Tag Archives: Prepaid Card

Relationship-based Loyalty

Attracting customers is the goal of all retailers. The effort to attain this position can be costly depending on the methods employed. A study by COLLOQUY published in a recent NACS article states that the typical American household carries membership to about 29 loyalty programs, while only being active in 12 of them. What’s more, the convenience and fuel retail industry saw a 3% drop in loyalty program participation by the end of 2014. The cost of hosting a loyalty program, as well as potential additional discounting, means that some loyalty programs really do come with a premium.

The whole point of loyalty programs is to achieve customer loyalty with repeat business. Sometimes the cost of a loyalty program is worth the expense if a truly loyal customer relationship is achieved. And then sometimes, the retailer attracts a deal-seeker on one specific day, never to see that customer again. An earlier article published by NACS titled “When It Comes to Loyalty, Agree to Disagree” states that about 73% of consumers believe that loyalty programs should be a way for brands to show consumers how loyal they are to them as a customer. Many retailers think that the relationship should be the other way.

Intevacon likes loyalty too, but we have a different approach to achieving this end. We equip our customers to foster relationships with their customers. Our petroleum marketers gain exclusive loyalty by offering a fleet card at their sites. This card offers the benefit of fleet management such as driver and vehicle allocations, product restrictions, and real-time controls. User access is also available if petroleum marketers want to offer this added benefit. Special pricing is available for the petroleum marketer who wants to give his/her customers cost plus or cents per gallon discounts. Our loyalty comes with repeat business every time your customer uses his/her fleet card at your sites.

An article in PYMNTS.COM titled “Bread, Bananas and Building Better Customer Retention” describes the loyalty program cycle perfectly in this statement: “They are product shoppers – looking for a specific item on a specific day – sort of like the daily deal seeker. They may not come back, which means there is some possibility that the effort spent acquiring them may have only netted one – sometimes deeply – discounted sale.” At Intevacon, we hope that you capture the loyalty of every customer who comes through your doors. Even better, we want to help you gain the relationships that sustain both you and your customers in business.

If you want to find out more about Intevacon or talk to someone on our team, please call 678-739-4450 or email moreinfo@intevacon.com.

Finding the best deal

The recent low gas prices have made a lot of consumers happy. According to a NAC S article published this week, 91% of consumers say that the lower gas prices are good for the economy, and 95% said that the lower gas prices make it easier for them to go on vacation. This is good news for petroleum marketers, who prosper when fuel consumption increases.

Even with lower gas prices, though, consumers still want to find the best deal on fuel. A survey conducted by NACS and reported by CSP indicates that 71% of consumers said that price was the most important factor in deciding where to buy gasoline. What’s more, NACS reports that 63% of consumers were willing to drive 5 minutes out of the way to save 5 CPG, 72% were willing to pay cash, and 65% pay with cash or use a loyalty card to save money.

What are consumers doing with the money that they are saving at the pump? According to the Wall Street Journal, consumers are saving about $60 per month from lower gas prices, but these dollars are not all translated into increased discretionary spending. As stated in the PYMNTS.com article titled “Americans Pocketing Gas-Price Savings,” about 25% of the monthly savings are being spent on groceries, clothing, and fast food. Given that about 35% of gas customers claim to also go into the store to make purchases after fueling, these fuel savings may bring more consumers into the retail stores.

Intevacon offers two products that can help attract customers looking for the best deal, but even better, our solution provides a level of loyalty that keeps consumers returning to your sites. With the Intevacon fleet card, petroleum marketers can sign up businesses to fuel exclusively at their sites. To attract these customers, the petroleum marketer may choose to offer CPG discounts, cost plus pricing, or any other discount arrangement to achieve the business. With online access, all fleet users can manage their accounts and view transactions in real time.

For consumers, petroleum marketers can offer the Intevacon Prepaid Card that can be loaded and reloaded with cash (or any other method of payment). POP discounts at the pump provide the CPG discount at the time of the transaction. Given that about three quarters of the consumer population bases their selection on discount potential, this card will attract loyal customers while also increasing cash flow.

