Other articles in this special report:
Phone cards: A big new promo vehicle page 17 The technical side of calling cards: page 21
Attitudes: Marketers are creating new approaches to sales promotions: page 22
Leo Slocombe is executive vice-president, Marketing & Promotion Group, Toronto. He has closely followed the development of telephone debit cards, from a promotion marketing perspective, since they were invented in the mid-1970s. He can be reached at (416)-862-8300.
We believe prepaid long-distance calling cards are North America’s new promotion currency.
So sure, in fact, that we trademarked the phrase six months ago: ‘The New Promotional Currency ™’ appears on the card Marketing & Promotion Group has developed to promote the concept in Canada.
Even though debit cards have been around for about 20 years – they are common in Europe and Japan – they are an infant in North America.
But a pretty robust infant. Prepaid phone cards are already a $1 billion business in the u.s.
In Canada, they are just beginning to make an impact on the consumer market and the promotion industry. Debit cards are now available at drugstores and convenience stores, airports and postal centres.
The first tentative promotion steps have been taken by companies in diverse markets – travel, fast food, pharmaceuticals, beer and cereals.
There is tremendous interest among marketing professionals in Canada – for good reason.
Phone cards offer added value at less cost than cash; the perceived value of a free telephone call is high, and it is a low-cost opportunity to gather valuable data.
The technology is so pervasive in many parts of Europe and Japan, it is hard to find a coin-operated telephone. Most are read through a slot in the phone unit.
While Bell Canada recently launched a reader card to be used at specific pay phones (Strategy, June 12, 1995), the North American market has so far taken a different route, one which does not require special public telephones, and which can be activated from any touch-tone unit.
It is called remote memory:
– The caller dials a toll-free 800 number printed on the card and is automatically prompted to enter a unique number (pin), also on the card.
– The pin verifies validity and checks long-distance time remaining.
– A customized message – it can be interactive – promotes a product or service. This is independent of long-distance time.
– The caller is then instructed to place the call and a warning message is heard with one minute remaining.
– Calls can be made anywhere in North America – or worldwide, for that matter.
Used properly, prepaid phone cards are a powerful promotion marketing tool with a wide range of benefits:
– Cost. High perceived value, yet the cost is a lot less than cash.
– Mass appeal. Everyone uses long-distance, which can easily be integrated into wider sales, trade or consumer programs.
– High impact. The card is a billboard for products and services.
– Customization. Users hear specific interactive messages when they call. In addition the ‘card’ can be customized – as a ‘match and win’, printed on a T-shirt, inside a pack or bottle cap.
– Instant gratification. The user does not wait weeks for mail delivery.
– Versatility. Companies can select any length of time to give consumers, and techniques include instant win games, free mail-in, free-with-purchase, in-pack premiums, refund offers, sweepstakes, sales and trade incentives.
– Evolution. The technology is developing rapidly, offering more and more opportunity. One area is in data capture and database marketing. Another is in altruistic and fundraising programs in which a percentage of each call can be diverted to charity.
Service providers to the promotion industry are just starting to emerge. Some have been selling debit cards – strictly as a consumer service – for a number of years. Others are just now setting up shop.
The point is that the vast majority of these providers have an impressive background in telecommunications, but little in our field.
Corporate marketing and promotion professionals have a special combination of needs when it comes to this technology.
For example, they need due diligence – imagine customer response if the service provider cannot deliver.
Also, there are questions unique to Canada, Canadian Radio-television and Telecommunications Commission regulation and cross-border tariffs, for example.
They need to understand the evolution of the technology – where it is going next and how best to take advantage as a marketer.
Most important, managers need to use phone cards strategically to help meet long-term objectives.
In addition to the technology, we spent an inordinate amount of time developing strategies which convert prepaid phone cards into effective promotion tools.
For example, m&pg devised a solution so consumers can respond instantly to the ‘skill testing question’ – a Canadian legal requirement on instant win games.
For a Labatt Breweries of Canada promotion in the Maritimes – Stay In Touch With Keith’s – scratch cards offering free long-distance were inserted in cases of Keith’s beer, a hugely popular regional brand.
One card in 10 was a winner. The skill-testing question was printed on all cards. Before a winning card was activated, callers were prompted over the telephone to punch in the correct answer.
No waiting. No mailing. No additional complication.
I agree this example is subtle – but it does point out the importance of a marketing frame of reference.
The near future is promising. We are not that far from sophisticated smart cards that can hold an immense amount of information.
Right now, software can record the telephone number (therefore, the name and address) of callers. Consumers can be prompted via interactive voice response to enter information about themselves and their preferences.
In fact, in some circumstances, it is a much more cost-effective way of gathering information.
Imagine what this can do for a client’s database and direct mail program.
But, that’s another story.
