Retailers – Want To Add A New Revenue Stream?

Are you looking for new revenue streams?  Are you currently selling prepaid cards?  You should be.

According to the 2010 Federal Reserve Payments Study recently updated on April 5, 2011, the fastest growing sector is Prepaid Cards with an annual growth rate in transactions of 21.5% from 2006 to 2009. The sheer number of transactions alone is staggering:  6 Billion!!! That’s the exact number of ATM transactions that occurred over the same time frame.  Transactions on Prepaid Cards equaled cash transactions at ATM’s.  This is an amazing trend that you as a retailer can capitalize on. Your customers are already purchasing Prepaid Cards and using them so why not have them purchase from you and create a whole new revenue stream?  The upward trend of the acceptance and usage of these cards means a golden opportunity for companies with vision.  Let’s say you administer the gift card program for a major U.S. retailer and you want to add a new revenue stream and increase foot traffic to your stores.  Why not sell branded network prepaid cards in two different flavors:  A fixed value and a general purpose reloadable. Here’s a sample scenario:   Retail chain with 500 locations

• Sell a $50.00, single-value, branded network prepaid card with an industry standard retail mark-up of $4.95.
• Average 2 cards sold per location per day = 1000 cards sold per day
• 1000 cards per day x 360 days = 360,000 cards sold per year.
• 360,000 cards x $4.95 per card = $1.78M
• 360,000 cards x $50.00 customer load per card = $18,000,000 in loads
• Industry statistics show that up to 70% of branded network prepaid cards will be spent at the brand on the card.  Let’s take a very conservative estimate of 25% of loads coming back to you the retailer
• $18,000,000 in loads x .25 = $4,500,000 back to your organization.
• You could also factor in the sales lift associated with a typical prepaid card transaction and add even more revenue to the equation.

Sell a General  Purpose Reloadable card and also add revenue from the reload fees and lift from cardholders coming into your retail stores to reload the cards. If you want to capitalize on this upward trend and have another vehicle to have your brand in the marketplace, give me a call and I’ll be happy to walk you through in more detail.

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Is Your Sales SPIFF Program Stale?

How’s your SPIFF’s?  Performing or stale?  SPIFF’s are the mainstream program used by manufacturers and companies to incent a salesperson to sell a specific product…hence the name.  Sales Performance Incentive Fund – SPIFF (not sure why there is a second F).

Companies that wish to push a certain product through their sales network, retail and distributor channels will offer a set dollar amount for each unit sold in an effort to incent the salesperson to drive that specific product.  Currently, companies will cut a check or add money to the payroll of the salesperson.  This can be effective, but many times, especially for distributor sales people that participate in multiple manufacturer SPIFF programs, the value gets lost and sometimes they are not even sure what they did to receive the extra money.

Why not make your SPIFF program stand out?  After all, the only reason you’re running one is to move your specific products, so the more you pay out, the more product you move.  Pretty simple.  The key to making this successful is to make your SPIFF program stand out and to communicate the program so it is first and foremost on the sales staff’s minds.  A great way to do this is to use a Custom Branded - Reloadable - Prepaid Debit Card.  Co-brand a Visa or MasterCard with your logo and give one to all sales people in your program.  As they qualify for the SPIFF, simply electronically load the dollar amount onto their card.  Set up program messaging so that an email or text is sent immediately upon a new load that reinforces your program.  “Hey Bob, excellent job this month selling the Widget 3000.  $500 has just been loaded onto your Widget, Inc prepaid card.  Keep up the good work.”  Now that would turn a stale incentive program into a vibrant winner.

Benefits to using a Prepaid Debit Card for your SPIFF program?

1. Brand Awareness… put your brand, not your competitors, in the pockets and minds of your sales channels.
2. Save Money…no need to write, distribute and mail checks.
3. Save Time…no need to hassle with payroll or sales people calling in asking if they received their SPIFF.
4. Immediate Recognition…electronically load the cards for immediate delivery of funds.  Salespeople absolutely love this.

Please let me know if you have any questions or would like more information about using Prepaid Debit cards in your SPIFF programs.

