Pawn Leaders

I share Three Things I learned at Social Media Marketing World that you can apply to your pawn business.

1. The customer wants an experience not just something to buy. 2. You need to entertain on Social Media 3. Create Superfans

Listen in on this episode as I expand more on these 3 topics.

Join us on Facebook at the Pawn Leaders Podcast Community.

Bob Moulton started as a computer programmer and an on-air radio personality. He went into the pawn industry in 1984 where he opened National Pawn three years later. There are currently 16 National Pawn stores, with the 17th opening in about 3 months, and over 130 persons are employed there. Bob received the NPA's Pawn Broker of the Year and Outstanding Community Relations award, along with local awards for integrity, entrepreneurship, business and marketing. His hobbies include traveling, boating, collecting watches and motor cars.

[01:39] Bob was exposed and gained an interest in the pawn business after his uncles and mother worked in the industry.

[02:13] Opening his first pawn store in 1987 made him realize how much hard work and money it took to start and run the business.

[02:41] Bob opened 3 stores in a short space of time and waited some years before opening the 4th and 5th; then took a long break before opening the 6th.

[03:23] What are the laws in your area as it relates to interest and holding periods? There's a 90 day period in North Carolina (30 days and 60 days past any due date). 20% fee + 2% interest. However, the 20% is capped at $100. Therefore if someone wanted a $10,000 loan on a Rolex, it would only generate a $300 fee. Anything over $500, you only get 2% more per month.

[04:01] 20% caps out at $100 and it drops where there's $100 the 1st month, $75 the 2nd and then $50 at 2%.

[04:27] "We're all about building a culture and we're all about hiring the best and the brightest and I believe that is what makes us so successful and makes it easier to run."

[05:04] Bob gives his staff bonuses if they are successful and therefore treat them as owners

[06:23] How do you instill passion into your team members? "Our mission statement is that 'We want to have the wealthiest and highest paid team members in the industry with a culture of trust and accountability'"

[07:25] It is important to trust your employees

[09:01] What are some of the biggest mistakes you've made?

• Growing too quickly (if understaffed and under-capitalized)
• Trying to operate big stores

[11:18] Training persons for National Pawn includes:

• Assigning managers to work with new members as a coach
• • Learn about writing transactions
  • Interacting with customers
• Hire energetic persons
• Smart camps (4 to 5 a year)
• Peer-to-peer training

[13:21] What makes a Superstar Pawnbroker? Someone that produces, believes in the company's values and presents the face of the business

[14:15] A focus group, of non-traditional pawn customers, was hired and asked about their perceptions of other pawnbrokers and the stereotypes were horrible

[14:55] Team members dress in black and white and this gives the business a professional look

[17:23] National Pawn donates musical instruments, school supplies and gives high school scholarships

[19:51] "We are the lender of last resort"

[25:05] How can one grow as a business owner? Word of mouth is a big factor and so is location

[28:01] Bob likes to go in to the stores and interact with people, while encouraging and recognizing staff

Visit National Pawn on Facebook for more information about the business.

On today's episode, I talk about a recent conversation he had with a fellow pawnbroker through FB Messenger. The conversation started from a post on Facebook that led to the simple question "How are you doing?" After going to several conferences with this fellow business owner, I felt ashamed because I had never taken the time to ask how the individual was doing personally. Tune in to find out how those four words led to a conversation about vulnerability and connecting.

Dave founded The Consultants in 2012 after realizing there was a market for the experience he developed within the last 32 years. Dave educates the precious metal dealers who are unaware of the federal guidelines associated with their business. He has over 100 clients that he helps navigate the local, state and federal regulations that many find burdensome and confusing. He owns 2 pawnshops since June 1996 (one in California and one in Oregon). Dave spent 15 years on the board of Oregon Pawnbroker's Association as a Secretary and Treasurer and is involved in passing legislation at the state level. Dave and his wife Robin have 1 son and live in Oregon. Dave talks about Anti-Money Laundering.

Dave founded The Consultants in 2012 after realizing there was a market for the experience he developed within the last 32 years. Dave educates the precious metal dealers who are unaware of the federal guidelines associated with their business. He has over 100 clients that he helps navigate the local, state and federal regulations that many find burdensome and confusing. He owns 2 pawnshops since June 1996 (one in California and one in Oregon). Dave spent 15 years on the board of Oregon Pawnbroker's Association as a Secretary and Treasurer and is involved in passing legislations at the state level. Dave and his wife Robin have 1 son and live in Oregon.

