Payday loans have come under a lot of scrutiny in recent years. In fact, they are often given a bad rap when all is said and done.
To dispel that image, these companies must use the right kind of marketing to get their message across to consumers.
Quick and Easy
The target audience for these lenders is someone with a job, but low credit scores.
The typical borrower won't qualify for traditional loans. They usually need the money right now, which is how these lenders market their products.
They appeal for several reasons:
• Online application with no faxing
• Answer in just minutes
• Cash in the bank as soon as the next day
• Short application that only takes a couple of minutes to complete
If you see ads for payday lenders, you will recognize how they promote these benefits.
The most successful payday loan companies offer multiple ways to apply. An online application is essential and most companies provide a phone number to apply over the phone.
As the following article shows, when you look at the history of payday loans, they began as brick and mortar stores and many still include physical locations today for the customer that doesn't want to provide personal information online.
More Than One Service
Many companies provide more than one service.
They may make it easier to pay bills by offering money wiring or bill payment services. Since most people that need a payday loan use it to pay bills, this offers convenience for the customer.
Smart payday lenders also include credit counseling or other financial management services. This gives them the edge over the competition and enhances their images of companies that want to help the customer instead of just preying on them.
Direct Marketing
Payday lenders have great results when they choose direct marketing as part of the strategy.
Not everyone has access to the internet and cell phone service, which is why flyers in strategic locations and brochures or letters mailed to the target audience, is an effective marketing strategy.
These are often seen in prescreened offers where the person is pre-qualified or even pre-approved for a loan.
One reason this is so effective is because the potential customer may be used to getting tuned down. The thought that he or she could actually qualify for a loan makes them more inclined to apply.
Payday Loans and Social Media
Payday lenders have been slow to embrace social media.
This may be partially because people who need these types of loans may not want others to know of their financial situation.
Those who are doing it successfully are using social networks to provide information to customers. They may explain complex financial terms in layman's terms or provide the latest news on lending or how to improve credit scores.
Payday lenders who have the most effective marketing strategy are the ones who are overcoming the predator image and re-establishing themselves as consumer informants and advocates.
They work to make payday loans beneficial for the customer as well as themselves.