Ever since the appearance of prepaid cards in the UK in 2000/2001, the prepaid card industry has been growing steadily. There has been exponential growth in some sectors which others have lagged behind but the growth has been nowhere close to the kind of growth that the scheme managers like Mastercard, Amex or Visa predicted and the prepaid card 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 prepaid card issuers, sometimes placing their somewhat misdirected focus solely 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 the travel money, money remittance and teen prepaid credit card sectors and the majority of this growth is being fuelled by word of mouth and viral marketing.
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 and this is really 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 Viral Marketing or Word of Mouth Works
Well, the simplest explanation is that unlike unsolicited advertisements or “spam”, “Viral” marketing or “Word of Mouth”, 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 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 BaBeeCard, Caxton FX, Cashplus Prepaid Mastercard, Neteller and Escape Prepaid Travel Cards have undoubtedly benefited from this viral effect.
Of course, the best viral strategy is also the simplest one which is to have a great consumer friendly product proposition and then word of mouth really does take care of itself – strategy or no strategy.
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