WOW! Interesting at least to me. This payday loan industry blog receives a LOT of daily traffic. I just happened to look at the top keyword searches. Here they are: “Indian loans-indian reservation loans-indian payday loans…” Our telephone inquiries and emails reflect this as well. There’s a TON of interest by Lenders, tribes, the media, hedge-funds, etc. If you desire specific information about the tribal – sovereign nation model, visit Allen Parker’s web site or call him at: 951-260-8149.
THE BLOG
24
Sep
Sep
From Optirate, “Banks have the misfortune to be confronting the discounters just when marketplace and legal changes are drying up some of their traditional revenue sources, like packaging sub-prime mortgages and gouging people with overdraft fees. An economist at a bank regulatory agency (who asks for anonymity) estimates that $25 billion a year of bank-fee revenue is evaporating. That’s a lot for an industry that netted a pretax $104 billion last year.”
Hmmm… might be a partial explanation for the continuous attack on micro-lenders and the payday loan industry by banks and credit unions? Who do you think helps to fund our critics? It certainly isn’t our customers!
Read the article at Optirate in its entirety. Need for bank branches? Delivery of funds to smart devices? Lot’s of ideas to process…
18
Sep
Sep
I love to talk about the loan shark… I mean payday loan and micro-lending industry. I’m lucky! I receive calls and emails from around the world.
So… I’m talking to Charlie B., a silicon-valley buddy of mine who’s been exploring the micro-lending space for a while. He begins to tell me about his trip to Brazil. I figure it’s another travelogue story and he’ll bug me about friending him on Facebook so I can kill my time looking at his pics. Next, he’ll insist I subscribe to his Twitter feed and follow his tweets through the Rio Airport.
BUT NO! Charlie has a coconut story to share! Yeah, COCONUTS!! (Hang-on payday loan fan, we’re headed your way!)
Charlie speaks Portuguese… has a wife from Brazil. (Probably another great story there but let’s FOCUS.)
Anyway, Charlie strikes up a conversation with a guy pushing a street cart selling coconuts. Having an interest in all things business, Charlie delves into the intricacies of a coconut street cart vending business. Turns out this street cart vendor got a job 15 years ago selling coconuts using a cart he “rented” from the owner of the cart. After about 5 years working the streets of Rio selling these coconuts, the vendor managed to scrape together $500 from savings, family and friends and he bought his own cart. Long story short, 5 years later, Charlies’ new “friend” owns 15 carts. He rents out 14 of them to his “employees” who are farther down the economic food chain. Over the course of the past 20 years, this street vendor entrepreneur has evolved from the bed he rented in a shack 20 years ago, to his own home and a car he owns today! He’s put his 4 kids through school…
Don’t worry Payday Loan Fan, I’m getting there! Sheesh!!
OK, here’s the BIG IDEA!!
Go to your local community college and talk to the professor who runs the web curriculum department. Today, all community colleges teach courses on building web sites/blogs. Tell her you have an “intern program” for a couple of her best students. You’re willing to pay a flat fee (say $300) and provide an opportunity for the students to enter the real world of commerce, work with a “real client” – YOU – and build their portfolios. You want a basic site/blog set up enabled with Twitter, Facebook, Skype, yada, yada, yada… NOTE: at this stage, I’m not talking about a full-blast data base driven, secured application page …. Rather, just a simple, elegant web site (Use WordPress!!) focused on local search and your specific community.
On this site, announce 5% of all gross profits will be donated to an entrepreneur IN THE LOCAL COMMUNITY to help them launch their idea into a business. Setup an account to contribute funding for this. Now the really hard part: Find a local homeless or economically challenged character in your community with an idea who you can serve and mentor. Help them take their idea to the next level. Enable this entrepreneur to LAUNCH. How to discover the right candidate? Get creative! Keep your eyes open. Tell everyone what you’re doing. Find your coconut pushcart entrepreneur! A taco vendor. An artist. A fashion designer. A student. A baby-boomer. Look around you! Place a POS (Point-of-Sale) piece in your store(s).
You, an intern, or a member(s) of your Team – an advocate – will write/Blog/follow up/Tweet/Facebook your efforts and your chosen entrepreneurs’ progress! Stay involved in the process. Advise, counsel, make introductions to a bank, the SBA, a wardrobe makeover non-profit, provide a phone, financial advice… whatever it takes! Do it!! Make mistakes! Evaluate! Adjust! Proceed… Fail. Start again!! Allow your employees and customers to comment on your web site. Enable them to add to the conversation. Make it easy. Encourage it. You probably have someone in your organization who already “gets” and participates in this “social media thing.” Have you identified someone on your Team who will not stop accessing Twitter and Facebook? This is your ADVOCATE! Give her a little direction and let her run with this project. Some negative comment is written about your company or our industry? Address it! Explain our side logically and straightforward. Keep your response civil, informative, factual, gracious and honest. Engage!