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Guest Blogger: Nathan Lemon – The High Cost of Checks

What makes issuing a check so costly for these schools?  Some points to consider:

• Administrative time required by those involved in getting the checks issued
• Postage required for issuing multiple checks throughout the school year
• Support resource required to hand out the checks (if they don’t mail them out)
• Returned checks – Students moved and they don’t update their address information with the school
• Risk of non-compliance – Resource time, availability of good information and mailing time can impact a school’s ability to meet state and federal disbursement requirements

What else is missing from this list?

Obviously, any electronic method (Debit cards, direct deposit, etc) will speed up the process and will almost always be cheaper for a school.  Given that the majority of students don’t have a direct deposit option (i.e. checking accounts), a debit card solution makes perfect sense.

A prepaid debit card program can reduce or eliminate the costs as compared to cutting checks.  Here’s how:

• Electronic disbursements allow institutions to streamline their processes and maximize the time of their resources
• Cards are issued prior to a disbursement and they are reloaded electronically, paying for postage only once is an immediate savings
• Once the card is in the students hand, returned mail becomes virtually non-existent
• No more waiting to get the checks to the students, making compliance that much easier to achieve

Nathan Lemon is Director of Higher Education for Springbok Services and will be a frequent guest blogger.  Please visit Nathan’s blog at http://www.highereducationdisbursements.com

Guest Blogger – Ross Freedman – Analytics: Prepaid’s Special Sauce

Originally uploaded by Walter_Ezell

For a company looking to create cost-efficient, targeted marketing campaigns, the statistics derived from the use of a prepaid card is invaluable. In a consumer promotion, the company offering the reward can easily create the profile of their buyer through the card activation process. In order to make the card spendable, the cardholder reveals critical demographic data. Once they begin to utilize the card, the spend data accumulated, clearly outlines where and when the money was spent. The power occurs when combining the demographic data with the spend information. The solution created is a decision support system that can be immediately levered against future marketing efforts. The output suggests:

•What customers are ready for cross-selling/up-selling offers.
•What customers are vulnerable to a competitor and could attrite.
•How to improve responses to promotions thereby improving ROI.
•When is the best time to message the customer.
Companies like Clear Peak in Englewood, Colorado, lever the data and create predictive modeling tools that provide immediate insight into a business and its customers. A sustainable competitive advantage is created when a business captures the knowledge, then utilizes it to convert prospects to customers while protecting their client base from intrusion.

Prepaid, combined with deep and relevant analytics, delivers this edge.

Ross Freedman is SVP of Client Solutions for Springbok Services and will be a frequent Guest Blogger.  You may contact Ross direct at ross.freedman@springbokservices.com or on his blog www.expertprepaid.com

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Refund Solutions for Higher Education – Why Use Prepaid?

Colleges and universities can now conveniently disburse funds such as financial aid, work study payments, payroll and scholarships by the use of a prepaid debit card.   

Converting from paper checks to electronic funds transfer not only streamlines the refund process, but makes it more economical for the students and the institution.  Students, parents and school administrators all benefit from faster, less costly and more secure distribution of funds.

Top 5 Benefits to the Institution:

1. Significant cost reduction – Free to Institution
2. Reduce administrative time – No phone calls and inquires about lost or stolen checks
3. Easy to implement – No internal technical resources required
4. Simplified payment process – Electronically send funds immediately
5. Enhance “Green” Initiatives – No more paper checks

Top 5 Benefits to the Student:

1. More Security – Safer than carrying large amounts of cash
2. Immediate access to funds – No need to wait for check to be mailed
3. Easy to Use – Can be used anywhere Visa or MasterCard is accepted
4. Less expensive – No need to pay check cashing fees or to have a checking account
5. Increase Financial Maturity – No more NSF’s or overdraft charges as with checking accounts

Students will appreciate the speed and convenience and schools will reap the rewards of an efficient funds disbursement process.  Please let me know if you would like more information on how to use Prepaid Debit cards to help with student refund disbursements.

Dave.cook@springbokservices.com

ATM Skimmers: Top 5 Signs To Look For

We’ve heard increasing reports of illegally installed “skimmer” equipment on legitimate bank ATM’s that steal both the ATM card number and the PIN.   The equipment used to capture your ATM card number and PIN is cleverly disguised to look like normal ATM equipment.  

