Face it! Paying your payday loan employees $8.00 to $12.00 per hour just won’t get the job done. You have to incentivize your people to achieve your goals.
Doesn’t seem fair does it? You’d think a decent hourly wage with a couple of breaks and lunch thrown in would do it. But it doesn’t.
You want a tip? Figure out what you’re trying to achieve and pay your people a bonus to get it done.
You want examples? Here’s what works for us.
When we open a new payday loan or scrap gold location WE WANT TRANSACTIONS! We want to fund loans; as many as we possibly can. So… after checking our competition, studying the demographics in our area, formulating our advertising spend and determining how much money we have available “for the street”, we give our payday loan and car title loan store reps a minimum target and pay a bonus for every transaction exceeding this target. WE PAY THIS BONUS DAILY!
Now, the exact numbers will vary depending on the size of the market we’re in. But our employee bonus system looks something like this.
Our goal week 1 in a new market might be to fund 3 loans per day per employee. (In small markets with plenty of competition we might only have one employee working 10 hours/day.) Our bonus system might pay $5 per funded payday loan beginning with #4 for the day. So should our employee get 6 payday loans funded that day, they earn their hourly wage plus a bonus of $15 PAID AT THE END OF THEIR SHIFT.
(REMEMBER! That new payday loan customer could easily be worth $5000 or more in fees over their lifetime.)
We might implement this bonus system weeks 1 through 4 and then adjust it to a minimum of 6 per day week 5.
Don’t forget to adjust! Perhaps by week 30 you’re more concerned about collections than you are about transaction volume. As discussed in our Payday Loan Collections Manual, place your overdue receivables in buckets; 0 – 30 days, 31 – 60 days, 61 – 90 days, 91-120 days, and 121 days+. You might pay your employees a percentage of dollars collected; a little more for each bucket. Or a flat fee per contract paid on.
Now, I’m not going to discuss the justifications for paying IMMEDIATE bonuses to an employee for simply doing their job. And we don’t need to quibble about the actual numbers/goals other than to say you must make the target a challenge, communicate it to your employee, MAKE IT SIMPLE and yet be achievable.
BOTTOM LINE, THIS STRATEGY WILL BUILD YOUR BUSINESS!
This system works for both our stores and our Internet business and for a multitude of products we offer.
Good software makes this bonus system MUCH EASIER TO IMPLEMENT. See the software chapters in our Payday Loan Manual and our Payday Loan Internet Report.
Empower your people. Set them free. Trust them. The amount of trust that Google puts in its employees and how amazingly those employees deliver results is impressive. This works for our industry as well.
Organize and simplify. (You really should read, “The E-Myth Revisited“)
Finally, as a business owner, the need to implement a bonus system to motivate your employees to perform their job may seem REALLY UNFAIR. GET OVER IT! JUST DO IT!!
What do you think? Jer@PaydayLoanIndustry.com
What’s your biggest problem? Jer@PaydayLoanIndustry.com
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