Intevacon is in business to see the petroleum marketer succeed, and we design our products to achieve this result. Our fleet cards and prepaid cards can help increase volume and keep margins high. If you want to find out more about Intevacon or talk to someone on our team, please call 678-739-4450 or email moreinfo@intevacon.com.

Building the future of relationships with technology

“Something—or rather, someone—has got to give.” This was the message in a recent CSPnet.com article that was published last week referring to the projected decline in gas consumption, which may decrease by 24% from 2014 to 2040. Businesses that grow have always known that “something has to give” in order to be successful. In the case of the convenience store industry, petroleum marketers must re-evaluate their business models to adjust to the prospect of significantly less gas demand. The petroleum industry has seen shifts like this in the past—economic downturns, environmental regulations, and war—as have other industries. One thing that we know is that our petroleum marketers are a tenacious and sharp bunch. The key is to be flexible and innovative while finding the right solution.

According to CSP, the c-store industry continues to grow in number of sites, increasing 21% over the last decade. With declining gas consumption in mind, the new thinking is that marketers will need to find other ways to improve profitability. Our favorite response to this impending dilemma was stated by Tom Robinson, CEO and president of Rotten Robbie in California: “As volumes decline, the question is: Can they decline less at your stores than competitors’ stores? You can do that by spending money on stores, trying to upgrade programs, trying to upgrade your offering, trying to use technology as a way to build connections or relationships with consumers.”

Intevacon can help with the technology and relationship piece of this debacle. Our technology provides a payment solution that builds connections and relationships with customers, while also protecting margins by reducing swipe fees. In a future where loyalty is a premium, capturing fleet business is a valuable strength. We’ll continue to develop valuable tools for our petroleum marketers to help them grow and increase profits. This is the rewarding part of our operation—we succeed when our marketers succeed.

To find out more about the Intevacon fleet card or prepaid card, call 678-739-4450 or email moreinfo@intevacon.com. We are excited about the future of the c-store industry, and we look forward to seeing how our marketers succeed.

Making the Case for Fleet and Prepaid Cards

A few weeks ago we compiled five case studies describing the success of our customers and illustrating how the Intevacon system has benefited their businesses in different ways: increasing repeat business, reducing swipe fees, capturing more diverse customers, and gaining back control of customer accounts for future growth.

Below is a featured case study highlighting an issuer using both fleet and prepaid cards. To view the complete case study series, click here. We’ve changed the names of the petroleum marketers and left out any identifiable details in each of the case studies.

CASE STUDY: GROWING PREPAID BUSINESS TO MATCH 35% OF FLEET DOLLARS

The Intevacon Prepaid card was made available in the fall of 2013, and adoption of this alternative form of payment has been growing each month. Intevacon has one customer in the southeast who has been using the Intevacon system with a consistent number of fleet users since October of 2011. Clairmont Petro Brothers offered their fleet users the benefits of online account access to the system, but they decided not to offer any special pricing.

Towards the middle of 2013, Clairmont Petro Brothers started noticing that while they were able to maintain their fleet business, a lot of cash users were going across the street to use a competitor’s prepaid card. The timing was perfect for Clairmont Petro Brothers to start using the Intevacon Prepaid card in concert with the Intevacon fleet card. Both fleet and prepaid card transactions can be accessed and managed through the same Intevacon web portal. With pricing for the Intevacon prepaid card starting at $20 per month, this was an easy decision.

Since October 2013, Clairmont Petro Brothers have focused on growing their prepaid business to the unbanked customers in their community. The convenience of offering a card that can be loaded with cash and then used at the pump or at the register is a big selling point to their customers. The prepaid card is sold for $0.50 and then it can be reloaded as many times as the customer wishes.

In the last month of transactions for Clairmont Petro Brothers, they loaded $52,000 onto prepaid cards and sold $99,048 in fleet transactions. This means that 35% of the transactions processed in the last month through Intevacon were cash payments made by loyal customers.

