The #1 Marketing Tool Your Pawnshop is Overlooking

I’ve talked to a whole lot of pawnbrokers lately about marketing, and specifically how much they are spending on advertising for their pawnshop. In doing this, I’ve heard a wide range of answers from $400 a month to $4,000 a month. Some of the larger pawn shops even reach in the $10,000 to $20,000 a month range!

These numbers blow my mind.

Not because they are too high, or too low – but mainly because we as an industry throw money around to whatever and whoever we believe can get us the results we want in marketing our pawn shops. We have no problem spending $5,000 on Google Adwords or $500 on Facebook Ads and assume that it’s working, but is it really?

I believe there’s an untapped marketing resource that already exists in our pawn shops today. I also believe that this untapped resource is the competitive advantage that the pawn industry has over any other business that exists.

That untapped marketing resource? Cash.

Cash is what drives your pawn business. It gets people in the door. It gets product in the door. It’s the reason that customers are staring through your front door at 8:47 AM when you don’t open until 9:00 AM. Cash creates customers.

So – why are we spending this precious resource on ads that may or may not work? I’d like to propose a different strategy on where to spend those advertising dollars.

Pawn & Buy Literally Everything

How much product are you turning down on a daily basis? Let’s say a customer walks in with a Dyson vacuum from 1982. Brand new customer, never been in your pawnshop before.

Do you make an offer on it, or do you turn it away?

I’m willing to bet that most of us would pass on it. Odds are, you can’t sell it and the customer’s not picking it back up.

But what if we started to look at this from a different point of view. Instead of looking at this as a pawn or buy transaction, why not look at it as a marketing expense?

So – instead of turning down that vacuum, you give the customer the exact amount they wanted and you put ‘advertising’ in the note section of the pawn or buy.

Here are two things that could happen from here.

1. Customer pawned it and actually for some insane reason picked it back up. You have a new customer, and you made money.

2. Customer sold it or defaulted on the pawn, you take the vacuum, throw it in the trash, and write it off as advertising.

The first scenario is obviously a win. You took a gamble and made money! Good job! But, the odds of the first scenario happening are low. In fact, you’re more likely going to experience the second scenario.

So what about that second scenario? Because it sounds like we just wasted money, right?

Wrong.

Here’s the deal. You and I both know that if you pawn that 1982 Dyson for the customer and give them the amount they want – they are 100% coming back to your pawn shop next time. They will never go to another shop because no other shop will pawn their 1982 Dyson vacuum for them.

Here’s the cool thing – they own more than a 1982 Dyson Vacuum. One day it will be their TV, the next time after that it’s their Playstation 4, and the next time it will be the .75 CT Diamond Ring they bought from your pawnshop last March.

So – did you waste $50 on that 1982 Dyson vacuum, or did you just buy yourself a new customer for $50? I’ll let you be the judge.