It’s no secret that 2020 decimated loan balances across the country. In an October survey, 100% of pawnbrokers responded that over the course of the year, their loan bases were down significantly.  

Shortly after, the “loan tsunami” conversation began. Pawn conventions and trade shows throughout the year were focused on it.

Rightfully so.

When exactly will things return to normal and how can you ensure your customers are walking back into your store instead of a competitor?

While there isn’t one rule to bring customers back through your doors, financial institutions and retailers alike have zeroed in on customer loyalty as a key differentiator.

As a pawnbroker, you can lean into customer loyalty to not only rebound your loan balance but to far exceed it in 2021.  

Key Takeaways

  • Customer loyalty will be a key driver in how quickly you can rebound and exceed your 2020 loan balance.
  • Customer loyalty improvements have a big impact on your profitability
  • To increase customer loyalty lean into technology to implement a customer loyalty program, encourage customers to give feedback and act on it, and send event-based emails.  

Defining Customer Loyalty

Customer loyalty is the measure of a customer’s likeliness to do repeat business with a company. It is the result of customer satisfaction, positive customer experience, and the overall value of the goods and services a customer receives from a business. As a pawn operator, this is important because it is what keeps your door swinging by both new and existing customers.

In a post-COVID world, it is critical because eventually, the mass exodus of loans that walked out of your store will need a re-loan. As an owner, operator, or manager, your focus should be on each customer’s experience including in-store, on the phone, via mobile app, or online.  

Why Customer Loyalty is Important

Regardless of the size of your store or company, and no matter how many employees you have working the counter, customer loyalty is essential. A happy customer translates to more money spent in-store, more items in loan, bigger profits, and word-of-mouth referrals.  

It’s a fact. Repeat customs spend more. Not only do they have a higher average spend in your store, but the number also increases with the duration they have been doing business with you. Because they know what to expect from you, loyal customers spend 67% more on products and services than new customers.  

It is the 80/20 rule. Your most loyal customers make up 20% of your total audience and bring in up to 80% of your revenue. Because it is five times easier to retain a customer than to acquire a new one, if you focus on customer loyalty and providing your existing customers a superior experience at your pawnshop, they’ll continue doing business with you.  

Have you ever had a customer who brought you a loan for a TV, only to return months later with much nicer or more expensive items?

It is a test of trust.

You rarely get a customer’s best item the first time they walk through your door. After building trust and providing a safe, comfortable, and respectful environment, customers will return with items of higher value. As you focus on growing your loan balance in 2021, remember that your existing customers are an area you can simply tap into.  

A small increase in customer loyalty has profound results to the bottom line. A small effort that results in 5% better customer loyalty can boost profits by 25% or 95%. Existing, loyal customers spend more because they trust you, your employees, and your brand. Compared to first-time customers, returning customers spend close to 70% more money on products and services.  

Building Customer Loyalty

There are many ways to kick off a customer loyalty strategy and because many pawnbrokers are not focused on it, doing so will give you a competitive edge. The fastest and easiest way to build loyalty is to rely on automation tools and technology.

A lot of focus goes into rewarding your best retail customers, but when you need to be focused on loan balance growth, how are you focusing on your best loan customers?  

There are Three Top Ways to Build Customer Loyalty at Your Loan Counter:

1. Implement a Customer Loyalty Program

It is easy to tell employees, “We want to reward our best customers so make sure you lend the most.” But how do you systematically put something like that into place? Begin by rating your customers on a five-star scale based on total lifetime value (this includes retail sales, profit from buys and defaulted loans, eCommerce sales, and default rate) or solely on default rate.  

Once you have your criteria for grading customers, chose a percentage increase or decrease you’d like to give a customer based on their star rating.

For your best 5-star customers, you may be willing to lend 20% more. For a ½-star customer, you may want to lend 15% less to protect your margins in the likely event they default.  

You can either have the loan bump product built into your software platform or keep a manual spreadsheet to determine the amounts. Once your employees are trained to look at the star rating and suggested loan bump dollar amount, you are ready to start offering a Loan Customer Loyalty Product. This puts you ahead of your competitors and keeps your customers coming back because you loan the most and treat your best customers like VIPs.

2. Encourage Customers to Give Feedback and Act On It

Make it easy for your customers to leave a review and ask them to do so before they leave your store. In addition to gathering Facebook, Google, or Yelp reviews, gather feedback at the counter about why customers prefer to buy or get a loan from your pawnshop as opposed to the one down the street.  

Listen to the feedback and thank your customers for giving it to you. Aggregate the feedback to find patterns or areas of improvement and put together a game plan for addressing the most urgent or lowest hanging fruit.  Customers love to feel supported! Watch this short video that explains the benefits of Mobile Messenger and how it can improve the way you communicate with customers.

3. Send Transaction-Based eMails or Texts

Text message or email campaigns lose effectiveness the more you blast without segmenting your customers. It is critical to create relevant messages to targeted segments of your customer base.  

The best lists of customers to pull are dollars spent on retail sales, retail transaction count, dollars received on loan, loan transaction count, dollars received from buys, and buy transaction count. With these lists, you can send messages to retail customers about your loan guarantee program.

You can also target existing loan customers thanking them and asking if they need any additional help. It is critical to stay top of mind with your customers so that when they need a loan, they do no search and simply drive to your store.

When you excel in customer loyalty, your customers will continue to do business with your pawnshop which means your competitors lose out on potential revenue. Keep your customers happy and loyal so they continue to visit your loan counter.  Click here to read our other article to find out more about the customer experience.

About the Author:

Photo of Tally Mack Bravo CEO
Tally Mack | CEO of Bravo Systems

Tally Mack is a fifth-generation pawnbroker and eCommerce enthusiast. She loves traveling, being outside, and working out.

Before taking the reins as CEO, Tally served as Bravo's Vice President of Business Development, leading the company's sales and marketing organization. She's been instrumental in leading and executing many of the company's strategic shifts, including the acquisition of CompuPawn and the recent launch of

Tally earned her Doctorate of Law (J.D.) from DePaul University College of Law in 2013 after attending the University of Colorado at Boulder, where she earned her B.A. in Communication Studies. She also completed the Key Executives Program from Harvard Business School in 2013.

Tally is a pawnshop lover and eCommerce enthusiast—dedicated to the success of both her employees and customers!