There are a number of reasons that fleet programs vary in robustness, but the two most common attributes of our most successful fuel marketers are:

They actively recruit fleet business.
They manage their cash flow with their invoicing so that they can self-fund larger dollar volumes.

Our goal is to help our marketers grow their business and enhance their relationships with their customers. We’d love to point you to a list of our references if you want to have a conversation with someone whose story is similar to what you read in one of our case studies.

Probability Distribution—Going after the long tail

Being the most popular choice with the average customer is a coveted spot. Popular is the low hanging fruit of a sales activity. A recent article was published by Convenience Store and Fuel News which reported that consumers prefer to fill their tanks at grocery stores and wholesalers instead of at traditional convenience stores. This can be formidable news to the average c-store operation, but it doesn’t have to be. Strategic petroleum marketers know that there are opportunities to capture repeat, loyal fleet customers.

There is a statistics term called probability distribution in which a larger share of the population rests within the tail of the power curve. See the plot below for an example. The music industry is a great example where the long tail applies. There are the top ten billboard music artists who comprise the head of the power curve, and then there are the niche artists who comprise the long tail. The niche artists create the same amount of revenue collectively as the one hit wonder billboard artists, though they may have to generate buzz one fan at a time. dpc

So how does this probability distribution translate to the convenience store industry? Think of the head of the curve as the customers who are looking for the best deal and the most convenience. It would be great to capture that customer base of business. But there is equal opportunity in the long tail. Pursue the fleet card customers who want to manage their business fueling activities through the Intevacon system. Every cardholder that you sign up with a fleet account becomes a repeat customer, often with multiple vehicles to fuel. Government accounts, commercial accounts, consumer accounts—these are all opportunities in the long tail with fleet. When high value retailers are winning on price, leverage your local relationships with a comprehensive fleet system.

The fuel landscape is shifting in the convenience store industry, but with the right business model, this shift can be viewed as an opportunity. By cutting swipe fees and introducing a proprietary fleet and prepaid card, you can grow your business and gain a valuable partner in Intevacon.

Respond instead of being Re:swiped

Swipe fees recently made another public appearance in the ne ws. Retailers have petitioned the high court to reconsider its March 2014 decision, which upheld debit card swipe fees at 21 cents per transaction as reasonable. This has been a hot topic for all retailers, with NACS being a large player representing the convenience store sector in this battle. Petroleum marketers want the limit lower than 21 cents for obvious reasons. Swipe fees—credit card and debit card—are reported as the second largest operating cost for petroleum marketers, just behind the cost of labor.¹

The legal battle with swipe fees has been centered on the Dodd-Frank law passed in 2010 regarding debit card fees. The overall battle with swipe fees, however, encompasses more than just debit card swipe fees. Credit card fees were about 7 cents per gallon in 2011, averaging about 2% per transaction.¹ PayPal has an even higher rate starting at 2.9% plus $0.30 per transaction.²

Margins on petroleum in this industry are already small, so any percentage “swiped” by credit card processors has a big impact to petroleum marketer operations. Mastercard and Visa have been named in the current swipe fee lawsuit, but they are by no means the only card processors in the gouging game. Nearly three quarters of all transactions made at the pump are made with plastic—think about how that equates in total swipe fees.³

Intevacon is a proprietary card processor but we offer more services to the petroleum marketer than the standard credit card company. More important to your bottom line, our pricing lets the petroleum marketer keep his/her margins. Convert one of your current Mastercard or Visa customers to a local house account and automate the process through Intevacon. We offer an online system that empowers the petroleum marketer with all of the controls needed to manage and grow his/her fleet accounts. We also provide the petroleum marketer an advantage to capture loyal fleet accounts by offering the option of online access to the cardholder. Intevacon succeeds when our customers succeed.

