Loan provider looks to UGC
Advance America’s messaging focuses on dependability in troubled times
Advance America, a payday advance company, has launched a new campaign, “Who is there for you?” encouraging people to share stories about those who have made a difference in their lives.
The push incorporates direct mail, Internet marketing and social networks, a contest and several sweepstakes in an effort to keep the company — which provides short-term cash loans with varying interest rates based on a borrower's home state — top of mind for consumers who might need cash relief.
“We're trying to get the word out that Advance America is not only there in times of financial need, but that everybody has somebody that they count on for other reasons,” said Trudy Boyles, CMO of Advance America. Advance America's product is not one that people need every day, so marketing can be challenging because it's not always easy to know when an individual might need its service, she added.
The promotion launched on July 14 and will run through October 21. So far, more than 250 people have posted testimonials on the campaign microsite, www.whoisthereforyou.com.
“We thought it would be interesting that people who tend to count on us may have other people that they count on,” said Ty Thornhill, VP, management supervisor at Erwin-Penland, the Hill/Holliday agency based in Greenville, SC that worked on the campaign. “It takes a category that's a little bit downtrodden and makes it solution-oriented.” Advance America hopes that people will draw a parallel between the campaign messaging and what the brand does for its customers, he added.
The US economic climate is discouraging for those facing debt. Outstanding consumer credit reached its highest rate ever — $2,570.6 billion at the end of May according to the Federal Reserve — and unemployment continues to rise, with the US Department of Labor putting the number of jobless at 8.8 million in July.
Advance America has also suffered during this downturn. The company recently released its second quarter results on July 23. According to the company, second quarter revenues dropped 6.8% to $162.1 million compared to $173.9 million for the same period in 2007. The company's second quarter ended on June 30.
Jaime Fulmer, director of public affairs, Advance America, explained the campaign's launch was not directly tied to the poor Q2 results. “The second quarter presented a difficult operating environment for us, in part due to regulatory challenges and in part due to a tough economic environment,” he said.
Advance America's president and CEO Ken Compton said in a statement that the company's overall performance was impacted by the government's economic stimulus payment, which averaged $867 per household.
In addition, the company was also impacted by regulatory events in certain states. For example, the company believes that new bills in New Hampshire and Ohio “will effectively eliminate the regulated payday cash advance option for citizens in those states.”
A bill designed to protect consumers from “unreasonable credit rates” was also introduced in the Senate by Senator Dick Durbin (D-IL) on July 17. The proposed law would require that no creditor extend credit with an annual credit rate that exceeds 36%.
The law is designed to eliminate the “excessive rates” that some consumers are charged for payday loans — the type Advance America provides — as well as other types of credit, according to a release from the senator's office. For example, in Mississippi, the 14-day APR for a $200 advance is 570.31%. In California, the 30-day APRfor a $200 advance is 212.92%.
“Advance America is a leading company but in a category that is under considerable scrutiny. So, to have somebody advocating the positive aspects of not just the products and the service, but the company that provides, it is by far the best marketing they could buy,” said Barry Finkelstein, VP and director of integrated marketing, Erwin-Penland. “There's nothing more powerful than word of mouth.”
On August 1, a woman named Kathy from Ohio posted a testimonial, “Christmas Miracle,” on the campaign microsite, about a neighbor who stocked Kathy's house with food and other household needs when she could not afford to do so herself. “Ifell to my knees and cried,” Kathy wrote about the moment she discovered the gesture — about three days before Christmas.
There are also social networking campaigns running on MySpace and Facebook, including weekly sweepstakes, said Julie Quaranta, an account supervisor at Erwin-Penland. Facebook users can become a fan of Advance America, or MySpace users can add the company as a friend. Sweepstakes winners receive a $100 Visa gift card, Quaranta said.
Overall, the agency will measure the effectiveness of the campaign by the number of entries into the sweepstakes and the contest, as well as the number of fans and friends they get on the social networking sites, Quaranta said.
At the end of the campaign, Advance America will match entries back to their customer file to see how many people were customers before the campaign started vs after, she continued. The direct mail portion of the campaign targets both prospects and lapsed users.
“Who is there for you?” is an extension of a brand campaign the company started in 2006, Thornhill said. There's a lot of misinformation about who Advance America's customers are, he said.
“Our consumers are every-day Americans who really work hard every day,” Thornhill said. “We wanted to elevate our voice to say, ‘We understand what you're going through.'”