E-print from Paybefore Magazine Fall 2011

Transcription

1 Know Your Audience MasterCard studies the differences and similarities among consumers in five European countries By Bill Grabarek, Senior Writer Prepaid card usage across Europe is increasing. But to take advantage of this growth, marketers, program managers and issuers must position their products correctly and to do that, they must understand the nuances of each country. Nearly 40 percent of consumers surveyed across France, Germany, Italy, Poland and the U.K. have owned or used a, according to a MasterCard Worldwide study concluded at the end of last year. Italy recorded the highest usage with 56 percent of respondents and Poland was the lowest with 24 percent. Furthermore, MasterCard research indicates usage across Europe will continue to increase, with a compound annual growth rate of 27 percent from 2009 to The growth rates vary widely by country, according to the Purchase, N.Y.-based card network, but all markets are experiencing double-digit growth. To be successful, providers must look at what is motivating consumers to use s. And, first and foremost, industry players must rethink how they are marketing their products, according to Matt Lanford, head of prepaid Europe at MasterCard Worldwide.

2 U.K. Prepaid Card Rankings by Market Youth Germany Youth France Youth The represents approximately 200 different payment cards of all types tested by TNS for MasterCard in the past. Prepaid cards listed in the top 25 percent of the scored among the best of the cards tested by TNS, and have the most potential and highest consumer appeal in a given country based on various factors, including consumer awareness, interest, relevance and willingness to apply for it. source: TNS Prepaid Cards in Europe (December 2010) MasterCard

3 Poland Youth Italy Youth Fulfilling Wants and Desires If you position prepaid just like a credit or just like a debit card, it becomes another card in somebody s wallet, Lanford tells Paybefore. What is really important to consumers is: What s in it for me? Why should I get this product? Why should I use this product over my debit card? Why should I use this product over cash? You need to find that latent, unmet need of the consumer, Lanford says. A consumer with debit and credit cards, for example, might be uncomfortable using those cards to shop on the Internet. The consumer s need is to feel more secure when making purchases online. The what s in it for me for this type of consumer, according to Lanford, is a prepaid product where a small amount of money can be loaded, enabling the consumer to shop online more comfortably. It is identifying all of the various examples and problems that are out there and then building your marketing campaign, your materials, your messaging to draw in those consumers who have those particular problems or concerns that they would like to resolve, Lanford explains. Once understood, prepaid becomes the solution. Marketing alone can t address the issue of consumer awareness. It s about the value proposition, and how it solves consumer problems. We can talk about all the messages in the world for the consumer: This is more secure for you, This makes it easier for you, etc., but it really comes down to whether you are solving their real problems, Lanford says, adding that prepaid products should include benefits consumers want, such as loyalty or other types of reward programs. It s about consumer value proposition development, and that needs to be really strong, he says. Once you have that strong consumer value prop, then you put the right marketing messages around it, and then it s going to be really successful. Together as an industry, we need to be out there communicating all that. Different Strokes The value proposition and marketing message likely will be different depending on the country, as each region s consumers will have varying degrees of understanding of s and may want them for different reasons. You have to understand your consumer. Every one of these countries and we looked at the U.K., Italy, Poland, Germany and France has its own culture, its own nuances; its consumers behave differently, Lanford says. For example, prepaid gift cards are popular in the U.K., Germany and France (See Prepaid Card Rankings by Market at left). Prepaid Internet cards are popular in Italy and France. Travel cards are popular in

