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VCS Market Strategy
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Our overall marketing and development strategy is to become closely identified with the industries we have targeted to serve, to aggressively market products which meet the current needs of those industries and anticipate future needs by closely monitoring industry trends.
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VCS has played an important role in the pawn industry's recent growth by recognizing the need for automation and developing systems which automate and control key management and accounting functions. The advent of computers gave pawn operators, for the first time, the automated support systems necessary to manage and direct the operations of multi-store operations.
Though VCS is a dominant management system in the industry, CompuPawn's installed base of over 1,000 stores represents some 25% of the high end market to which the product is targeted but only about 4% of the total market potential. We realize that to create future growth, the company must revise its operations to include more cost effective marketing, sales and distribution business models. Current sales levels and past growth have been achieved through traditional sales models of trade journal advertising, trade show attendance, direct mail and word-of-mouth. We also recognize that there is a much larger opportunity for increased national sales and new international sales through the deployment sales via Internet and through web site advertising and distribution. Furthermore, sales cycles can be shortened significantly with this new marketing program.
Aiding this goal is a trend to stronger regulation of the pawn industry by many states, which are imposing greater operating restrictions and stronger reporting requirements on all operators, regardless of size. Automated management, accounting and reporting systems are already required by larger operations. They are increasingly becoming a necessity for small, single-store and mid-size operations. VCS will provide these systems.
We have also developed extensive conversion programs that easily convert data from a competitive software package over to the CompuPawn system. This enables VCS to market “upgrades” to users of competitive systems who are reluctant to switch because they are reluctant to re-enter all customer loan and inventory data. We are the only company that offer this service.
Current and anticipated methods used by the company market their products include, but are not limited to:
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Direct Sales
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We currently employ two individuals in direct sales. We need to build a much stronger sales team, capable of fully exploiting sales opportunities -- initially with CompuPawn, and eventually with other products. Though CompuPawn is one of the leading software products in the pawn industry, it is installed in only 4% of America's pawnshops. Market penetration can be quickly and dramatically enhanced by deploying new business models for closing sales on a first time call. Supported by web site advertising, simplified sales literature and demonstrations via the Internet, a salesperson can easily demonstrate our products and capabilities to potential customers both domestically and internationally.
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Advertising
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We currently promote our products and services through advertising in appropriate trade journals and newsletters with circulation in the company's target markets, and through direct mail of informational literature to pawnshops. The objective of our advertising program is to stimulate inquiries both traditionally via telephone and electronically via email and the Internet, which can be followed-up by a direct sales staff.
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Conventions and trade shows
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We are active in a number of professional associations in support of their target industries and participate in trade shows directed to pawnbrokers. Historically it has been beneficial, to both sales and our reputation as an industry leader, to appear at these conventions as an exhibitor, sponsor the trade association through advertising and membership, and occasionally Mr. Howell speaks on behalf of the industry. We anticipate that these practices will continue to enhance the company's sales.
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Newsletters
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Up until 1997 the company published the CompuPawn Chronicles, a quarterly newsletter reporting on the pawn industry and VCS products that was mailed to pawnshops throughout the United States. One of our objectives is to reinstate the publication of this newsletter through our website and via automated email as well as launch similar newsletters for other niche industries served by our anticipated new software products.
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Endorsements and testimonials
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Many large pawn operations have publicly credited number with increasing efficiency and profitability, sometimes by as much as 45% during the first year. The company is quick to cite these endorsements and testimonials in its advertising.
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Demonstrated commitment to advancing the industry |
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VCS, through market studies and research associated with product development, has earned a reputation within the industry as a positive force for improving the pawn industry overall, and assisting individual pawnbrokers to achieve increased profitability. Mr. Howell is widely published in industry trade journals and association newsletters. We hold memberships and are active in leading pawnbroker organizations including the National Pawnbrokers Association, the International Pawnbrokers Association and state associations in Florida, Georgia, Ohio and Texas. We plan on very active participation in associations directed at our target markets as well as those markets that we develop new products for.
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