Dave talks about Anti-Money Laundering.

[01:50] Dave got tricked into being a pawnbroker by his friends, through starting a business

[02:34] After 3 years, Dave opened his own store, as he wanted to work for himself

[02:47] Working with the state legislation and being on the Oregon Pawnbroker's Association board made it clear that there were many store owners who were unaware of the complete operations of the business. They had to depend on others to help them.

[03:06] He sold his pawnshop and decided to go back into the pawn business, regarding compliance

[05:47] If you have a certain level of business you must have an AML (anti money laundering) programme in place. The fine for not having a programme starts at $25,000.

[06:18] Have a programme in place and identify someone in charge of the programme

[06:30] You must train your staff within 30 days of hiring, have an annual refresher training and do an audit of the systems to ensure everything is being captured

[07:48] What are 3 mistakes pawnbrokers are making today that are against federal regulations?

• Pawnbrokers do not have to fill out a CTR, they only need to fill out a 8300.
• There should be a backup programme.
• Taking deposits to the bank in less than $10,000 increments creates a red-flag from the IRS. Many pawnbrokers do not understand related transactions and how the $10,000 relates to that transaction.

[10:38] "I can bring $10,000 today and you don't have to fill out a form. It's $10,000.01. It's the penny that will get you every time."

[10:58] There's a 24 hour period that makes transactions related. The same household or account would link the transaction.

[13:16] Many reports count the in and out of money. It should really only show the money that comes in.

[15:02] The Feds stated that Operation Choke Point was no longer enforced, when this was not the case. Banks would get audited and the pawnbrokers will be seen as high risk.

[15:31] The new, smaller banks will take pawnbrokers with an AML in place

[28:18] Do not be caught by the IRS without the AML programme

[33:21] Contact Dave by email at [email protected] and via phone 503-970-7739.

Do not hoard inventory.

Many pawnbrokers are hoarding more than they are selling and therefore overpricing items in their store. Inventory should be turned over to get good money on valuable items.

Stop hoarding merchandise by:

1. Having a sale
2. Rejecting items that you cannot sell
3. Investing in property or things that can be beneficial to you in the future

"Stop hoarding merchandise. It affects you as a leader, it affects your team and it affects your bottom-line."

Chris Voss is the CEO of the Black Swan Group and author of the national best seller, 'Never Split The Difference: Negotiating As If Your Life Depended On It'; named one of the 7 best books on negotiation. He is a 24 year veteran of the FBI, and retired as a lead international kidnapping negotiator. Chris' company specializes in solving business communication problems, using hostage negotiations solutions. Listen how you can practice effective negotiation in your pawnbroker business.

[01:57] What have we learned and what's your method of negotiation? "Vast majority of it is intellectually sound, and the problem is human beings are not intellectually sound"

[02:53] Hostage negotiation is intense human behavior, but not as intense as day to day interactions

[03:31] Chris had to do additional duty while being an FBI agent. He was an FBI investigator and worked in terrorism.

[04:16] He was initially rejected when he applied to be a negotiator, because he was unqualified. Utilizing the Suicide Hotline was great practice in getting him to negotiating.

[04:39] "When I first got there they said 'Look, if you take more than 20 minutes to get to the bottom of this and get this resolved, you're doing it wrong'"

[05:09] "A tactical application of empathy will cut any work from 20-80% of unnecessary communication"

[05:25] Knowing how the brain works gives you an idea of what you are looking for in advance

[08:17] What could a pawnbroker say in turn so that they connect emotionally with a client? "Say you're sorry first and then let out the cost"

[08:21] Apologizing first prepares the customer for what is about to happen next; which they genuinely appreciate

[09:35] The tone of your voice triggers emotional reactions in the person that hears it, and also in yourself

[11:14] "The late night FM Dj voice is miraculous in what it can accomplish for both sides"

[12:13] The assertive voice triggers a chemical change in your brain which causes you to get angry

[13:55] Daniel Kahneman, author of 'Thinking Fast and Slow' and 'The Undoing Project' by Michael Lewis explains the Prospect Theory.