Converting cardholders who currently pay with a standard credit card or debit card to the Intevacon fleet card or prepaid card reaps huge savings every month. If a petroleum marketer converted $1.5 million of his current monthly business to the Intevacon fleet card, the savings from a standard credit card transaction fee of 2% would be approximately $340,200 a year or $1.36 million over four years. The higher the dollar volume on the Intevacon fleet card, the greater the savings from swipe fees. Supplement the fleet card with the prepaid card to get even higher returns and increase cash flow.

Swipe fees may be a necessary evil for a certain percentage of fueling customers, but there is a large cohort of cardholders who would benefit from the advantages of carrying a fleet card. Get to know your customer base and grow your business with Intevacon.

“Credit and Debit Card Fees.” NACS. Web. April 2014. http://www.nacsonline.com/Research/FactSheets/IndustryIssues/Pages/CreditCardFeesaGrowingChallengeforConvenienceStores.aspx
Paypal. Web. June 2014. https://www.paypal.com/webapps/mpp/paypal-fees
“2013 Retail Fuels Report.” NACS. 2013. Web. May 2014. http://www.nacsonline.com/YourBusiness/FuelsReports/GasPrices_2013/Documents/CFR2013_FullReport.pdf

Changing Business Models: Learning to be Flexible

“One cannot alter a condition with the same mindset that created it in the first place.” -Albert Einstein

In today’s fast-moving society, businesses must adjust their business models or face the risk of obsolescence. Western corporations are especially susceptible to relying on the methods that they instituted decades ago with a hope and a prayer that the economy will act in their favor. We still remember the luxury of big budgets, long timelines, and a structured approach to innovation. The 21^st century, however, requires more of us. Corporations today succeed when they act fast, remain flexible, and manage frugally.

There is a lot of opportunity in our futures, and we can learn from the mistakes of corporations that have fallen away. Kodak was a pioneer in the film industry, but it failed to compete in the digital world. Barnes and Noble did not alter from their brick and mortar stores, hardly competition for the likes of Amazon. Entire industries have been trying to master the perplexity of marrying changing times with dinosaur innovation and operating methods. Big Pharma continues to increase the cost of R&D while producing fewer drugs. The auto industry required a bailout of the US government in 2008 in the amount of $62 billion, yet even with this second chance, they are still flagging against their foreign competitors. These bureaucratic, slow-moving business models are proving again and again to be unsustainable.

Hindsight is always 20/20, but there is much to be said of a proactive and flexible approach to growth moving forward. The convenience store industry has made great efforts to stay relevant in the retail space. Fresh, healthy foods are a new staple, complemented by every variety and flavor of coffee. Convenience is more of a premium than ever before, and petroleum marketers are meeting this demand with more products, cleaner facilities, and increased services. Social media is even being adopted as a way to stay connected to customers.

One area of change that directly affects petroleum marketers is that of the payment space. PCI, EMV, Chip and Card—the requirements keep changing and the fees and costs keep increasing. With credit card fees being the second highest expense to a petroleum marketer, Intevacon can offer a new approach to the payments game. There are several advantages in using Intevacon for your card processing. Our low rates are a good start when it comes to protecting your margins. Plus, our system keeps you in control and helps you manage your relationships to your cardholders. By offering your own proprietary card, you can increase the loyalty of repeat customers.

Intevacon continues to innovate and improve our business model. When we were founded, we made the decision to leave all of the legacy systems of fleet cards in the past. Intevacon is completely web-based, and we process card transactions in real time. The system is continually being improved as our R&D department functions in collaboration with our customers. In 2013, we introduced the Intevacon Prepaid Card to meet the emerging needs of our customer’s cardholders. Currently, we are developing the Intevacon Fuel Network to help link petroleum marketers across the nation and equip them to make their own business decisions.

In a world where technology changes so rapidly and information is abundant, it can be difficult to know which direction to dedicate resources. There is a Hindi word, jugaad, which translates ‘an innovative fix; an improvised solution born from ingenuity and cleverness.’¹While the U.S. is blessed with an advanced society, there is merit in evaluating the flexible practices being espoused by emerging markets that are forced to innovate out of necessity. Sometimes the best solutions are those that challenge our business models to shed the institutional constraints to which we have become accustomed. A flexible system with margin is much more likely to thrive in times of change.

