CARDSAVER: MARKETING YOUR PRODUCTS

The methods by which to market your calling cards will differ from location to location.


Selling through Retail Stores

In areas that are highly dominated by minorities, there tends to be a great deal of competition in the phone card business. However, competition does not mean there is no money to be made. Be sure to read the section in this document entitled “Competition Pricing (The Hidden Fees).” Most customers in these minority-dominated areas tend to buy phone cards from local ethnic retail shops. Usually, these stores are willing to carry new phone cards if they feel they can make money with it. Retail stores generally buy cards at about 75% of the face value of the card. For example, if you have a card that has a face value of $5.00, the retailer will pay you $3.75.


Areas that have a large number of international and business travelers tend to be more profitable for phone card companies than minority-dominated areas. Retail stores in these areas tend to take higher commissions, however, the profit margins are also much higher (see the section of this document entitled “Set Different Rates for Different Customers”). Retail stores in these areas will usually pay less than 75% of face value for phone cards.


Selling through a Distributor

Many phone card companies prefer not to sell directly to retail stores, but rather prefer to sell cards through a distributor. Phone card distributors usually distribute more than one brand of card and usually have an established relationship with the local retail stores. Selling through a distributor is the best way to sell a high volume of cards, however, there is a price to pay for this convenience. After paying the distributor and the retail store, you should expect to receive less than 70% of the face value of your card. Also, distributors usually do not pay you up front for your cards; they only pay after they get paid.


Selling Prepaid Services at an Internet Cafe

Internet cafes are ideal locations to sell prepaid calling services. There is no need to purchase PSTN lines from the phone company, and the Internet infrastructure is already in place. Also, customers do not require a physical calling card, so there is no need to print any cards. Customers that are already using the Internet services will be aware that they now can make international calls from the same location.


Selling through the Internet

Over the past couple of years, Internet phone card sales have increased tremendously. The Internet makes it convenient for customers to purchase and recharge cards. There are, of course, advantages and disadvantages to choosing this method of distribution:


ADVANTAGES

  • Very convenient for customers.
  • Customers can view their balances and statements online
  • Avoid distribution fees by allowing customers to recharge online
  • No card printing charge – system automatically emails PIN
  • If a customer is satisfied, it is easy for him to refer a friend
  • Easy to market the product internationally

DISADVANTAGES

  • Difficult to obtain a merchant account if you are only selling phone cards
  • Credit card merchant fees
  • Higher probability of fraud online
  • Many people that buy phone cards do not have a credit card
  • Many people that buy phone cards do not have Internet at home

Selling to Existing Customers

In any business, there is no customer like your own customer. If a customer is satisfied with the quality of your service, chances are that you can convince him to buy from your company again. On the back of every card and in every email that you send to a customer, it is essential that you offer recharge capabilities. Recharge capabilities increase your profit margin by removing the distributor from the picture.
PEC offers customers two solutions to allow recharging capabilities. The first is via the web, and the second is via the telephone. Customers can use their credit cards to recharge their accounts instantly.