Maximizing returns on your prepaid investment

Prepaid solutions provide great opportunities for businesses and governments to improve their operations and manage their payments by allow them to accept and process payments without the need to involve third party (such as a bank or payment solution provider, like Visa and MasterCard).

During the most recent Cartes & ID 2010 conference, Tony Craddock, CEO of Global Prepaid Exchange and Prepaid Awards, spoke about the important role of the prepaid solutions saying that "You should think about prepaid differently. It is not just a part of the payment industry but rather a capability to solve problems for customers, corporates, and governments". Carddock demonstrated how businesses can use prepaid solutions as an innovative way to improve their business operations rather than just as an add-on service.

Prepaid industry represents currently about € 400 Billion and the average load on the prepaid card from Visa and MaterCard is about $50. Jean-Louis Meyer, Financial/Telecom Segment Marketing Manager at Datacard Group, indicated that customers are interested in customizing their prepaid cards by adding their own photos and the technology today allows businesses to issue their prepaid cards using different channels and in different ways (using vending machines, over the internet, in stores or shops, … etc). Meyer explained how many businesses are currently using social media to connect with their customers and sell their prepaid cards.

Don't think about loyalty as plastic cards but rather as a strategy

Businesses understand that getting new customers is more costly than maintaining loyal customers. However, when it comes to implementing sales and marketing strategy, many businesses focus on offering great incentives to new customers rather than rewarding their regular customers for their loyalty.

During the most recent Cartes & ID 2010 Conference, Anamaria Chiuzan, Senior Marketing Manager at The Logic Group, spoke about this loyalty paradox saying that "businesses should not think about loyalty as plastic cards but rather as a strategy".

Based on her research, she said that customers think that companies are benefiting from loyalty programs more than they do and for that they are getting loyalty memberships in many loyalty programs to get the benefits of all these loyalty programs (In another word, their loyalty is related to the benefits that they are getting not the brand). Also, she noticed that businesses are shifting their focus from providing exceptional customer service to their loyal customers to just offering them discounts and cash back.

Chiuzan stressed on the importance of understanding the business strategy objectives of the loyalty program to ensure that the loyalty program will:

1. Retain top customers (Loyal customers don't need to be more loyal to get a reward, they should be rewarded for being loyal customers)
2. Interact with customers using the right channels (TV, Internet, Billboard).
3. Clearly show customers the behavior they should follow to get a reward.
4. Give customers easy options for reward redemption (Customers spend approximately 3 times their normal spending when they do redemption)
5. Help businesses in understanding the shopping behavior of the customers to better target them (by sending them relevant massages based on their shopping profiles).

To get more details about these issues, please download the Loyalty Report 2010. (http://www.the-logic-group.com/Product/LoyaltyReport2010)