Prepare for Prepaid Retailing Growth

According to the Wall Street Journal, investors in Green Dot Corp. are worried about the company’s future. Green Dot sells prepaid debit cards for use in retail stores. The worry is that prepaid has become so popular competitors like American Express Co. and Western Union Co. who have entered the market will steal substantial share from Green Dot. Those two competitors have broader brand recognition and more diversified income portfolios.
     The relevance for you is that prepaid is popular. Actually, it’s been quite popular under a different name: Gift cards are the single most requested item for the holidays. More than 55% of adults say that’s their present of choice.
     Different versions of flat free pricing also have the customer pay up front:

• Protect against bad surprises. With a retainer system, people pay for legal insurance or ID theft insurance at the start of a service period. For whatever types of services you sell, you could offer priority attention for needs that arise during the one year after payment is made. 
• Surprise me. Subscriptions to periodicals and Community Supported Agriculture fit in this category. So do the shoe-of-the-month clubs in which subscribers are offered a selection every time the calendar page turns. The selection is determined by answers to questions the member gave upon enrollment, the member’s past purchases, and the club’s data about all members’ purchasing preferences. How might you adapt this idea to increase the range of income sources for items you sell? 
• Not at all surprising. People who join health clubs or enroll in classes pay in advance, knowing what they’ll get in return. Maybe the only surprise is when the purchaser recognizes it’s not all turnkey. A few Januarys ago, I spotted an unfamiliar face and body in the men’s locker room at the Gold’s Gym I frequent. Since he looked truly downcast, I walked over to him and asked, “Are you all right?” He looked up at me and said, “I’m realizing that you can’t just sign up. You have to go out there and exercise.” Health club retailer Planet Fitness has used “Pat On the Back” and “Judgement Free Zone” campaigns. 

     Here are two research-based tips for flat fee pricing plans:

• To maintain goodwill, allow cancellations, but with a penalty 
• In estimating capacity, realize the purchasers tend to make more use of their prepaid prerogatives at the start of the period than later. 

Click below for more: 
Reenergize Gift Card Sales 
Shoe Things for Higher Sales Revenues 
Bet on Consumers Wanting Turnkey Experiences 
Get Customers In Touch with Each Other