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| Channel | Strengths | Challenges | Best Use Case |
|---|---|---|---|
| Social Media | Cost-effective, specific targeting | Requires ongoing engagement | Urban markets, younger audience |
| Word-of-Mouth | Reliable borrowers, high margins | Requires active referral strategy | Local networks |
| Television/Radio | Broad reach | High costs, limited targeting | Rural/suburban markets |
| Print Media | Low entry cost (classifieds only) | Minimal effectiveness | Small, local markets |
| Lead Providers | Scalable, quick access to leads | Quality inconsistency | Supplement other channels |
These insights help BHPH dealers refine acquisition strategies, improve payment performance, and maintain a healthier portfolio.
Social media plays a major role in helping BHPH dealers attract new customers. Analyzing payment behavior across platforms highlights some interesting trends.
Facebook and Instagram stand out as effective tools for reaching customers with reliable payment histories. Their advanced targeting options and wide audience reach make them ideal for connecting with borrowers who are consistent with payments.
Performance, however, isn’t uniform. Urban dealerships see better results on visually-driven platforms like Instagram, while suburban and rural markets benefit more from tools that foster community engagement.
To get the most out of social media, dealers should focus on these strategies:
Longer engagement on these platforms is often linked to dependable payment behavior. On newer social media channels, quick conversions may require tighter lead screening to ensure quality.
Maintaining a steady and interactive social media presence is key to building a strong customer base. These insights also serve as a useful reference point for evaluating other customer acquisition methods.
Word-of-mouth referrals are a highly effective alternative to digital channels. They often lead to better outcomes, including stronger payment histories and consistent performance.
"How can we do what we do so well that our customers can't help but tell their friends about us?"
These strategies provide a strong foundation for evaluating and comparing performance across various channels.
Traditional media, like television, radio, and print, offer distinct advantages and challenges when it comes to reaching potential BHPH (Buy Here Pay Here) customers. While these channels provide broad exposure, their effectiveness varies depending on the medium and market conditions.
Television can reach a wide audience, including smaller surrounding towns. However, this broad coverage often comes with high costs and difficulty in targeting specific areas.
"Both of those traditionally are very expensive, and it's usually tough to chart the response that you get. One of the drawbacks to radio and TV is that the reach is too broad, and most buy here pay here dealers want their customer base to be fairly close and local so that making their payments every week is not a big challenge."
– Mark Dubois, CarBiz USA
Radio offers better local targeting compared to television and comes at a lower cost. This makes it a practical option for reaching nearby customers while still influencing key portfolio metrics.
| Media Type | 3-Month Response Rate | Key Advantage | Primary Challenge |
|---|---|---|---|
| Television | 146 responses | Broad geographic reach | High cost ($26,000/month) |
| Radio | 100 responses | Local targeting | Limited reach range |
| Newspapers | Poor performance | Low entry cost | Minimal effectiveness |
Newspaper advertising struggles to deliver results, but free classified publications can be more effective in local markets, offering measurable outcomes at a lower cost.
Broadcast media effectiveness varies based on local market conditions, and regular performance tracking is essential to ensure a good return on investment. The next section will compare these findings with digital channel performance.
After examining insights from both digital and traditional channels, let’s explore how third-party lead providers impact portfolio performance. These providers supply Buy Here Pay Here (BHPH) prospects, and their lead quality, along with verification processes, plays a crucial role in determining portfolio outcomes.
Checking customer financials thoroughly is a must. Equifax highlights that traditional credit data alone often falls short in predicting payment behavior within the BHPH market.
When analyzing customers sourced through lead providers, data from Agora Data shows that auto delinquencies averaged 19 days in March 2020. By April 2020, this figure rose to 21 days - an increase of 2 days.
BHPH dealers can improve lead performance by focusing on:
"BHPH lenders need a better understanding of their customers' ability to pay." – Equifax
Modern tools provide automated verification, real-time credit reporting, and smoother payment processing. These technologies align with the goal of using measurable portfolio metrics to evaluate and optimize every acquisition channel.
Regularly tracking portfolio metrics helps uncover trends and fine-tune lead provider strategies effectively.
This section pulls together insights from earlier analyses to compare performance metrics across different acquisition sources.
The data shows that word-of-mouth referrals bring in customers with reliable payment histories and longer retention. Social media channels stand out for reaching specific demographics at a lower cost. On the other hand, traditional advertising tends to have higher acquisition costs and inconsistent payment performance. Third-party lead providers also show mixed results when it comes to customer quality. These patterns align with earlier findings from both digital and traditional channels.
Urban dealerships benefit most from digital strategies, especially social media campaigns. In contrast, rural markets perform better with traditional advertising and referrals. Referrals, in particular, are cost-effective and contribute to better long-term portfolio performance.
Using payment tracking and customer communication tools significantly boosts channel performance by reducing initial payment defaults. These findings provide a clear direction for refining channel strategies moving forward.
Based on insights from channel performance, these suggestions aim to simplify acquisition and documentation processes, improving portfolio quality.
Prioritize focused digital marketing efforts and thorough documentation to improve portfolio results. For example, Cherokee Auto Sales successfully improved their portfolio performance by leveraging search engine marketing in a strategic way.
These focused methods lay the groundwork for a strong documentation process.
To showcase portfolio quality to potential buyers, consider adopting these documentation practices:
After establishing strong documentation practices, integrating advanced technology can further enhance acquisition quality. Steve Campbell from Auto Credit USA highlights the importance of streamlined systems:
"The system helps my team follow up and never miss an opportunity."
Consider adding tools like smart credit lead forms and multilingual features to your website to boost lead quality. Lee Cavender of Cavender Auto shares:
"Finally someone has perfected marketing for Buy Here Pay Here Dealers."
This approach not only strengthens acquisition quality but also creates a clear, documented trail that appeals to potential portfolio buyers.
More than a decade of Ivan's career has been dedicated to Finance, Banking and Digital Solutions. From these three areas, the idea of a fintech solution called Debepxert was born. He started his career in Big Four consulting and continued in the industry, working as a CFO for publicly traded and digital companies. Ivan came into the debt industry in 2019, when company Debexpert started its first operations. Over the past few years the company, following his lead, has become a technological leader in the US, opened its offices in 10 countries and achieved a record level of sales - 700 debt portfolios per year.
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