Nov 10, 2005

Payment services that are irresistible, not just nice-to-have

Everybody hates just being nice-to-have. It is much more fun and exciting providing something that people want and need now, no matter what the cost. People gladly wait in lines and pay ridiculous prices for an iPOD. I know I did, and then 3 weeks later the Nano came out. But how do you make payment irresistible like that? Can you?

One of the things that I have really enjoyed doing over the past couple of years is showing how a bank's payment services can become irresistible to merchants, by showing how they can help solve major problems that keep merchants awake at night. This involves lots of out of the box thinking, but once the initial methodology is understood, it is all really pretty simple. Identifying the merchant’s pain, and figuring out how to tie your payment services in as a solution to that pain turns out to be pretty straightforward and not very difficult.

How do you identify the merchant’s pain? How do you figure out how to tie your payment services into that pain? In many cases, you can start by reading the company’s annual report, their competitor’s annual report, and industry studies on the web. Take The Body Shop for example. Their 2005 annual report has lots of very useful information. At the very beginning of the report, their mission statement talks about the customer experience no less than 3 times. They want to “deliver with passion to our customers a unique experience”, provide a shopping environment that “excites, inspires and informs”, and reinvest in the business to “constantly improve our customers’ experiences”. All of that is in the mission statement. Then on page 4 you can read in big letters in the centre of the page that “A new store design has been developed to offer customers an improved in-store experience at The Body Shop”. So you know that you need to address the customer experience. You can’t leave that out.

On page 3, you can read a section on brand repositioning: “Over the last three years, we have pursued a strategy of repositioning The Body Shop brand to the ‘masstige’ sector of the consumer market. This ‘masstige’ positioning differentiates The Body Shop by offering customers a shopping experience that combines excellent service with a comprehensive range of naturally-inspired personal care products that offer performance, indulgence and great value.” So the brand promises to deliver high quality products at the lowest cost. They cannot risk offering low quality products which will destroy that promise. In the same way, they cannot risk offering discount promotions like 20% off this product or 30% off that product, because this would tell customers that the regular price is not really the lowest it could possibly be. In fact, on that very same page, they even say what type of marketing promotions work for them: “Our global marketing programmes are designed to support the ‘masstige’ positioning of the brand. Promotions are developed to offer added value, sampling opportunities and gifts with purchase to encourage customer loyalty.” So you know you can’t ask them to give your cardholders a 10% discount, and you know that they won’t be interested in loyalty points or miles because these tactics just don’t fit the brand promise that they are promoting.

A better strategy would be to show how your payment services can enhance the customer’s shopping experience with gift sample promotions printed at the bottom of the payment card receipt. For example, offer a different gift sample at each visit or a bigger and bigger sample each time the customer goes over a £100 cumulative purchase threshold. Even better, show how your payment services can take corporate sponsorship to a new level, by making it easier for customers to donate to The Body Shop Foundation. This would link your payment brand directly into the retailer's brand promise, making your brand that much stickier.

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