Category Archives: Prepaid

Business, Prepaid

The Future of Consumer Rebates

Over the last 5 years consumer focused companies have moved their rebate programs from paper checks to plastic prepaid cards.  This demonstrates an ongoing trend to reduce paper in the payments system, while providing consumers with the added convenience of a MasterCard® or Visa® card.  The Mercator Advisory Group, a leading industry consulting group, predicts the growth of prepaid cards in the consumer incentive market to grow at a  200%+ clip by the end of 2010. 

Consumer rebates create an opportunity for a organization to drive brand loyalty by ingratiating themselves with their end user.  A prepaid MasterCard® or Visa® loyalty card offers an Original Equipment Manufacturer (OEM), a unique financial vehicle for promoting their product or service. 

  • Consumers:
    • Get the item they want at a lower price
    • Have immediate access to their funds and universal acceptance –– with no trip to a bank necessary

 

  • Original Equipment Manufacturers:
    • Receive a substantive revenue lift in the product/service being promoted
    • Establish an active, personal connection with the consumer through a customized card activation/registration process
    • Capture end user spending behavior by effectively levering a processor analytics engine
    • Enjoy brand enhancement as the custom designed card is used by the consumer to make subsequent purchases
    • Utilize custom card carriers/greeting cards to construct detailed messaging to be directed at their customer
    • Improve the economics of their rebate program

Some consumer groups claim that the reason for the shift from check to card is the hope (by the OEM) that the end user will forget about using their reward.  The reality is that the “breakage” income is only a small component in the overall revenue derived from the card.  Most OEM’s want their customer to spend the awarded monies on other goods/services they offer. 

My advice to cardholders:

  • Use the card immediately
  • Identify fees and the timing of those fees
  • Monitor your card balance (via the web or IVR) so you can easily navigate a split tender transaction (divide the bill)
  • If your card is lost/stolen, immediately report it so you can receive another card

My advice to OEMs:

  • Prior to making a decision, review the capabilities of both rebate fulfillment companies as well as prepaid card companies (many times money can be conserved by negotiating separate contracts)
  • Look for economic flexibility with your potential partner (what revenue streams can be shared)
  • Understand the personalization capabilities of your potential partner –  can they help establish a one to one relationship with the end user
  • Understand how program change requests will impact the delivery timeframe
  • Ensure that complex reports (spend data) can be accessed in a timely fashion

Prepaid cards are a flexible, cost-effective way to distribute cash rewards to participants.  If utilized correctly, both the OEM and consumer will enjoy the many benefits associated with the card.   

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Business, Prepaid

The Business Benefit of Corporate Wellness Initiatives

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Almost every American is aware of the significant health care crisis in our country. The problem is overwhelming; a third of all adults are considered obese, 33% more are considered overweight, 5% at the dangerously overweight level, diabetes rates are at an all time high and are increasing.  The majority of Americans lead a sedentary existence, while a significant number of people still smoke despite the obvious consequences.  The health care crisis has resulted in medical insurance premiums growing year over year at a double digit rate.  Companies are now forced to cut back on in-force benefit plans as well as pass increases onto their employees. 

Today, many companies are working with their brokers and insurance carriers on solutions that will help mitigate the annual health insurance increases.  One strategy that is succeeding is the institution of a corporate wellness initiative.  This process starts with the creation of an employee personal wellness profile after completing a detailed health risk assessment.   An individual can then choose self selected education for their own health risks and diet, as well as monitored diet and fitness programs.  There is also the ability to screen for high-risk individuals, and proactively approach them for direct lifestyle modification programs via wellness interventions.

In order to effectively impact positive change, employee involvement in a wellness program must be managed through the use of a corporate incentive plan.  The program must:

  • Offer a reward that motivates an employee to participate.    
  • Be simple to implement and administer.
  • Ensure that every participant who achieves a goal receives recognition. 
  • Promotes your worksite wellness program through branding and active communication (via text, email, IVR & web).

A reloadable MasterCard® or Visa® prepaid card is the easiest, most convenient method of rewarding employees for participating in a corporate wellness initiative.  It’s the perfect way to motivate employees to stay engaged with the a wellness program.

