Visa has announced the first phase of a new national marketing program designed to raise consumer awareness about the benefits of using reloadable prepaid debit cards instead of cash for purchases. The campaign targets financially underserved consumers -- primarily those without a traditional banking relationship. Visa estimates that there are approximately 80 million financially underserved consumers in the U.S. alone. The multichannel campaign features social media (including a new Visa prepaid debit Facebook page), mobile, digital, grassroots events and radio advertising, as well as in-store demonstrations, displays, and promotions. Online display ads provide direct access to purchasing cards online through Visa partners, and social media enables consumers to connect as a community through the Visa Prepaid Debit Facebook page (www.Facebook.com/VisaPrepaidDebit). In-store demonstrations and local events provide an opportunity for personal interaction with consumers, where product experts explain how reloadable prepaid cards work, and help consumers apply for a card onsite. Digital media, which have become a core pillar of San Francisco-based Visa's marketing efforts under CMO Antonio Lucio, represent a central element of the campaign. The new campaign follows recent digital successes in support of global marketing efforts around the Olympic Games (Go World) and FIFA World Cup (Go Fans). The campaign brings to life how Visa prepaid debit cards can enable better money management and empower consumers looking for an alternative to a cash-and-carry lifestyle. The fundamental messages of the campaign focus on debit cards' core product values, including that they enable consumers to manage their spending on their terms and give them the ability to make purchases online, at retailers or to pay bills. The campaign also plays up the card's security, in that it is safer than cash and registered cards are replaceable if lost or stolen. The cards can also give consumers easy and timely access to their money through direct deposit. Research by the Mercator Advisory Group shows that the majority of consumers do not make full use of the opportunities provided by prepaid cards.
People still use and need their banks, but they're at least open to considering other options to pay their bills and make necessary purchases. According to Mintel Comperemedia, 19% of consumers responding in a survey that they would be interested in using prepaid cards rather than a banking account to pay their bills. Their main motivation: avoiding overdraft and other fees. Of even more concern for banks is that the percentage of those willing to consider the prepaid cards increased among the affluent. Of households earning more than $100,000 a year, 25% said they would be interested in prepaid cards as a bill-payment option. "The relationship people have with their banks is [viewed as] a 'necessary,'" Susan Menke, vice president and behavioral economist at Mintel Comperemedia, tells Marketing Daily. "What's happening is that people are willing to try alternatives. Inertia has been the banks' best friend. And inertia can't drive an industry forever." The survey findings indicate there's an opportunity for a "white knight" to lure banking consumers with new payment alternatives, whether prepaid cards, mobile service or some other technology not yet invented, Menke says. The point is, "people are willing to entertain the notion of using alternatives to what they're used," Menke says. These new options may want to appeal to consumers through rebates or cash-back offers for using the prepaid cards. According to Mintel, approximately 60% of consumers said they'd be interested in using prepaid cards if such offers were made; 70% said discounts at merchants would also be attractive. People are not willing to totally give up on banks, however. According to Mintel, only 3% of consumers said they would prefer to have their paycheck loaded on a prepaid card rather than have it directly deposited to a bank or handed out in cash or a check.
General Electric has launched a private online community for its global network of 5,000 marketers. An intramural social networking platform called MarkNet, the program is designed to connect marketers from different GE divisions who normally wouldn't speak to each other because they belong to different marketing silos. The company says it now has about 3,000 marketers around the world signed in to the program to share best practices via communities differentiated not by GE products but by marketing practices. The effort is via Passenger, which has done similar programs for Fox, Microsoft, Mercedes and Coca-Cola. Steve Liguori, executive director of global marketing at GE, tells Marketing Daily that community members can participate in webinars, blog posts, message boards and marketing issues like innovation, pricing and packaging. He says it's a big change from how GE has done idea-sharing in the past. "The simple analogy for how we used to do this would be an updated game of telephone, where one person tells another something, and that person tells someone else, and on and on," he says. "We were basically doing an updated version of that with PowerPoint and email, one person to another. Who knew that best practice had anything to do with what you need when you need it?" He says the MarkNet program is sort of an intramural social community. "Since we have now over 3,000 logging in, you can post a question to the community within one of the publications [differentiated by practice] and as people log on they can offer help and advice. It's global and it's real time." Liguori says that if, say, a marketer in Mumbai hears from his supervisor that the company is losing margin on a product, and that "our pricing must be wrong," and there is no pricing expertise there, "You might ask for a pricing model or advice from GE Capital or Health Care, or from any other GE division around the world." He says that until now, there had been no platform to exercise that kind of cross-functional conversation. The idea came to Liguori a year and a half ago when he was working out of GE's London office and discovered that people doing the same job in the same region in the same building not only weren't sharing information, but had no idea that their counterparts existed. "I'm on the fourth floor at GE Capital with someone who handles pricing for Europe and Asia. A few hours later, I'm upstairs with someone who oversees pricing for GE's healthcare division in Europe and Asia, and he has never met or heard of the person downstairs. That's because we hire by industry, but what we found is that people are struggling with the same kinds of issues." Liguori says GE launched a beta test of the new network in April last year. "But it was clunky," he says. "Still, we got tremendous reception: users said it was great even though it was hard to use the software." He says since the official launch in April this year, about 75% of all GE marketers around the world now voluntarily participate. "No, it's not mandatory, but marketing functional teams have all formed their own volunteer leadership, so it has been very grassroots -- people who have stood up and said, 'I'll run the pricing team for six months.' Someone's also doing that on branding and communications."