A “skimmer” is mounted to the front of the normal ATM card slot that reads the ATM card number and a camera is placed nearby to capture the PIN.  Top 5 signs to look for, and how to protect yourself:

1. A skimmer may be placed over or in the card reader.  Give it a tug to see if it comes off.
2. Be secretive when entering your pin number.  Cover the keys with one hand in case someone is looking over your shoulder or there may be a hidden camera nearby.
3. Check brochure boxes, they can have hidden cameras on or in them.
4. If you see wires poking out, a scanner that does not seem secure, multiple scanning devices, or a sticker that says “Scan here first”, Do Not Use The Machine
5. Often the criminals who install skimmers stay nearby and “assist” users with their transaction.  They may pose as another customer, or a technician working on the machine.  Do Not Use The Machine if someone offers to help you with it.

Remember, always check an ATM machine out carefully, and if anything seems amiss, use another machine and notify the bank branch of what you observed.  We once had our ATM card and PIN compromised and someone was withdrawing money in Korea.  Fortunately, our bank caught it and we were covered.  I’m sure either my wife or I used a machine that had a Skimmer and Camera set up and we didn’t even realize it.   

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Top 5 Reasons to Replace Checks with Prepaid Cards

Does your organization have recurring payment or disbursement programs such as:  Consumer Rebates, Customer Refunds, Insurance Claims, Affiliate Commissions, Student funds or Government payments?

Are you still issuing these with paper checks?  If so, you’re wasting time and money.

Use prepaid debit cards instead of writing checks and here’s the top 5 reason why:

5. Much lower issuance and administration cost – Eliminate the cost and time of handling lost or stolen checks

4. Reload the cards anytime online - For recurring disbursements, completely eliminate the cost of mailing a check

3.  Manage your entire program easily with online reporting tools - So much easier than manual processes

2.  Great branding opportunity - Person receiving the funds is now carrying your billboard in their wallet

1.  Get with the program…it’s 2010 not 1965.  People want prepaid cards, not checks!!!

Photo from www.creditcards.com

Customer Retention: A Real-Life Prospect Scenario

Is your customer dam overflowing?  Ever feel like you’re losing customers faster than your gaining them? Today, I thought I’d share an interesting application for Prepaid Debit cards that I’m working with a potential client.

The prospect is a telecommunications company that is in desperate need of a customer retention program.  They currently spend $0 dollars on customer retention because they believe the customer will keep coming back month after month if they wish to keep the service so why throw good money in that direction.  They spend millions of dollars on up front advertising to attract new customers.  So they must have a very high turnover rate as they continually need to push new customers into the system.

Every business needs new customers, especially in this particular volatile industry, but what they are missing is the value of the existing customer.  Some experts will tell you that it is 5 times more profitable to spend money and marketing dollars on retaining existing customers than it is on trying to acquire new customers.  The days of customer stickiness to a given brand are fading and cannot be relied upon to continue.

The prospect company does not make the customer sign a contract, so the business is month to month.  They are struggling with how to get the customer to stay.  Our suggestion is to use a reloadable, custom-branded Prepaid debit card as a perceived contract.  After 6 months of being a customer in good standing they receive the card with a small denomination, say $20.  Then after 12 months of continued service, $50 could be electronically loaded onto the card.  After two years, $100 would be put on the card.  The dollar amounts can vary, but you get the idea.  No contract signed, but the customers are incented to stick around.

Is your company in a similar situation?  Do you have an effective customer retention plan?  Does this spark your curiosity?  Stop the overflow and keep your customers.  Please let me know if I can help.

Amaze Your Customers and Employees: Virtual Prepaid Debit Cards

Are you looking for a very cool way to implement your next employee or customer incentive program?  Take advantage of a whole new way to run marketing promotions, one that attracts and rewards participants quickly and cost-effectively. 

Virtual Prepaid Debit Cards

How does it work? 

A prepaid account number is established and issued to an account holder. No physical card is issued. The virtual prepaid account is loaded with funds, and a standard 16 digit prepaid card number, expiration date and security value (security number on the back of the card) are emailed to the recipient. The recipient may then make purchases online or over the phone using this information.

