Prepaid Cards and Word of Mouth
Even 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 100% 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 a significant segment and definitely not one to be ignored, this segment is growing smaller rapidly as customers move to the Internet to find the best deal.
Word of Mouth Fuelling Prepaid Credit Card 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 cashback, discounts and rewards which ultimately translate into consumer savings; savings that they clearly understand and are significant; this is where word of mouth and the viral effect 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 unlike unsolicited advertisements or "spam", “Word of Mouth” or “Viral” marketing, as it is also called is usually not delivered when the consumer has not sought it. The unsolicited bits tend to stopped in their tracks 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 and referrals are critical elements 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.
Find out more about the BaBeeCard at Prepaid365.
Tags: Award Winning Prepaid Card, Babeecard, prepaid card distribution, prepaid cards, viral marketing, word of mouth