Nov 20, 2007

Identifying merchant pains that can be addressed with new generation bank cards

I promised to reveal some of the not so visible marketing work that Welcome provides to its bank customers, or performs on the client’s behalf. This post is about helping payment brands identify and solve major problems for merchants, so that our clients’ cards and services become more valuable. It is part of a series of posts that I'm calling Behind the Scenes.

You can hear merchants describe some of their marketing pains here and here, along with descriptions of how their problems were addressed by one of Welcome’s bank customers. But you don’t see behind the scenes, how the pains were uncovered and identified in a way that points to a solution that can be uniquely solved with our client’s payment cards.

How do you identify the merchant’s pain? How do you figure out how to tie your payment services into that pain? Pierre Boces, Head of Product Marketing at Welcome, says, “We often start by reading the retailer’s annual report, their competitor’s annual report, and industry studies on the web.”

Take The Body Shop for example. At the very beginning of their 2005 annual 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 focus on the customer experience.

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.”

The brand promises to deliver high quality products at the lowest cost. They cannot risk offering low quality products which will destroy that promise. 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. On the 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 we know that we can’t ask them to give cardholders a 10% discount, and we know that they won’t be interested in loyalty points or miles because these tactics don’t fit the brand promise that they are promoting.

Pierre Boces describes his recommendations. “A better strategy would be to show how our client’s 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. This fits with the Body Shop’s culture and marketing objectives much better.”

“Another idea that fits is to show how our client’s payment brand can take corporate sponsorship to a new level,” he says, “by making it easier for customers to donate to The Body Shop Foundation. How many customers shop at The Body Shop specifically because they appreciate the company’s engagement in charities? The annual report talks a lot about this. At many outlets, you can see signs next to the POS inviting customers to donate to The Body Shop Foundation and other organizations. Using the credit or debit card receipt to show the total cumulative amount that has been donated on each customer’s behalf, as well as amounts donated directly by the customer when shopping at The Body Shop, would link the payment brand directly into the retailer's brand promise, making our client’s brand that much stickier.”

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