When it comes to restaurants, two new studies point to social media still having a somewhat limited impact on the overall consumer universe, but a very strong influence within specific, generally younger, segments. One points to significant opportunities among early technology adopters, based on their use of social media and heavy QSR and fast-casual restaurant use. The other, focused just on QSRs, finds that social media is not a major fast-food information source for most consumers, but is very important, particularly for promotions, among those who do use these media in relation to fast food. In a survey of 1,000 U.S. consumers, food/foodservice consultancy Technomic found that when it comes to using cutting-edge tech products and Web sites, 8% and 15% of respondents can be characterized, respectively, as "innovators" and "early adopters," based on the adoption curve model of Everett Rogers. (Innovators are the first to try innovations, while early adopters are opinion leaders who form the second wave of adopters.) Fully 83% of the innovators and 72% of the early adopters reported ordering from fast-food restaurants at least once per week compared to 56%, on average, among consumers overall, according to this "Leveraging Social Media and Technologies" research. In addition, 53% of innovators and 35% of early adopters reported ordering from fast-casual restaurants at least once per week, compared to an average of 20% for consumers overall. Furthermore, 48% of both of these early-adopter groups, compared to just 25% of consumers overall, confirmed that a restaurant's presence on a social network (such as a branded Facebook fan page) positively influences their decision to try that restaurant. The correlations between early tech adopters and heavy restaurant patronage can likely be attributed in large part to early adopters' higher-than-average affluence, which also enables them to eat out more frequently, Technomic EVP Darren Tristano tells Marketing Daily. More important, he points out, is the confirmation that these early adopters -- groups that are also highly active in social media -- are likely to be among the first to broadcast their opinions about a restaurant promotion, a new restaurant concept or one that they have tried for the first time. "With younger people, in particular, consuming less traditional media, our research findings overall confirm the importance of using social media not just to get the word out about promotions or new menu items, but to get immediate feedback on food, service and pricing and to enlist fans as ambassadors to grow restaurant brands," Tristano sums up. National restaurant chains are working hard to tap into social networks' reach and influence, but independents and regionals should also jump on these media as opportunities to develop strong local fan bases among early adopters, noted Technomic Director of Product Innovation Erik Thoresen. Meanwhile, a study from brand development firm M/A/R/C Research probed social media's impacts on QSRs, specifically, by surveying more than 10,000 U.S. consumers who had dined at one or more QSRs during the past month (including burgers, chicken, Mexican food, pizza, sandwiches and/or seafood). One-third of fast-food diners reported not using any social networking sites -- but importantly, most of these non-users are over age 54. Among social media users, 59% reported using Facebook, followed by YouTube (22%), MySpace (20%), Twitter (13%), blog sites (5%) and "some other" social media site (6%). Facebook users skewed female (54%), while YouTube users skewed male (62%). Fully 59% of those using social media reported using these on a daily basis, versus 27% accessing them weekly, 8% monthly and 6% less often. Whether because of QSRs' familiarity factor or other reasons, when it comes to getting information about or evaluating a fast-food restaurant, more than half deemed social media not at all important or not very important (29% and 26%, respectively). However, 23% consider these media somewhat important, 13% very important, and 9% extremely important. Those who considered social media important skewed male. Among those using social media for fast-food purposes, 57% said they use them to find coupons or promotions, 48% to learn about brands' menu items, 45% to find locations near them, 41% to get feedback/ reviews from other consumers, and 39% to do price comparisons with other restaurants. "Although the majority of consumers aren't specifically using social media to obtain information about QSR brands," it's important to note that many who do are looking for coupons and/or promotions, observed M/A/R/C EVP Randy Wahl. Also, among those who have used social media in relation to fast food, nearly 70% said that it's extremely or very important for fast-food brands to participate in these media. Just 5% found the social media-based information provided by fast-food brands to lack credibility. One quarter found QSR brands' social media information to be extremely believable, 38% very believable, and 32% somewhat believable. (Males were most likely to find the information most believable.) More than half (56%) of social media users in general did not recall seeing references by other consumers to any fast-food restaurants on these media. Still, 36% did remember seeing fast-food restaurant mentions on Facebook, 12% on YouTube, 10% each on Twitter and MySpace, and 6% on blogs. Probed further, just 7% of those who had seen references said that these were more negative than positive in nature. Furthermore, just 12% deemed the comments lacking in credibility. In fact, 52% described them as somewhat believable, 25% as very believable, and 9% as extremely believable.