[14:19] Prospect Theory implies that we value a loss twice as much as we value a gain

[16:39] Finding ranges when selling an item is powerful, as customers compare the lower figure to the higher figure and are attracted by the figure at the end of the range

[17:24] Customers walk out your store feeling happy about getting a bargain and shares the deal with their friends. This word of mouth increases your customer base and profits

[19:18] Compromising leaves people unhappy

[21:45] There are many negotiators that will not go easy on you until you drop your prices significantly

[22:16] "We found consistently that there's usually 3 rounds of cuts in nearly every negotiation. People walk into a deal expecting to drop their price and we find that if we do it in an emotionally intelligent way, we can probably get them to knock their price down at least twice before we sell"

[22:46] The anchor is a very common move by negotiators. It is an extreme offer (high price or low price)

[23:33] None of the A+ players want to make an offer first

[28:06] "The more empathic I am the more assertive I am"

[28:11] In the first chapter of the book 'Beyond Winning: Negotiating to Create Value in Deals and Disputes' Robert Mnookin, speaks on The Tension between Empathy and Assertiveness.

[29:38] "All you got to do is change your questions and you'd be astonished at how far you can get by changing and making 'No' work for you"

[35:49] There are sacred values that criminals have in their minds that influence their behavior

[36:51] What's your stress level when called to do a negotiation? "You don't rise to the occasion, you fall to your level of preparation"

[38:10] Preparation may come through experience, so you know what to do the next time something similar happens

[39:15] Three mistakes "great negotiators" make:

• Having a closed mind
• Deteriorating skills
• Having no leverages

[40:57] What is the one thing to put into practice as pawnbrokers? Practice the mirroring technique.

[41:45] Buy the book 'Never Split The Difference: Negotiating As If Your Life Depended On It' on Amazon.com and subscribe to the weekly newsletter by sending a text to FBI empathy to '22828'. There should be no space between the words FBI and empathy.

Tim is the co-owner and managing partner of Pacer Limited. He is the president of the Arkansas Pawnbrokers Association, past GRC chair of the National Pawnbrokers Association (NPA) and the current president of the NPA. Tim has been married to his wife Lisa for 33 years, with 3 sons. Listen in as Tim shares his experience as a pawnbroker and as president of the NPA.

[00:32] Tim founded his pawnshop in 1990 after a 10 year career in retail jewelry

[01:59] He started working in a jewelry store during Junior high school. He then went on to working at a jewelry store during college.

[02:49] An independent had an idea for a jewelry only pawnshop specializing in fine jewelry. They partnered and started the pawn store.

[03:36] There is no retail pawnshop or storefront. Items that are not redeemed are wholesaled.

[06:59] "Whether I was in retail jewelry or whether I was in pawn, it was very awkward for me to tell a customer on one hand 'Your ring is worth $200' and yet on the other hand they come back and that same ring is out in the showcase and it's marked at $799"

[09:06] Anyone who wants a job can get a job, as there are jobs available for everyone.

[10:01] Tim speaks about the difference in pawning since employment is now on the rise. Persons don't need to pawn as much as before.

[10:29] The prices of gold decreasing has caused receivables to drop from anywhere between 20% to 30%.

[12:55] Having a specialized store, it can be difficult to get staff that are trained to know what is real and what is a replica.

[16:13] There is still a stigma attached to pawn stores that Tim is working hard to overcome.

[18:01] First appearance of your store is important to help break the negative stigma of pawnshops.

[18:51] "It's important to make the customers feel comfortable when they come in."

[19:18] "A pawnshop is nothing more than a retail store that sells money"

[21:32] "I have an ongoing struggle, day-by-day, in dealing with pawn customers who are in need and they just don't have the resources to be able to get the amount of money that they need."

[22:55] "Collect the account and save the customer."

[25:00] The National Pawnbrokers Association assists with branding; as you get NPA stickers to display at your store. This shows that you are a part of a group that is committed and compliant.

[29:12] The NPA is currently working to find new revenue streams, benefits and absorb some of the cost burdens associated with shows and conferences.

[31:11] "Pawnbrokers are very caring people and sharing people. And they are willing to open up and share information about how the business is run and what they can do."

[32:28] Visit www.Dixeconvention.com to see information on registration for upcoming events. There will be a 4 state show (Alabama, Arkansas, Louisiana and Mississippi) which is rotated to different locations. This year it will be in Little Rock.

Tony Gallo specializes in security and loss prevention for higher risk businesses. He has more than 30 years' experience in the security, audit, safety and emergency management field. Tony has a Bachelor of Security degree in Criminal Justice from New Jersey City University. He is a licensed security consultant and a published author. In this interview, Tony shares tips on protecting yourself and your assets.