1. Radjou, Navi, et al. Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth. San Francisco: Jossey-Bass, 2012. Print.

Challenging Tradition: Alternative Payment Solutions

For as long as consumers have shopped, merchants have provided payment solutions. Whether it was through a barter system when money got tight or during the advent of the credit card, both buyers and sellers have gravitated to the most economical and efficient payment methods at hand. That is why this season of payment solutions is so fascinating. The trends are definitely shifting, and consumers are choosing with their wallets, literally in this case. Merchants are also seeking solutions that protect their bottom lines.

Intevacon offers a unique payment solution focused exclusively on the oil marketer—we created this system for the marketer, and our business model is built for his/her benefit. As a card processor, Intevacon provides all levels of card processing data—transaction details, quantities, taxes, product codes, etc.—without having to involve the middlemen.

Think of the traditional credit card processor. When you think of this credit card processor, you also have to think of all of the other players involved—the banks (both the cardholder and the merchant bank), the issuer of the card, the acquirer, etc. Credit card fees continue to increase as each player takes a piece of the pie. With margins for fuel counted in pennies, this cut is noticeable to a marketer. Not only does the marketer sacrifice his/her margin to processing fees, but he/she also loses the relationship to the cardholder.

We have seen traditional banks fall out of vogue more and more in time. An article in CSP News titled “Blowing Up the Bank” starts with the line “The banking system today is going to be totally blown up in the next 10 years.”¹ Alternative banking and payment solutions are the way of the future. Another article corroborating this claim quotes the research firm, Packaged Facts, saying that approximately 40% of adults 18 years or older are unbanked.² With this trend, we will continue seeing a shift away from traditional banking to “non-bank” funding accounts and reloadable prepaid cards.

Several non-traditional players have emerged, amongst them: Google, Paypal, and Amazon. We are excited for this new landscape of payment solutions, as it challenges the status quo and gives both consumers and merchants new options. When considering how you will choose to conduct business, consider your partners carefully. An article recently published in Forbes about the future of mobile payments stated, “Whoever ends up with controlling interests in this new digital ecosystem will reap billions in transaction fees, collect massive amounts of consumer data […].”³

Intevacon’s focus is to provide card processing services to our marketers so that you will be able to grow and protect your margins. Your success is our success. With Intevacon, you will always be in the center of your relationship with your customer. We are transparent and generous with our pricing model, and we offer the best customer service in the industry. Give us a call if you want to learn more about adopting a proprietary fleet card program through Intevacon. Now is the time to take back control of the transactions you are working so hard to achieve.

Contact us at 678-739-4450 or moreinfo@intevacon.com to get more information. http://www.Intevacon.com

“Blowing Up the Bank.” CSP. April 2014. Web. April 2014. http://www.cspnet.com/industry-news-analysis/technology/articles/blowing-bank
“General Merchandise: Prepaid & Financial Services 2014.” CSP. April 2014. Web. April 2014. http://www.cspnet.com/print/csp-magazine/article/general-merchandise-prepaid-financial-services-2014?page=0%2C0&utm_source=SilverpopMailing&utm_medium=email&utm_campaign=Daily%20News%2004-28-2014%20%281%29&utm_content=&spMailingID=45724913&spUserID=MjU0MDQ1OTk0MjkS1&spJobID=423296958&spReportId=NDIzMjk2OTU4S0
“Can PayPal Beat Apple, Google, Amazon And Icahn In The Wallet Wars?” Forbes. March 2014. Web. March 2014.http://www.forbes.com/sites/stevenbertoni/2014/02/12/can-paypal-beat-apple-google-amazon-and-icahn-in-the-wallet-wars/

Building Relationships and Profiting from Repeat Business

Intevacon is all about relationships —we value the relationships that we form with our marketers, and we do everything that we can to facilitate relationships between you and your customers. The Intevacon model puts the marketer directly in the center of the card processing relationship, and this is by design. It turns out that this is also a profitable approach.

