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SPECIAL REPORT: Phonecards - countering the mobile threat

SPECIAL REPORT: Phonecards - countering the mobile threat

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Published by Ralph Adam
Published in Marketing by RALPH ADAM, 09 October 2000.
Published in Marketing by RALPH ADAM, 09 October 2000.

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Published by: Ralph Adam on Oct 05, 2010
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Marketing Magazine
SPECIAL REPORT: PHONECARDS - COUNTERING THE MOBILE THREAT.Despite the widespread adoption of the mobile and the doubling of callbox charges, phonecards are holding their own
by RALPH ADAM, 09 October 2000, 12:00am
SPECIAL REPORT: PHONECARDS -COUNTERING THE MOBILE THREAT.Despite the widespread adoption of themobile and the doubling of callbox charges,phonecards are holding their own
At the end of August, British Telecom announced the doubling of charges from call boxes.According to Malcolm Newing, BT Payphones director, the hike came as result of increasingcompetition, particularly from pre-pay mobiles, and was intended to safeguard the payphoneservice's future.'The mobile phone has completely changed the way people communicate away from home or office, and now payphones are used for only six per cent of those calls,' said Newing. It'sobvious - and natural - that BT perceives the mobile telephone market as a threat, yet thesemisgivings are colouring promoters' perceptions of the promotional phonecard as an effectivemechanic.The contention centres partly on fears that the phenomenal take-up of mobiles over the pastfew years will make telephone-booth cards an irrelevance.And, as mobiles carry an increasing range of functions such as voice-mail, internet access ande-commerce capability, they are beginning to be perceived as a 'must-have', spanning allgenerations.Yet there is no evidence that the days of the phonecard are numbered; on the contrary, a 1999survey by the telecoms regulator, Oftel, into customer perceptions of competition in theinternational calling market, found 64 per cent awareness of phonecards. While mobile phones are seen as sexy, cards have become an everyday essential. The two can and do co-exist, meeting different needs, and the general consensus is that phonecards provideconvenience, and a perception of value.According to John Hart, sales manager at phonecard manufacturer Nitecrest: 'The phonecardmarket is going from strength to strength, not just here but also in the US, where volume isrising all the time.'
Factors behind this increase in volume are largely practical - phonecards can eliminate theneed for coins when abroad, overcome expensive hotel phone rates and they can even be usedas an alternative to 'roaming' charges for mobiles.
Important marketing tool
And according to Fred Parker, chief executive of Telecard UK, BT's new charges are morethan likely to backfire and will make phonecards even better value as a promotional tool.Certainly they have been an important marketing tool since the first promotional card, whichadvertised a Paris hotel, appeared in 1978. Since then, both the technology and design haveimproved greatly. There is now a wide range of added-value features which can beincorporated into phonecards, and shape and visuals are limited only by the imagination.And, unlike many promotional items, a phonecard has a long life - the number of telephoneminutes offered may be small (though too few minutes may not be a sufficient incentive), butthe card itself is often collected and retained. If the branding is right, the card won't be thrownaway and it will continue working for years after its issue.Within this strong collector's market, thematic images becoming increasingly important. Acopy of the aforementioned French card was recently auctioned for a four-figure sum, but thiswas based on its rarity and the idea of it being a 'first'.In general, collectors prefer strong images and some themes seem to have unlimited interest:anything with a mention of Coca-Cola, for example.Other brands, such as Shell, also attract a lot of interest, as do pictures of planes, trains or  birds of prey. Well-known licensed characters, such as those from Disney films, are also amajor draw - one which BT was quick to capitalise on.And their use has become more innovative. Parker says Telecard UK has commissioned anartist to create special sets of phonecards with the theme Visions of Africa - one of the sets isa promotional souvenir for SPIN. Telecard UK has also created several cards that promotemore intimate forms of communication, such as cards for Labatt's Ice Beer which hasmessages such as 'Please phone me, I may need warming up!' with space for the user to writehis or her phone number before handing it over. And a similar card was produced as a give-away for the film Cruel Intentions.Another company which has managed to merge the promotional, retail and collectors'markets is Excel Impact. The BBC has granted the company its first-ever phonecard licenceafter signing a multi-year, pan-European agreement. The company plans to bring out a seriesof six collectable cards featuring images from the BBC series Walking with Dinosaurs. ExcelImpact has also created a promotion for Blockbuster and pizza-flavoured Pringles - whichreinforces the link between snacks and movies.
Interactive voice response
Another of Excel Impact's licensed cards, a Coca-Cola bottle with an IVR (interactive voiceresponse) message which reproduces the sound of a can or bottle of Coke being opened, wonthis year's Phonecard of the Year award in Miami.Once a card has reached the collectors' market, it will change hands many times, giving a promotion extra impact. David Teasdale, Excel Impact's chairman says: 'The combination of  phonecards and licensed characters can prove irresistible when effectively deployed. But itgoes without saying that you have to meet the client's promotional aims.'In some countries, designers have allowed their imagination free rein in creating cards.Lenticular (moving image) and 3-D designs are now par for the course, and cards with morethan one application - key-rings, fridge magnets and necklaces, for example - are becoming popular. Perfumed, and even edible, cards are currently under test.As well as fancy shapes, sounds and smells, there are many technical features such asinteractive voice overs, auto-dial facilities (which give press-button access to a client'scustomer services or sales number), interactive games, prize promotions, and other forms of data capture-led activities. Cards have also been used to activate pre-paid mobiles (giving thelie to the theory that mobiles will kill off phonecards) and to drive users to specific websites.For some people, dialling two long numbers is a disincentive. BT's new Phonecard Plus triesto overcome this problem. It is a remote-memory card with the numbers held on a chip, so itcan either be used in the conventional way from home or the office, or bridge technologiesand be inserted into a BT payphone.Phonecards have become an everyday product with huge potential and those who see their value as a promotional medium have a highly effective tool for brand-building andrecognition. The last word goes to Nitecrest's Hart: 'Phonecards have an unlimited future: Ican't see an end to it.”
: Many operators are allowed to use short dialling codes for freephone numbers (four-digits) to make users' lives easier.- France Telecom, and its commercial subsidiary Regie-T, have been more aggressivetowards newcomers than BT. Its products include: see-through cards; promotional pre-paidmobile cards called Mobicarte; cheap remote-memory cards to fight cut-price operators.- Kertel has made auto-dial cards for retail chain FNAC) giving 200F of calls. Cards are re-chargeable and are placed over the mouthpiece, and as the user presses a button it dials intothe company. For supermarket chains Monoprix/Uniprix/ Prisunic it has made a remote-memory card, incorporating a magnetic strip that is validated at POS and can be re-chargedthrough bank-linked machines in-store. Kertel is also trialling pre-paid internet cards with theFrench post office for its Internet cafes.- Intercall made a champagne bottle-shaped card for Gosset for the millennium, and it has awell-established collectors' club.

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