4 the U.K. and, to a lesser extent, in Germany, France and Italy. Prepaid public transportation and parking cards are relatively popular in the U.K. and France but are not in Italy. Prepaid Is Premature in Poland And then there is Poland, a country where none of the seven categories of open- and closed-loop prepaid cards studied appear to be popular. Prepaid is relatively new in Poland. It really hasn t been marketed and communicated well to the population, so when we go to [survey] consumers there, they say, Yeah, I really don t know what you re talking about, Lanford says, adding that sometimes consumers are using a, such as a transit card, but don t realize it because they aren t familiar with the term prepaid. MasterCard s study also was able to draw out more abstract characteristics of the five countries cultures, such as those pertaining to spending and budgeting tendencies. Case in point: Italians tend to be more conservative, careful to save and budget. They often use cash and are reluctant to use credit cards but will use s to control budgets, save money for pleasure or for Internet purchases. Meanwhile, consumers in the U.K. tend to be fun-oriented and focused on personal freedom, according to the study. They like to spend and use their credit cards frequently but understand We can talk about all the messages in the world but it really comes down to whether you are solving their real problems. Matt Lanford, MasterCard Worldwide the need for control given the recent economy. Germans tend to have a strong need to control finances and believe in empowering children at an early age with an ability to spend. German consumers enjoy electronic payment methods that are quite developed in the country, yet they are slow to adopt new payment innovations. Poland remains quite traditional and its consumers are more limited financially. However, consumers are eager to adopt new and trendy payment methods, the study found. While the country s older consumers still prefer cash, younger generations are adopting electronic payments quickly. Consumer behavior in France, according to Lanford and the research, appears to cover the spectrum and includes tendencies of the other four countries. Tailoring the Message It is these similarities and differences in attitudes and behaviors from country to country that highlight the importance of communicating the proper value proposition for consumers in each country. A program manager in the U.K. would not achieve the same level of success if he took the marketing message used there and employed the same message in every country across Europe. You re going to have people buy your product, but you re not going to be as successful as you can be, says Lanford. It s classic marketing. Understand who your audience is. Understand their needs, their wants and their desires. Understand the culture and build your messaging around those particular nuances of the various countries. Prepaid card companies that understand the importance of cultural differences and are eager to learn have a few options, Lanford says. He

5 Percentage of Consumers Who Own or Use Prepaid Cards More than 800 consumers were surveyed from each of the five countries, more than 4,000 consumers in total. Which of the following payment means do you own or use? Poland Germany U.K. France Italy All 5 Countries Prepaid Cards Travel Cards Youth Prepaid Card Multifunctional Prepaid Card Prepaid Gift Card Prepaid Internet Card Prepaid Public Transport/ Parking Card International Money Transfer Card source: TNS Prepaid Cards in Europe (December 2010) MasterCard recommends, not surprisingly, partnering with MasterCard. We do this type of research on a regular basis. We have teams across Europe that are in market. Program managers and issuers can definitely lean on us to understand those local market nuances, he notes. We work to build some of these marketing messages on a marketby-market basis. Barring that, the best thing is to have somebody local, Lanford says. To say you are going to fly in a bunch of cards from the U.K. and drop them in stores across Germany, it s going to be a challenge if no one knows who you are in that market, he says. You need to have some level of local presence, some level of market intelligence to be successful. Although Lanford says none of the research findings was a revelation, he says he was somewhat surprised by the diversity of thought by country. There is a clear difference in perception of s and it s really dependent on the kind of prepaid card you use. Editor s Note: MasterCard is using data from its research of the five European markets performed by TNS as a baseline for further research, according to Lanford. MasterCard is returning to the user panel to ask them some of the same questions posed in last year s study, along with additional questions, on a monthly basis to measure how thoughts might have changed Paybefore, 655 Boston Road, Unit 4a, Billerica, MA USA, Phone: , [email protected]. All rights reserved. Copyrighted material. All material contained in Paybefore publications is the property of Paybefore. Forwarding or reproduction of any kind is strictly forbidden without the express prior written consent of Paybefore. Paybefore, Paybefore.com, Paybefore Update, Paybefore Legal, Paybefore News, Paybefore News International, Paybefore Magazine, Paybefore Buyer s Guide and Paybefore Awards are the property of Paybefore. All other product and service names may be trademarks of their respective companies.