Benefits to You:

1. Easy to Implement – Immediately deliver your incentives and rewards to employees, dealers, channel partners, sales associates and affiliates.
2. Speed of Delivery – Capture opportunities that are frequently lost when customers and employees have to wait for rewards to appear in the mail.
3. Cost Effective – Improve ROI by avoiding the fulfillment costs associated with prepaid cards.
4. Positive Impact - Instant gratification combined with strong branding will maximize your online promotional efforts.
5. Endless Opportunities - Match online promotions with instant, online rewards and incentives. 

Use Virtual Prepaid Cards for online surveys, consumer rebates, on-the-spot employee recognition, cross promotional tie in’s with online marketing, channel sales spiffs and much more.  Imagine how successful your program will be when you amaze your recipients with instant awards.

I’d love to hear if you have every used a Virtual Prepaid Card in any of your promotions so please leave comments below.  For more information feel free to contact me.

Incentive Programs: Guest Blogger – Katy Tynan

What Pigeons Can Teach You About Your Incentive Program

Why do psychologists spend so much time watching pigeons? While they don’t look much like people, a pigeon’s brain learns much the same way ours does. So the scientific study of motivation usually involves teaching pigeons to earn treats by behaving in a certain way.  If you want to teach a bird to jump over a stick, you start by giving him a treat when he approaches the stick.  Sooner or later he will climb on the stick, and you reward him for that.  Before long he’s an expert stick jumper.  In theory incentive programs in the workplace are structured the same way. Your team members achieve goals that benefit the organization, so you reward them with praise, money, or other incentives. Unfortunately the typical office is a far cry from the structured environment of the lab, and if you are not careful with the application of your reward strategy, you can end up with something called “Superstitious Conditioning”.

The story goes that a researcher automated his lab completely and then left for the weekend with the pigeons happily pressing levers and getting treats. When he returned on Monday he found his pigeons acting nutty. Some were turning in circles, others were banging their heads against the side of the boxes, and still others were pulling out their feathers. Stunned, he went to investigate and discovered that his automation had gone haywire and treats were being distributed randomly. Whatever the birds happened to be doing when the treat popped out, they started repeating and this increase in frequency made it more likely that they would be doing just that thing when the next treat appeared. Take that principle and apply it to people and you find the process that makes someone feel like they can’t close a deal unless they’re wearing their lucky hat.

As a manager you have many tools at your disposal to condition your employees to do their best. Rewards might come in any form from cash and gift cards to more intangible benefits such as flexibility or recognition. Whatever method you employ, the key to a successful strategy is consistency. If you give one person a week in Paris for landing a big client and then offer their colleague a $10 gift card, you will be buying nothing but trouble. So how can you make sure you are rewarding effectively and consistently? Here are some tips to streamline your incentive program:

1. Know Your Limits – Before you give out your first “atta-girl”, find out what type of reward structure your organization allows. Does HR have a stack of gift cards or travel vouchers you should use? Can you give vacation time if your team members put in extra hours or achieve certain goals? Make sure you don’t rock the boat by promising things you can’t deliver.

2. Tie Rewards to the Team Vision – Every team should have a stated vision that encompasses the key success metrics of the group as it relates to the success of the organization. If a team member goes above and beyond to hit a target that ties into your team vision, you should make sure to recognize it.

3. Praise in Public – Regardless of whether you are going to offer an additional tangible reward, you should make a point to recognize a team member whose actions you wish to reinforce. Send a message to the team letting them know that Bob pulled an all-nighter and saved a big client. This helps your team know what behaviors you like and want to see repeated.

4. Keep a Log – Before you reward an action, record it in a log. Include the date, employee’s name, their good deed, and what reward you gave them. This allows you to line up each incentive alongside other times you have recognized great work in your department so you can easily see whether you are being consistent or not.

At times you may want to implement specific rewards over a short period of time. For example if you have a new sales target to hit which requires every person on your team to complete five extra meetings each month, you may want to give a special gift to each team member who achieves this goal for the first three months. If you are creating an incentive program with limits, make sure you document the requirements and communicate them in advance. Rewards, especially monetary incentives, must be specific and consistently applied or you will tank your team morale instead of boosting it.

It goes without saying that if you have consequences for behavior you DON’T want to see, those should be applied with an equivalent level of fairness.

About the Author:  Katy Tynan is a management coach with Personal Focus Coaching (www.personalfocuscoaching.com).  She is also the author of Survive Your Promotion!  The 90 Day Success Plan for New Managers, which will be released in February of 2010.

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