How Do You Build Acceptance Of A Disruptive Model?

Openbucks, creator of an alternative payment platform called the Gift Card Payment Network

, recently introduced a disruptive business proposition. The company's immediate focus is to pitch the solution as an attractive alternative payment process in the hopes of partnering with other companies who will adopt the Gift Card Payment Network. We asked Openbucks' CEO, Marc Rochman, what he believes the best practices are for building acceptance of a disruptive model.

Notes from a conversation with Marc Rochman, CEO, Openbucks:

Any business, especially an innovative start-up, is bound to meet a wall of resistance; the key is finding the cracks in the wall. This is especially the case when you are selling your idea to multi-national companies and large retailers. The key to finding "the cracks in the wall" is having the ability to demonstrate a significant benefit to the retail outlet as well as the end consumer. However, most important is to find a partner who has an early adopter attitude or culture.

Often the principal resistance is not with the product or solutions being presented - this can have immediate appeal - but fear from the potential partner because they will be the first through the gate in terms of implementation. There is a natural resistance to investing time and resources on a product and a company who haven't yet proven themselves. The fear stems from a perception that if the solution turns out badly the penalty may be severe, especially for the executive who made the decision. Executives tend to have a relatively small reward when taking a big risk. Most large companies have counter incentives when it comes to innovation making them adverse to risks. Given these facts, it is important to understand the root of the risk-reward fear.

Openbucks recently introduced a new payment solution for people who don't have bank accounts or credit cards - teenagers and people without strong credit. The company allows people to purchase a gift card from a retailer such as Subway and use that gift card to buy in-store goods as well as to pay for digital goods inside hundreds of online games. Below we take a look at two companies who have become early adopters of the Openbucks platform for some clues as to why they decided to form the partnership.

Openbucks' first partner is Subway. They are innovative, imaginative and not afraid to be first with a new concept. Innovation is part of their culture. In addition, Subway also happens to have a subsidiary that specializes in payments and payment processing so they immediately understood the model. Subway has more stores than any other retailer in the US. The Openbucks solution was a natural extension of the utility of their gift card program for Subway because they understand payment processes and how to use them to create loyalty and foot traffic. The program is not only simple, but it's also a win-win-win for the consumer, the retail outlet, and merchants who can collect cash-like payments from the millions of unbanked or under-banked as well as those who like to avoid using their credit cards online. When a purchase of a $10 Subway gift card is made, it can be used to not only buy a Subway sandwich, but also for gaming credits inside mini digital stores in hundreds of online games. It turns out that 54% of the people who buy a gift card for that purpose also get a sandwich - a clear value to the retailer. Further, since they have the card, they are more likely to be repeat customers. Subway introduced the platform through a nation-wide launch and they have already seen great success through increased foot traffic in stores with more people buying gift cards then ever before.

Another early partner is CVS Pharmacy. To CVS the appeal was the model of convenience and a way to encourage repeat customer visits. Since people visit pharmacies to get prescriptions and a host of other products on a regular basis, the convenience of buying a gift card during a routine visits is already there.

The keys to overcoming objections to innovation are two. Be resilient and patient, especially when working with large companies. Once they begin to see a trend of success, they will more likely be ready for mass adoption. Companies unwilling to adapt to new innovations may not be around for very long anyway. Second, strike the right balance between persistence and a willingness to adapt your product when you see an opportunity. Pivot or tweak your model to take advantage of a new opportunity that you did not anticipate originally. The pivot allows you to take an easier path instead of banging against the wall too long. Sometimes you just have to go around the wall.

by: Sandy McMahon

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