How You Can Grow Revenue by Buying Payday Loan Leads
Are you still managing your payday loan lead generation in-house? Chances are you’re bleeding cash. Your return on investment could be significantly higher if you purchased payday loan leads, rather than generating your own.
Whether you are a first-time lead buyer or have experience with payday loan ping trees, read this lead generation guide to learn more about payday loan lead generation and make smarter buying decisions to grow your lending business.
Growing Your Business
If you are looking to grow your business, you need to increase your return on investment. That applies to all the ad dollars you spend each year. With traditional marketing campaigns, you pay per views or clicks, not actions.
Your conversion rate can vary greatly depending upon the ad platform. Display campaigns are great for branding, but the buyer isn’t far enough along the buyer journey to convert at a rate that can yield a high return on your investment.
Search campaigns tend to perform better, since they require the consumer to search for a specific phrase before viewing your ad. Still, CPCs are on the rise and not every click leads to a conversion.
No, to grow your business you need to pay for leads not clicks or views.
Who uses payday loans?
Who uses payday loans? Here are some short-term loan usage demographics:
- People between the ages of 25 and 49 are more likely to use payday loans.
- People over the age of 70 are the least likely to use payday loans.
- People who haven’t completed a four-year college education are more likely seek short-term funding.
- African Americans are twice as likely to take out a payday loan than consumers of other races.
- Those households that earn less than $40,000 per year are about three times more likely to request a payday loan than those with higher incomes.
- People in households that earn between $15,000 and $25,000 are the most likely to seek payday loan funding.
- Renters are twice as likely to use payday loans as homeowners.
- Parents are more likely to apply for payday loan funding than people without children.
- Those who are divorced or separated are twice as likely to apply for payday loans than any other marital status.
About 69 percent of payday loan customers take out a short-term loan to cover recurring expenses such as rent, food and credit card bills. The majority of payday loan customers have an ongoing cash-flow problem. Only 16 percent of payday loan borrowers use the product for emergency expenses. Eight percent of consumers use payday loans for something special.
Knowing your audience is a vital part of lead generation. By understanding who your customers are and what they use funding for, you can tailor your marketing campaign copy and targeting. Our experienced lead sellers use this type of information to drive qualified applicants to our payday loan ping tree.
The State of Payday Loan Marketing
While approximately 12 million Americans take out payday loans each year, the industry is highly competitive. The nation has about 18,000 payday loan stores, which doesn’t include short-term loan websites. There are more payday loan stores in America than there are McDonalds.
While the demand for payday loans and short-term loan products remains high, it can be challenging to compete with industry giants who lead SERP rankings, own multiple chains and make it through Google Ads restrictions.
Advertising short-term loan products is also becoming increasingly difficult. Back in May of 2016, Google made a decision to ban payday loan ads, although this didn’t affect lenders across the board, it did prevent many from advertising short-term loans on the search network. Facebook followed suit and began cracking down on payday advertisers.
Today, it’s nearly impossible to launch a Facebook ad campaign or even boost a post relating to payday loans without getting your ad account banned by the network. Facebook rarely reverses its decision on ad bans, so you’ll need to create a new account to advertise moving forward. Twitter has similar ad policies, all though the rules are a bit more relaxed.
Email marketing was one of the best ways to reach payday loan customers for several years. It remains a great way to reach potential customers, but with new GDPR restrictions, you might find it difficult to increase your payday loan list size.
As of May 25th, 2018, the new GDPR laws took into effect which raised the standard of consent for subscribers. That means the way your company has collected consent from subscribers in the past might not be compliant anymore.
Some of the new rules include:
- Consent requires a positive opt-in, not a pre-ticked box.
- Consent requests must be separate from other terms and conditions
- You must make it easy for people to withdraw consent and provide instructions on how to do it.
- You should keep evidence of consent
- Check your former consent practices and your existing opt-ins
In addition to navigating these new subscriber laws, getting into the inbox isn’t getting any easier. If you don’t have an experienced email marketer on your staff who specializes in payday lending, you might find it difficult to grow your lending business.
Traditional affiliate marketing is a great way to increase ROI, but you might not be able to secure the steady stream of qualified leads you need to grow your subprime lending operation.
With networks like ArrowShade, you can purchase payday loan leads directly using ping tree technology. The network manages the sellers, prescreening them, negotiating pricing, providing reporting and releasing payments. It’s the network’s responsibility to monitor performance, fraud and ensure quality. You simply buy the leads you need when you need them.
Where can you advertise payday loans?