Marketers spent $65.2 billion on Internet advertising in 2008, and Geoff Ramsey, co-founder of research firm eMarketer, told the Association of National Advertisers' Social Media conference attendees last week that while that number is going to grow dramatically in coming years, many marketers don't know how to include social media in the mix. EMarketer predicts an 11% growth rate this year in digital media spend with search increasing 16% this year, and display ads up 13%. "You need these two pistons, search and display (banner, buttons, etc.) to keep the Internet economy healthy," said Ramsey. But he illustrated how little-prepared marketers are for what's happening in social media by asking for a show of hands among the marketers in the packed auditorium for those who "have a handle on social media." Not a hand went up. Sixty percent of marketers, he said, are doing "something" with social media (the other 40% are "anti-social"), and 40% to 80% of them are boosting spend on social media this year. Ramsey says brands should use such platforms -- Twitter, for instance -- to do less talking and more listening. Also, he pointed out, Twitter's user numbers are a bit misleading: while 12% of U.S. adults use Twitter, only one-fifth of those have ever posted a Tweet; most of those have sent one Tweet so far; and 90% of Twitter volume comes from 10% of users. But, he says, a look at how one QSR uses Twitter is instructive. "Starbucks, which has a record 10 million fans in social media, is essentially using Twitter as a suggestion box," he said. "The way you want to think about it is as a pond. You throw stuff out there -- ads, for instance -- and what you are looking for is the ripple effect. It's the measurement of that where you see the real value of social media. Listening is an important analytic and informs [Starbucks'] marketing." Another example, he said, is Harrah's, which changed its campaign focus when it discovered that Twitter volume was saying its ads were not resonating. "They switched to a focus on the comfort of their rooms, changing the campaign in real-time, and saw a double-digit increase in online booking." Ramsey said social media efforts should also focus on core fans and the fact that they have a far greater ability than the brand itself to create more fans. "They have an inordinate amount of influence," he said. "You want to view them as owners of the brand and cultivate them carefully. If you do that, they will grow their ranks." The reason is that people like to be consistent, he said. They like to do what they say and vice versa: just as a person who uses a brand is more likely to "friend" it in social media, a person who becomes a fan of a brand or product on social media (perhaps by recommendation) is more likely to then become a customer.
Under-banked markets are those Designated Market Areas (DMA) with the highest percentage of adult residents without either a savings or checking account. 1 Laredo, Texas 2 Greenwood-Greenville, Miss. 3 Harlingen-Weslaco-Brownsville-McAllen, Texas 4 Albany, Ga. 5 Columbus, Ga. 6 Yuma, Ariz. / El Centro, Calif. 7 Corpus Christi, Texas 8 Fresno-Visalia, Calif. 9 Baton Rouge, La. 10 El Paso, Texas Source: Experian Simmons
Business leaders face the most disruptive market conditions in decades as competition keeps increasing, large rivals continue to compete aggressively by buying market share, new entrants are more nimble and substitute products seem to pop up almost at every turn. These competitive forces particularly apply to the telecommunications industry, where competitors continue to slug it out for increasingly demanding customers who treat products and services as commodities and where price, unfortunately, becomes the only differentiator. To deal with these changes, telecommunication providers -- telephone companies, cable TV companies, wireless companies and satellite TV companies -- need to change their organizational design as "inside-out" structures that put products, not customers, at the center of the organization. They need to become truly customer-centric, and to get there, they need to take these three critical steps: 1. Create a Lifetime Value Model A lifetime value model measures customer performance and profitability to begin the organizational shift from product-focus to customer-focus. In its simplest form, customer lifetime value is the present value of a customer based on future cash flows attributed to the relationship. Essentially, the figure represents how much a company can spend acquiring and keeping your customers. This produces a net value of increasing your retention rate (or decreasing churn) and the value of increasing average revenue per unit (ARPU). Lifetime value can be calculated across the entire customer base, but to make the metric truly valuable, it should be calculated on a segment-by-segment basis, using churn rate, discount rate, ARPU, cost per gross add, cash cost per unit and total marketing cost. 2. Manage Customer Segments to Optimize Shareholder ValueA firm provides value to a customer in terms of products and services, and a customer provides value to a firm in terms of stream of profits over time. Investment in a customer today may provide benefits to the firm in the future. In that sense, customers are assets in which a firm needs to invest. At the same time, with any investment, the firm needs to assess the potential return. Since some customer segments drive profits and others do not, investment in customers should vary by their profit contribution and potential. Many executives speak of how "customer-focused" their organization is, but can't pass the three question test: