The Study of Customer Lifetime Value in Taiwan Pawn Industry

• Main Authors: Sheng-Hsuan Chou, 周聖炫
• Other Authors: Kuang-Wen Wu
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/82239713967958239362

碩士 === 逢甲大學 === 經營管理碩士在職專班 === 97 === Pawn industry has been providing an alternative financial service outside of conventional financial institution since ancient time. Since its low-key and opaque management mode, the pawn industry has up until now oblivious without offering little literature (if any) in the academic field. The purpose of the present study is to explore the marketing aspect of Taiwan’s pawn industry. Since modern marketing theory has shifted its focus from conventional way of attracting new customers to retaining regular customers, the core interest of modern marketers are now redirecting their effort to identify regular customers with high value, and try to establish long-term profitable relationship. Popular marketing of the pawnshops centers on the marketing strategy and market sensitivity of the pawnshop owners without too much concern over the academic theories. In light of this, the study intends to provide referential basis for the pawnshop managers in mapping out marketing strategies through actual calculation of customer lifetime value and scientific analysis. Data were gathered from the databank system of a certain pawnshop chain. Targeting a specific pawnshop of the chain, a total of 12,994 pieces of data were then collected over a time span of 12 years (April 2, 1998~March 18). Among them, 12,314 transactions are either unredeemed or redeemed pledges from 3,224 customers. Analysis results of the study found that the customer retaining rate is 60.42%. The three articles most acceptable to the pawnshop are gold (77%), jewelry (15%), and watches (8%), with gold rank the first in customer lifetime value (65.4%), followed by watches (21.1%), and jewelry (13.6%). When calculating customer lifetime value per single transaction, watches top far higher than gold and jewelry, averaging about NT$ 4,272/per transaction, with slight difference between gold (NT$1,457) and jewelry (NT$1,545). Accordingly, in terms of single transaction, watches are the main source of the highest transaction value of the pawn industry. In conclusion, this study found that the pawner’s contribution to the industry meets the 80/20 rule, 80% of the customer lifetime value comes from 16.9% of the pawners, and 29.3% of the customers have brought no profits for the industry. Calculating outcomes by the exclusive customer lifetime value computing mode proposed by this study shows that total customer value is NT$ 53,759,879, of which, gold occupies NT$ 32,760,103 (60.9%), followed by watches, NT$ 13,709,568 (25.5%) and jewelry, NT$ 7,290,209 (13.6%). In terms of customer earnings, unredeemed pledge occupies the highest 58.8%, followed by interest earnings of 28.0% from redeemed pledge. Findings of the study has proven that the proposed exclusive customer lifetime value computing mode is an effective marketing strategy, which with its emphasis on the customers of greater contribution, can increase the total earnings of the pawn industry and thus bring in greater profits.