  • The program starts with the construction and customization of a company branded, reloadable prepaid card. 
  • Card designs, messaging, card carriers, inserts, letters, envelopes, and website pages are personalized to deliver tailored and precise communication to all participants.
  • Cards are delivered and include a definitive statement on how employees can earn monies on their card.
  • Additional dollars are dropped on the card as long as the employee meets certain program objectives.
  • Good habits are reinforced via immediate messaging on the card (text, email).

Company leaders must look to their insurance brokers, insurance carriers as well as wellness providers to affect positive change within their employee population.  Empirical evidence now suggests that companies that implement, and adhere to wellness best practices will see a dramatic drop is overall claims.  Companies like National Jewish Health and Staywell offer the statistical evidence that reveals that active participation in a wellness program leads to significantly reduced operating costs (medical claim & short-term disability) as well as an increase in presenteeism.  

On June 24th at 2 pm (EST), there will be a web seminar conducted by National Jewish Health and MasterCard.  The distinguished panel will share insights on the effective use of incentives to encourage broad participation in corporate wellness programs, resulting in significant financial savings.  Anyone interested in participating can contact me, and I will email them the online enrollment information. 

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Business, Prepaid

Capture Consumers, Sustain Loyalty….Drive Incremental Revenue

In a highly competitive retail environment, where the consumer is becoming more and more discerning, it is critical to maintain brand loyalty.  Brand allegiance can be secured, which ultimately guarantees the original equipment manufacturer (OEM) incremental revenue streams.  A customized private label prepaid card is an elegant, and effective tool that rewards buyer commitment, thereby ensuring complete share of wallet.

The Solution

  • As a reward for their purchase, and subsequent product registration, a consumer is sent a fully customized, private label prepaid card.
  • The OEM branded, private label card contains inherent characteristics that will:
    • Restrict end user utilization so loaded monies can only be spent in predetermined brick & mortar or online stores.

Program Results

  • All dollars associated with the loyalty program are funneled back to the OEM in subsequent purchases.
  • Consumer utilizes private label card to justify the purchase of an item costing significantly more than the value of their prepaid card.
  • The OEM immediately ties the reward with the initial purchase thereby ingratiating themselves with the consumer.
  • Consumer feels empowered to immediately spend earned monies on another OEM product.
  • Consumer recognizes who awarded them the card every time they make a purchase thereby strengthening the relationship with the OEM.
  • A private label card levers the Visa/MasterCard infrastructure, so an investment in propriety networks is unnecessary. 
  • The OEM captures consumer profile data during the registration process.

Original Equipment Manufacturers will continue to look for unique ways to differentiate themselves from worthy competitors.  A private label prepaid card can be an effective way to ensure the appropriate consumer devotion to their product lines. 

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Business, Prepaid

Customer Relationship Management: A Necessity for Highly Effective Selling

At 41 (soon to be 42) I have now been a professional sales person or sales leader for over ½ of my life.  I have sold folding cartons, computer systems, implementation consulting services, enterprise software, group insurance and prepaid cards.  My philosophy in approaching any marketplace is simple and straightforward:

  • Attract:

–      Create and track intricate, personalized marketing campaigns that speak to the value your company’s solutions create.

–      Prospect with accuracy and confidence. 

  • Acquire:

–      Sell in a collaborative environment that allows all company constituents (executives, manufacturing, engineering, etc.) to actively participate in the selling process.

  • Extend & Protect:

–      Indentify cross-sell opportunities.

–      Deliver unparalleled client service to ensure long term, mutually beneficial business partnerships….and repeat business. 

–      Create institutional memory that guarantees the historical accuracy of client and prospect interactions.

Selling complex business solutions to multiple constituents inside a prospect/customer organization is time consuming, resource intensive and ultimately fraught with risk.  The danger associated with most engagements centers around opportunity cost; if I (the salesperson) spend the extraordinary effort to engage with a company, am I potentially losing out on another opportunity of similar or higher value? 

Customer Relationship Management software (Salesforce.com, Pivotal, MSCRM, Oracle, SAP, etc.) allows an organization (specifically the front office) to efficiently manage the flow and constant interactions associated with an intricate sales cycle.

  • Marketing

–      Integrated marketing and sales application with automated lead conversion

–      Real-time analytics to measure and optimize campaigns for best results

–      Multichannel campaign management (email, direct mail, trade shows etc.) and analysis for a complete marketing solution.

–      Client profiling and lifecycle management.

