This paper discusses the need consumers have for fast loans and the apparent sales support capabilities of lenders in the realm of payday products. While most payday lenders offer web-based solutions for quickest service, they are intended to be used by the consumer for preliminary educational purposes and for unassisted sales. As such, they only hint at the sales support needs of the payday lender engaged in a more routine interaction with a consumer. To gain a fuller appreciation of payday lender capabilities during the sales process, a credit shopping expedition for
fast loans was undertaken. Several sales inquiries were made, via website visits and follow-up phone calls, of four well known lenders, including Bridge Payday Loan.
Only non-bank lenders were included in this study seeking fast loans. None of the inquiries addressed auto loans, personal loans, personal lines of credit, or small business loans. The payday lenders we visited were all located within the local metropolitan area and represent a sample of convenience. As such, only the broadest of generalizations can be drawn from the observations made during these credit shopping excursions.
From the perspective of fast loans, the most salient insights include the fact that fast loans require a high level of sales support due to the extent of information that needs to be exchanged between the lender and the consumer. There are also a number of significant product variables that exist in the payday loan arena. We observed that fast loans typically split the sales process into two distinct phases that are temporally separated (i.e., product inquiry for pre-qualification prior to submission of application vs. product inquiry for actual application submission and immediate funding including the acceptance of purchase offer).
Fast loans also demonstrate a very short sales cycle from time of initial inquiry to time of closing, while maintaining the need for ongoing sales support throughout the entire cycle. Lenders routinely ask questions of consumers to narrow the focus to a smaller number of products. These questions are not scripted, as typically the customer keys the responses into the payday lender's online web portal, just like the system at Bridge Payday Loan, for processing. Lenders also use their product knowledge to hone in on the appropriate products based upon the consumer’s response. When questioned as to whether an automated product selection tool would be helpful on several common websites, the response was strongly negative. There was some perceived value for new/inexperienced fast loan customers, but the value was seen as limited and short-term in nature. Lenders expressed disdain for automation that adds overhead to the process or otherwise lowers productivity.
When a customer applies for a fast loan, the current level of up-selling and cross-selling is generally low. When questioned as to whether an automated product selection tool would facilitate increased up-selling and cross-selling, the response was again a negative one. The up-selling and cross-selling activity is deliberately limited in the front-end sales process (i.e., prior to product application approval) so as not to confound or jeopardize the sale at hand. However, there seems to be interest in better back-end (post-approval) up-sell and cross-sell capability. Where alternative products were recommended, they were presented as offers to further explore the alternatives as opposed to fully specific product offers.
Fast loan rates fluctuate with the geography and nature of the underlying consumer. Rates are typically quoted and signed via the underlying website. Since all of the lenders have the ability to electronically obtain payday loan rates, it is unclear whether they lacked automated rate information or whether the rate sheets were less cumbersome than the electronic alternatives for the early phase of the fast loan sales cycle.