In addition to email marketing, there are several mediums payday loan lenders can go to promote their brand and product. Television is still a safe place for payday loan advertisers. In addition to traditional cable networks, you might want to consider advertising your brand through streaming services like Hulu.
As of May 2018, Hulu surpassed 20 million subscribers in the US. That number is up from the 17 million that the company reported back in January of this year. Subscribers grew by 3 million in just five months.
Radio is another safe place to advertise payday loans and your store or website. In addition to traditional radio, you can advertise on satellite radio like SiriusXM channels or services like Pandora.
SiriusXM satellite radio advertising revenue increased 8% in Q1 of last year to $1.3 billion. With 51 million monthly radio listeners, it’s a great place to run your ads. The cost to advertise on SiriusXM radio starts as low as $25 per ad spot.
As of 2015, Pandora had 250 million registered users, with about 81.5 million active users. Pandora charges advertisers on a CPM basis. Visual ads on Pandora can cost an average of $5 to $7 CPM. Which means that for every 1,000 people Pandora shows your ad to you are charged $5 to $7. Video ads have an average CPM of $15 to $25, and audio ads cost an average of $8 to $12 CPM.
Smaller ad networks also allow payday loan advertising. Networks like the native search platform AdMarketplace and Advertise.com provide a variety of solutions to help advertisers reach their target audiences including payday loan lenders. There are also content marketing platforms like Outbrain, that create opportunities for native advertising.
While there are still many ways to advertise payday loans and promote your brand, there is always a risk your ad test won’t garner the return on investment you seek to grow your business. Any ad campaign requires testing and optimization.
Tracking results on TV and radio spots can be difficult. Display ads require you to create and test ad copy, images and landing pages. Without an experienced in-house marketing team, these investments can lead to major losses.
By purchasing leads directly from a ping tree, you are leaving the tricky marketing process to professionals while you only purchase leads that fit your predetermined criteria.
How does a ping tree work?
A ping tree is a type of lead distribution software that networks use to distribute leads to buyers. The lead generator will post leads to buyers who have the option to purchase based on the lead data they are shown.
As the buyer, you simply identify how many leads you want to purchase and at what price points. Ping trees can vary, but many range from $2 per lead to $120 per lead. Bidding higher gives you priority over other lenders. In other words, you get dibs. Typically, the lower the price per lead the lower the quality.
When selecting a bid price, consider your ROI goals. You may want to test high and low bids to see what price point provides the best returns.
In most cases, you’ll be able to set lead filters. These filters help the network determine if a lead is one you would want to purchase. An example of a filter is location. As a lender, you probably are limited in terms of where you can lend. You can set up lead filters, so that you will only have the opportunity to purchase leads in your geographic territories.
Ping trees work in real time. A consumer visits an affiliate or publisher’s website to apply for a payday loan. The customer completes the form and their information is sent by the publisher to the ping tree. The ping tree processes the information provided in the form within seconds, and then uses filters and bids to select who to show the lead information to.
The payday loan lead buyer is shown answers to select data fields from the loan request form. If your bid is high enough, and the lead matches your filter criteria, you could purchase the lead and win the business.
A ping tree connects consumers and lead buyers in real-time, typically within a matter of seconds. This prevents the lead from going stale and increases the conversion rate for the buyer. Additional ping tree features can include:
Lead validation – this ensures the quality of the lead. For example, is the email address in a valid format? Is the phone number, zip code and state valid?
Deduping – some ping trees can prevent lead buyers from seeing duplicate leads they have already seen.
Schedule filters – the lender can create a schedule, so they are only shown leads on days and times when they are able to take action.
Lead caps – you may only want a couple leads a month or maybe you need a hundred. Set a cap so you only buy the amount of leads you can afford or that meets your goals.
Why buy payday loan leads from ArrowShade?
Despite marketing limitations, the market for payday loans is there. With 12 million Americans using payday loans each year, chances are your business could be providing more loans.
There are several payday loan networks out there, but ArrowShade is the first affiliate network for short-term loans that is wholly owned by a tribal sovereign. We take a unique approach to e-commerce. Buying payday loan leads from ArrowShade helps expand your marketing presence into sovereign channels.
With ArrowShade’s sovereign performance-based marketing solutions you can see a greater return on your investment than with traditional marketing campaigns. Our expansive network of affiliates create uniquely targeted campaigns that drive leads to your business.
At ArrowShade, you will also receive a dedicated account manager that will work with you to optimize campaign performance. While some networks boast about driving thousands of leads, we focus on quality over quantity. We know every poor lead is a waste of time and capital, which decreases your return on investment.
Our superior technology provides actionable insights and analytics to help you make smart campaign decisions and maximize performance.