[01:16] Tony has been in the pawn industry for over 20 years. He started working with a company called EZCORP (a pawn shop trade), where he was Director of Risk Management, Security, Audit and Emergency Procedures.

[03:46] Many pawnbrokers think that their security will not be compromised.

[04:17] "My goal is to prevent a robbery from happening."

[05:34] "Sometimes, the cost of being proactive is way less than having to be reactive."

[06:41] There are proven procedures that can reduce your exposure to shoplifters.

[10:21] It is recommended to put peepholes in the back door of your pawn store to have a wide view of the area without having to open the door.

[12:29] "The biggest mistake that pawn brokers make is called misplaced trust. You are putting trust into employees in your store and there's no checks and balances."

[14:06] Lack of good customer service is a loophole for a shoplifter. This breakdown is a catalyst for robbers to approach your business.

[15:23] Not sending the proper message can encourage shoplifting.

[18:00] "How do you communicate to your employees? What is expected of your employees?"

[18:36] Put written procedures in place that protect both you and your employees.

[19:15] Pawnbrokers are exposed to all the assets and are not sensitized about how to properly guard their property. Day-to-day operations can cause you to forget that people are watching your every move.

[22:02] You must be diligent with your security when running your business, as the level of violence has drastically increased.

[22:46] Reduce the level of violence by preventing it from occurring, instead of waiting to address it as it occurs.

[24:48] "At the end of the day, my goal is for you to go home and have dinner with your family."

[25:29] You have to think of the advantage of letting a 'transaction go' in order to protect your life.

[27:07] There are online training courses available that teach employees how to act during a robbery situation.

[29:15] "We want you to stay in business, we want you to grow. We want you to be profitable and we want you to go home."

[29:25] Check out www.sapphirerisk.com for more information and feel free to call 214-845-6838. There is also a contact on the webpage as well. Send questions and you will get a response.

Mike Willingham, VP, and COO of iPawn Arkansas and president at Willingham Diamonds speak on using leadership to influence persons to be their best self and work towards their dreams.

[00:24] Mike is an entrepreneur, passionate about leadership, investing and pawnbroking

[00:46] VP and COO of iPawn Arkansas, president at Willingham Diamonds and serves as a board member of National Pawnbrokers Association

[01:07] His true passion is influencing younger men to realize their leadership abilities

[01:54] Mike started pawnbroking with a friend of his, where they used items from their garage

[02:34] Mike currently has 2 stores

[02:46] Before August 2017, Arkansas had no regulations regarding pawnbroking. The law now states interest of 25% per month with a holding period of 30 days

[03:21] Mike pawns jewelry, general merchandise, boats, cars, RVs and much more

[03:29] He opened his first store 8 years ago

[03:47] Finding passionate and ambitious employees is one of the hardest situations Mike has experienced

[04:44] He pays above-average wages, gives employees health care, free gym membership, and other benefits, just like a large corporation would

[05:25] Employees are kept active and also marketing themselves and the company (while they wear iPawn shirts)

[06:49] Why is personal branding important? "Your employees are going to make more money, which means you are going to make more money."

[08:17] When you become a better leader, it challenges your team to want to become better leaders

[09:44] "If you don't let salespeople set their own goals, they're gonna set them much higher than you would usually"

[09:22] "Leadership in its purest definition is influence"

[10:53] Becoming a better leader improves your bottom-line

[11:36] People set goals, but don't have a plan for achieving them

[13:23] You must commit, by investing time and money, to anything you want to become great at doing

[13:44] Mike read and became involved in mentorship at radicalmentoring.com to become a better leader.

[15:43] "If you don't have enthusiasm about what you're doing then you're wasting your time."

[16:58] Mike started Willingham Diamonds from something that he loves to do

[17:38] He separates the pawnshop and Willingham Diamonds so that each entity makes its own profits

[18:39] Mike used events that would lead persons to his social media pages

[19:27] You must use social media as a platform to educate, not just sell

[20:18] Even if you utilize different styles, leadership can be portrayed at home and at work

[23:05] Your staff can determine whether or not you get business based on their customer service

[25:53] Lack of vision and know-how can prevent a pawnbroker from building their staff to make themselves better leaders and improve the viability of the pawnbroker

[27:03] iPawn core values:

• Create remarkable experiences
• Embrace and drive change
• Excellence in every role
• Little things are important
• Honest is best

[28:40] In the pawnbroker business, we've become so transaction-oriented that we don't pay attention to our customers. Forming a relationship with the customer can upgrade them to a client

[30:20] "Employees are the backbone of your business"

[30:42] Training employees gets them to where they need to be in the business

[31:02] The TTS report focuses on emotional stability, making decisions, leadership potential and best-fit job roles for employees

[32:12] 'Be Obsessed or Be Average' - Grant Cordone https://www.amazon.com/Be-Obsessed-Average-Grant-Cardone/dp/1101981059 talks about sales and leading people

[32:33] 'Smart Business Management"...