  • Sales

–      Account Management

–      Contact Management

–      Opportunity Management

–      Activity Management 

–      HTML email management (creation, reporting)

–      Territory Tracking/Permissions

–      Imbedded Action Plans for Best Practices

–      Individual Forecasting

–      Proposal Generation (integrated MS Office)

–      Order Management

–      Commission tracking

–      Collaboration: Team productivity/automating workflow

–      Report on sales activities and effectiveness

–      Integrated Outlook

  • Client Service

–      Issue tracking and resolution tools needed to quickly resolve customer questions, issues, and requests and deliver a high-quality customer experience

  • Management

–      Scalable solutions rapidly integrate with existing applications and hardware investments

–      Immediate report on sales activities and effectiveness

–      Immediate overview of pipeline (group and individual)

–      Immediate forecast of company revenue

–      Creation of corporate best practices to be institutionalized

–      Create a collaborative environment for managing opportunities and service requests

–      Enable employees, partners, and customers to engage in discussions, share files, and manage tasks

A Customer Relationship Management package will NOT, on its own, create demand for or sell a company’s product/solution.  However, A CRM tool will allow a corporation’s talented front office team to maximize their time spent selling the right prospect

As a sales person who sold CRM, implemented CRM and uses CRM on a daily basis, my advice to buyers would be to decide early on if your company really wants to support the application, or should a Software as a Service model be considered?  Managing a CRM system is extraordinarily resource intensive; if you take the application in house, dedicate the appropriate talent.  While researching, do NOT rely on the opinions of industry analysts – they are a shill for any ISV that offers them cash.  Instead, evaluate a subsection of Best of Breed providers, and INVESTIGATE their deployments (both good and bad).  Get a realistic representation of what can be accomplished in a defined time period…..current clients will talk.

If you can justify the investment, have a sales operations person assigned to owning/managing the deployment.   This individual should not only understand the marketplace, but they need to clearly comprehend your company’s specific business.  Once committed, create defined business objectives with an educated resource; this person needs to truly understand CRM, and how your marketing/sales/service processes work. 

Prior to beginning the implementation, set realistic goals and defined milestones with your partners.  Pay the hired partner a retainer up front, and then only compensate them when they achieve agreed-to performance goals.  If the hired company says they can do something pre-sale, hold them accountable post-sale. 

Finally, be selective and demanding when assessing the different vendors in the CRM marketplace.   Once you choose a company, truly partner with the ISV/ implementation provider in order to gain the most return from your CRM investment.

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Prepaid

Breakage: Not an Industry Secret Anymore

The term “breakage” within the payments industry refers to the dollars left on a prepaid card post card expiration.  Those dollars are either funneled to the Program Manager (who constructed the initiative), or back to the company offering the card to their particular constituency.  Generally speaking, people outside the prepaid industry (consumer groups) have an erroneous opinion on how breakage works.  Here are some thoughts….

  • First, a network branded card (Visa, MasterCard) offers the cardholder choice.  The cardholder can spend the full value of the card wherever they want.  The only constraint is that they have to spend the entire load before the card expires.  Evidence suggests that the majority of cardholders are happy to trade the card’s ubiquity for the limited time restriction. 
  • Industry statistics demonstrate that less than 8% of the funds on a network branded prepaid card actually break.  As consumers become more prepaid savvy, I expect that percentage to decrease over time.
  • Generally speaking, only a single value prepaid card will actually break.  Reloadable cards (usually utilized in employee or partner programs) do not factor breakage as a source of revenue.  Once a reloadable card expires, the cardholder is usually reissued a new card, and their available balance is moved to that card. 
  • It is costly to support a card on a processor.  The technology and cardholder services infrastructure are significant investments for companies in the space.  Card breakage helps underwrite those costs.
  • If a cardholder has funds on a card post expiration, and they want to access their monies, they are reissued a new card less a nominal processing fee.
  • Without breakage revenue, consumers may not see the plethora of acquisition/retention campaigns available to them.
  • Companies initiating prepaid campaigns are now infusing cross-selling/up-selling strategies that overtly suggest what products the cardholder should spend their monies on. This tactic looks for the incremental consumer spend as a way to judge a program’s ROI.

Anyone looking to learn about the prepaid card space should visit the NBPCA website. You will find a plethora of relevant and objective industry information available.  

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