Jan 23, 2006

Key success factor #3: Deploy faster by leveraging the experience of other banks around the world

(This is the fourth post in a series on key success factors and common mistakes.)

This is basic common sense that is sometimes overlooked. It’s tempting to think that everything in one’s own market is so unique that one cannot get much practical value out of looking at what others are doing in other parts of the world. I thoroughly enjoy the differences between markets and cultures, but at the same time it seems that more and more things work the same in lots of places. The fact that more and more brands are able to thrive globally illustrates this point.

When a bank proposes its payments services to a global retail organization like McDonald’s, Carrefour, BP or Pizza Hut, the bank rarely takes the initiative to call colleagues and peers at other banks in other countries to see how they have dealt with these same organizations. With commoditized payments services that are essentially the same everywhere, there is no real need to share knowledge and experience. Now, as banks increasingly focus on getting more value and revenue out of their payments data (here is an earlier post on this trend), their offerings to these global retail organizations will become more complex and more differentiated, and sharing knowledge and experience will become useful.

Welcome’s licensees all deal with the same global retail organizations, sometimes even at the same time. At any point in time several banks could be talking with the same retailer, each in a different country. Banks are showing a strong interest in understanding how their peers in other countries deal with these organizations and the types of marketing strategies that work in other parts of the world. When they are preparing a proposal say for BP, they want to be able to call a peer in another country to understand the marketing strategy that was successfully used with BP over there.

Here is a simple example. UBL Bank helped Pizza Hut launch frequent buyer promotions in Pakistan and created a promotional flyer describing the special offers. The flyer was then shared with several other banks in other countries. A few months later, in Malaysia, Maybank helped Pizza Hut launch very similar promotions, using a very similar flyer.

There is an opportunity to go a step beyond that. Some banks are already talking with each other to explore achieving critical mass faster by accepting each other’s cards. This would instantly create a much larger cardholder base, therefore a larger number of potential customers for retailers, which always helps when negotiating payments services with large retailers like Carrefour, McDonald’s and BP.

Prior posts in this series:
5 key factors for success (and 7 common but critical mistakes)
Key success factor #1: Focus on enhancing the payment experience
Key success factor #2: Achieve cardholder critical mass very quickly, merchants will follow


Lee said...

I had the privelage of seeing some of the leaders in the Smart Card industry and you definitely fall into that category. Do you think that you are all working towards a mutual adoption of the Smart Card or finding yourself competing for a target market?

Aneace Haddad said...

I guess it would depend on who all the other players are. Lots of people are working towards making it easier and more profitable for banks to adopt smart cards. People within the associations, within banks themselves, processors and technology providers. At the same time, there is certainly intense competition among all of these players. People are struggling to come out on top in terms of the greatest added value. All healthty stuff for banks deploying smart cards.