You’re a payday loan brick-n-mortar serving the local neighborhood? Then this is a no-brainer for you! Oh, you’re an Internet payday loan company? Look at your DATA! Where do the majority of your payday loan applicants originate from? Detroit? Miami? LA? Great!! Focus on a local oriented campaign/web site to accomplish this new imperative.
This is about INTENT! Your INTENT is to contribute to the community you serve; to make it slightly better. Do not grandstand this. Do not launch fireworks and make a grand announcement. Just allow this to go viral if it can. If it doesn’t? So what? Do it any way! You’ll feel GREAT! And so will everyone you touch.
The payday loan industry gets nailed every day by the media, consumer protectionists, regulators, our competitors (banks and credit unions)… even by our dogs.
And I receive calls every day from payday loan, check cashers and car title lenders who want to know how to improve their business, their marketing efforts, the pride they have in the Team they’ve built and the way we’re perceived by the world.
Don’t run from the light! Don’t scurry off into a dark corner every time our industry is maligned! OUR CUSTOMERS LOVE US! Don’t avoid the media and controversy! Embrace it! Leave the herd! Stand out and take a chance! Do it differently!!! We offer a valuable service, we help our community and we’re proud of what we do! Hell, we even create a few jobs!
NOW! Build your fund, hire your interns, and find your coconut entrepreneur! AND ENJOY YOURSELF!
Got an idea? Need funding? Have funding?
Call… Talk… Explore…
Jer
Jer@PaydayLoanIndustryBlog.com
702-208-6736
25
Aug
Aug
The future is HERE! Want proof? Read below. When the big boys get it, could it be too late for the rest of us?
Got an idea? A solution? Need funding? Connections? Got a bolt of lightning locked up in your jar and need some help unscrewing the lid?
Call Me! Email Jer!
702-208-6736 PDT
Want a glimpse into the future of the payday, car title, pawn,stored value cards, and peer-2-peer (P2P) industry?
Here it is, from a Dollar Financial Press release: Dollar Financial Corp Changes Name to DFC Global Corp.
BERWYN, Pa., Aug 24, 2011 (BUSINESS WIRE) —
Dollar Financial Corp. (NASDAQ: DLLR), a leading international diversified financial services company serving primarily unbanked and under-banked consumers for over 30 years, today announced that it has changed its legal name to DFC Global Corp. A new logo accompanies the change. The Company will continue to trade on the NASDAQ stock exchange under its current ticker symbol “DLLR”.
Commenting on the name change, Jeff Weiss, the Company’s Chairman and Chief Executive Officer, stated, “The new name reflects the transformation of our Company from its origin in 1979 in the United States to what is now a global enterprise, operating in seven countries across North America, the United Kingdom and Europe. We feel this broad geographic expansion combined with our expanded product portfolio, which now encompasses secured pawn lending, consumer lending, small business advances, debit cards, gold purchasing, money transfer, check cashing, foreign exchange and many others, necessitated a modification to our corporate identity to more accurately reflect our continuing global expansion strategy and our diversified operating platforms.”
Jeff Weiss, continued, “Our products and services are squarely focused on what we call the ALICE demographic (asset-limited, income-constrained, employed). The numbers of ALICE people are increasing all around the globe driven by a significant on-going shift within many of the more developed economies of the world towards service sector employment and lower paying jobs, as manufacturing and some other higher paying occupations are off-shored to developing countries where labor is less expensive.
In order to meet this significant un-met global demand, we expect to continue to invest in new technologies and sales channel strategies through both internal development initiatives, as well as the acquisition of new businesses, which will allow us to deliver our many products and services through the most convenient means our consumers are accustomed to, and comfortable with, in each market.
This collectively may include a “bricks and mortar” store based model, a global internet platform, the in-home loan servicing model widely used throughout Poland and Eastern Europe, and other new technologies and platforms that we are either in the process of developing internally or are considering acquiring. I would like to thank our more than 5,000 employees now spanning seven countries, who through their dedication and tireless work ethic, continue to transform our Company into the world-class
organization it is today, as we strive towards our vision to be the first choice for financial services to the unbanked and under-banked consumers around the globe.”
So… like I said, the future IS HERE! Got an idea? A solution? Need funding? Connections? Have money to put to work?
Got a bolt of lightning locked up in your jar and need some help unscrewing the lid?
Call Me! Email me!!
Jer
702-208-6736 PDT
Jer@PaydayLoanIndustryBlog.com
Read the entire Press Release here:
http://phoenix.corporate-ir.net/phoenix.zhtml?c=177357&p=irol-newsArticle&ID=1600140&highlight=
The Team at Trihouse Payday Loans
702-889-9555
email us: Jer@PaydayLoanIndustry.com
http://paydayloanindustry.com/cash-advance-store.html Knowledge Store
16
Aug
Aug
Installment & Payday Loan Customer Acquisition Costs
Getting a payday loan customer into your store or on your website 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 smartphones, 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 title loan, or a 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!
Example:
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.
PDF: 500+ Pages $150.00
How to Start or Improve a Consumer Loan Business: Storefront or Internet anywhere!
