Word Of Mouth Viral Marketing Fuelling Prepaid Growth
Ever since the appearance of prepaid cards in the UK in 2000/2001
, the prepaid debit card industry has been growing steadily. There has been exponential growth at times but nowhere close to the kind of growth that the scheme managers like MasterCard, Visa or Amex had predicted and the prepaid proposition still remains a work in progress.
- The Online vs. Offline Distribution Dilemma
For prepaid card issuers, one of the biggest dilemmas is establishing and picking the right distribution channels to reach consumers and currently, there is an unhealthy obsession with expensive offline distribution channels so much so that some issuers tend to focus too much time on putting their product in front of the consumer and too little time in actually building a proposition that will be attractive to those consumers.
Other's advocate a completely online approach which risks alienating a section of the population which does not, can not or will not venture online to search for the best deal. Whilst still significant and definitely not a segment to be ignored, this segment is growing smaller rapidly as customers move online to find the best deal.
- Word of Mouth Fuelling Prepaid Growth
With the mis-directed focus being on distribution channels, product designs, fee structures and more, it is not surprising that the product sectors which seem to be growing the fastest are prepaid gift cards, prepaid travel cards and moneyshare cards where the growth is being fuelled by word of mouth.
These products provide obvious and undeniable value to customers via discounts, cashback and rewards which ultimately translate into savings for consumers; savings that consumers understand and are significant, this is where word of mouth kicks in.
If it's a good idea, consumers will talk about it offline with their friends and online via the blogs and forums where strangers will quite happily accept and assimilate this advice and information into their purchase decisions.
- Why word of Mouth Works
Well, the simple reason is that "Word of Mouth" or "Viral" marketing, as it is also called, is unlike unsolicited advertisements or "spam," and is usually not delivered when the consumer has not sought it.
The unsolicited bits stop once they reach their destination whereas word of mouth continues to spread, almost without effort, as people who know you and have used your service and most importantly, are happy with it, tend to refer you to others thereby granting you a higher level of confidence, credibility and loyalty.
Given that word of mouth advertising is a critical element of promotion in the offline world and the prepaid card issuers are obsessed with developing offline channels, it is a wonder that very few prepaid card companies actually invest in a good viral marketing strategy.
The few who have, like the award winning BaBeeCard, have undoubtedly benefited from this with their mummy get mummy referrals and rewards scheme.
Of course, the best viral strategy is to simply have a great consumer friendly product proposition and then word of mouth really does take care of itself - strategy or no strategy.
by: Divya Sharma
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