for FUNDED loans? That’s correct. We have a seriously experienced lead generation company offering loan leads for $100 each – AND YOU ONLY PAY IF YOU FUND THE LOAN! [Reach out with your contact info and “100 Funded Loans” in the subject to Jer@PaydayLoanIndustryBlog.com.]

NOW, what if these payday loan customers are using your other services as well? You offer car title loans? Installment loans? You buy scrap gold? You sell money orders? You cash checks? You offer mobile phone service? You do tax work? What’s that do to your Lifetime Customer Value number?

What? You don’t like my assumptions? Define overhead? Is that “gross” Profit Margin? Yep, you may find this controversial or even simplistic. But it got you thinking, didn’t it?

For more customer acquisition cost insights, study our “Loan Bible” and read:
“The Personal MBA: Master the Art of Business” by Josh Kaufman.



What’s ALICE Got to Do With Payday Loan Customer Demographics?

Alice in Wonderland 3-Blackpool Illuminationsphoto © 2010 Chris Cox | more info (via: Wylio)
I talk to entrepreneurs researching the payday loan industry everyday. Typically they’ve heard about all the money we’re making and they “want in.”

One common misconception these newbies have, among many, is that the typical payday loan customer is “down and out;” that they’re the “dregs of society.” These entrepreneurs usually begin the conversation by describing a “great location” they’ve already “locked-up” in what can best be described as a “skid row area.”

Man, they don’t get it!

Payday loan customers have jobs. Payday loan customers have bank accounts. Payday loan customers have the ability to pay back their loan!

Our payday loan customer is the Walmart customer; the blue-collar, white-collar employee making $18,000 to $48,000 a year!

And MOST IMPORTANTLY what we all need to understand is that this segment is GROWING!

There is a world-wide shift occurring in the advanced economies! The total number of employees in the service sector and other lower paying jobs is expanding. Higher skilled, higher paying jobs are going off-shore to developing countries where wages are lower.

This shift is so pronounced there is even a name for this market segment; it’s ALICE (Asset Limited Income Constrained Employed).

These are our people! Embrace them!!

As Jeff Weiss with Dollar Financial pointed out in a conference call, “The average wage rate for ALICE is shrinking against the rising tide of higher costs for food, gasoline, health care and other basic necessities.”

“In such an economy, where the margin between personal income and the cost of living is continually narrowing, our products and services can provide a real benefit for consumers and small business owners who may be confronted from time-to-time by an unexpected auto repair bill, a medical bill, or the need to replace broken or obsolete equiptment in order to keep their small businesses operating. The number of ALICE people are increasing around the globe…”

So… bottom line, more and more consumers around the world need our products and services! Banks, credit card companies and economic conditions are literally pushing ALICE right into our arms!

The future REALLY is ours!



Payday Loan Profits – Cash America Coninues to Grow and Prosper

The Associated Press ran another story this A.M. regarding the purchase of 39 pawn shops by Cash America International Inc.

Their headline reads:
Cash America buys pawn shop chain for $70M

They went on to write, “Cash America’s first-quarter profit rose 34 percent on a revenue increase of 17 percent, helped by higher revenue from its cash advance business.”

So… the big, sophisticated guys and, from what we hear, many of the small players operating under the radar, continue to expand to increase market share and to achieve record profits. It appears they’re certainly not sitting on the side lines at this juncture in the economy.

Read the original Article here:
Cash America continues to grow and prosper…