A joint study by Manta and BIA/Kelsey found that 61% of small business owners report that half of their annual revenue comes from repeat customers. It also notes that repeat customers spend 67% more than a new customer. Watching this trend, small business owners are starting to invest more resources into developing relationships with their existing customer base.

Are you growing a base of repeat customers? An article by MediaPost notes that many small business owners do not utilize technology to their advantage when it comes to building loyalty and repeat business.

We know that c-stores account for 34.3% of all retail outlets as of December 2013, according to NACS. A recent NPD study found that the average consumer visits a c-store six times in a 30-day period, but that number has decreased by 1.3% in the fourth quarter of 2013. An article in Convenience Store Decisions quotes an NPD convenience store industry analyst saying, “It will remain a challenging and competitive environment in 2014 and retailers will continue to fight for dollars. C-stores can hold on to their base with the right product mix, selection, and quality, all of which are growing reasons why consumers choose the stores they do.”

The Intevacon fleet card and prepaid card are valuable tools to help you maintain repeat visits from your customers, both with consumer and commercial accounts. The proprietary fleet card and prepaid card can be accepted at all of your sites and allows your customers to receive level 3 card processing data. To help manage your accounts, you can give your cardholders access to the system to see their own data and run reports. The Intevacon system is intuitively designed and it gives you all of the controls that your customers want to manage their fleet accounts. With the time saved by using our system, you will have time to turn more new customer business into repeat customer business. Protect your margins by saving yourself from swipe fees, and increase repeat business by providing a fleet or prepaid card.

Prepaid trends more and more attractive to consumers

Intevacon introduced the Prepaid card in the fall of 2013, and we have since established a growing base of customers selling the Prepaid card at their stores. A few of our customers even sell the Prepaid card as both a gift card and as a reloadable prepaid card, with different perks and payment requirements associated with each. There are many recent articles that have been published discussing consumer trends toward the prepaid card. We thought we would highlight a few so you can start thinking of ways to market your prepaid card.

1. An article published last month by Oil Express called “Trends: Debit card use hits new low” describes how trends are declining away from the use of debit cards and increasing in the use of Prepaid cards, especially among young adults. Bank fees and the federal debit card reform activities contribute largely to the dissatisfaction. You can find a discussion of the trends away from banking institutions in a blog here. With this continued increase in the acceptance of prepaid cards and consumer trends away from banking institutions, the timing could not be better to introduce the Intevacon Prepaid Card.

2. An article by ATM Marketplace called “More Americans using cash to avoid data theft” noted that the recent data breaches have motivated consumers to use cash more often. Calling it the “revival in payment with cash,” the following statistics were provided:

40 percent of those aware of any data breaches said they’d started using cash for more of their purchases when shopping;

43 percent of those aged 18–34 said they’re using more cash; and

45 percent of those aged 35–44 said they’re using more cash.

The Intevacon prepaid card allows the perks of using cash while also offering the convenience of a card. Card holders can use their card at the pump and then reload it at the register. This allows you, the marketer, to increase cash flow and eliminate swipe fees.

3. In line with targeting specific age groups, a recent article by Convenience Store News titled “Millennials & C-stores: The Perfect Fit?” notes that about 75% of Millennials (those born after 1980) shop at convenience stores at least once a week, up from the 68% of total respondents. The number one reason cited by Millennials to shop at convenience stores is to buy beverages, followed secondly by the need to buy gas. Millennials also fulfill their impulses with purchases such as prepared food and health and beauty products. Read our earlier blog here about how Millennials are quickly adopting prepaid cards as a preferred method of payment. Millennials appear to be the ideal candidates to target with a prepaid card.

Let us know if you would like to find out more about our prepaid card or speak to one of our successful prepaid marketers.

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Leading the Industry in Fleet Card Solutions