[33:08] "Invest in your staff and invest in yourself. Pay your staff more money, give an opportunity to earn more money"

[33:32] Contact Mike at:

• iPawn Arkansas on Facebook and Instagram
• Willingham Diamonds on Facebook and Instagram
• Mike Willingham on Facebook
• MikeWillingham.com

Josh Davis, the owner of GC Pawn, utilizes technology to drive his pawn store. As a third-generation pawnbroker, he has gained extensive knowledge from his family and currently has 7 stores. He shares his own experiences and advises us on running a successful business.

[00:38] Josh was born and raised in New York, 3rd generation pawnbroker, started working early at the front desk and learned behind the scenes business from his father

[00:53] Josh has a degree in Computer Engineering and Mathematics and is a Cellist

[01:02] In 2008, Josh and his brother Adam opened their 1st pawnshop in South Florida at 22 years old. The operations was expanded to 7 locations

[01:11] Josh recently, independently, developed in-house pawnshop software for his company to use

[01:23] He currently serves as president of the Florida Pawnbroker Association, board member of the NPA's young professionals and board member of his local city's civil service board

[02:45] Florida is governed by Florida statute 539. Florida law allows up to 25% per month per pawn loan, pawn loan good for 60 days with payments due every 30 days (all purchases are to be held for 30 days rather than 60 days). Any number of extensions can be made and items can be redeemed whenever

[03:48] Most of Josh's family was involved in the pawnbroker business. He became involved as well

[04:31] Once Josh became interested in technology, he started working in the back-office with his father dealing with network systems

[05:27] Josh was destined to be in the pawn industry. He however was interested in the technological aspect, and therefore integrated this in his pawnbroker business

[07:06] GC Pawn was opened in July 2008

[07:59] The business included Josh, his brother and his father

[08:29] Josh expanded the business which was a step from store 1 to store 2 (this was a year and a half after the 1st store)

[09:09] Store 3 was difficult because recruitment of staff had to be done

[10:00] The store was opened for 6 days (Monday - Saturday). However, he would have opened on Sundays as well if he had to make the decision again. This started when the fourth store was opened

[10:50] What's been the hardest thing running a pawnshop? "Work, Life, Balance. Very tough"

[11:05] Josh looks at prioritizing, by canceling other engagements in order to run the shop

[11:57] The family's success/business model taught Josh to make smart business and investment decisions, thus expanding; where he tried for at least 1 new store a year

[14:34] Josh believed in properly branding the business

[14:52] "You go to any state and any city and you see the same stores, the same logo and you know them. You know whether you want to go there or you don't want to go there"

[15:12] He was able to use the digital space for advertising

[15:45] He changed the business name from 'Golden Connection' to 'GC Pawn' and the business name is used as the url address so customers can easily locate business info when searching online

[19:00] What's been the secret to GC Pawn finding great talent? The company has utilized various methods to find talented staff (headhunter.com, trade shows, Craigslist, monster.com)

[20:16] It's not all about the money. People want to work in an environment where they are respected and are appreciative of the people around them

[21:52] "We've tried to always convince people to stop smoking"

[26:24] What's been the best part of this whole journey for you? "I don't really have to buy new stuff"

[30:51] The main objective of the Florida Pawn Association is to monitor and lobby for legal legislations that might negatively affect the pawn industry

[33:48] To join the Florida Pawnbroker Association, or get any information regarding the association, visit floridapawnbrokers.net

[34:56] What are the 2 biggest mistakes pawnbrokers are making in 2018? "Not being digital on social media… we really need to change the way that we do business"

[35:50] "Someone walks through the front door, the first thing is 'good morning', 'how are you?'"

[36:22] Pawnbrokers need to realize that the competition is plentiful and customers will go elsewhere if they don't feel comfortable in your store