10-Point Checklist for Prepaid Debit Card Marketing

Prepaid debit card adoption continues to soar. As more competitors enter the market, the role of marketing becomes increasingly important. Here’s your checklist for success.

Using analytics to drive prepaid marketing can generate portfolio growth and substantial payoff. The most advanced providers are benefiting from targeting and measurement approaches that optimize marketing return. Providers should deploy analytics specifically designed to identify households with explicit or latent product needs and deliver the message that will resonate with each.

Here is a 10-point marketing checklist to make sure you’re maximizing opportunities in the growing prepaid card category.

Analytical Tools

1. Analyze your customer base. Financial institutions have an opportunity to identify customers that are better served by prepaid and that are more profitable using such products.

2. Design a segmentation system specifically for prepaid debit acquisition. Many financial marketers believe prepaid only resonates with underbanked and unbanked paycheck-to-paycheck consumers. Not true. In reality, there are several receptive segments.

3. Pay attention to life event triggers. Changes in life situation (e.g., moving to a new area, divorce, new baby) can serve as a catalyst for prepaid adoption. Data sources are now available that provide timely information on these and other life changes.

4. Replace the ZIP+4 geographic model. Households within a ZIP+4 are not homogeneous. Tools that provide insights into needs, wallet sizes, and channel preferences are available at the individual and household level.

5. Customer retention matters. Consequently, targeting models need to identify users likely to establish direct deposit, transact heavily and fund frequently. For example, we have found new ways of identifying households that are willing to load their cards with direct deposit — a key factor in longer lifespans.

Read More: Insights Into Prepaid Card Market Yield Competitive Ammo

Compliance & Regulation

6. Consider future or retroactive regulatory scrutiny. Avoid analytical tools that are unlikely to pass OCC or CFPB audits. Pay attention to compliant data elements; they can have a powerful affect on your prepaid marketing.

Marketing Distribution Channels

7. Challenge preconceived notions regarding which marketing channels are more effective. Just be mindful that the performance of any given channel varies depending on the quality of the targeting. For example, some marketing executives believe that direct mail is ineffective for prepaid; we have results that disprove this notion.

8. Test marketing channels that can be precisely measured. Highly measurable channels such as direct mail, outbound telemarketing, and household-level online advertising allow marketers to link households receiving stimulation to the accounts they open.

Campaign Measurement

9. Replace problematic campaign metrics. Metrics like cost-per prepaid-card-acquired often don’t correlate with shareholder value. Performance should be measured using return on marketing investment (ROMI), net present value (NPV) and lifetime value (LTV) concepts.

10. Measure performance on a net-of-control basis. For instance, incremental response and account funding/usage above that of a non-stimulated control group. Not doing so inaccurately attributes baseline account acquisition to marketing activities.

Read More: Study Finds Prepaid Cards Could Replace Debit Cards

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Conclusion & Takeaways

Continually refining your analytic tools is necessary to maintain best-in-class effectiveness. This program requires constant monitoring of your targeting approach and making analytic strides in months rather than years. While this requires effort, the rewards for executional diligence are outstanding portfolio growth and exceptional returns.

Marketing departments we serve that are following the checklist above in prepaid and similar checklists for other financial product categories are enjoying high returns:

  • Prepaid – Results with a ROMI of 300%+ are possible
  • Small business – ROMI of 500%+ is being achieved by numerous banks as they gain share of deposit and loan accounts
  • Consumer deposits – ROMI of 300%+ is our target and achieveable
  • Home equity – ROMI of 350%+ is being achieved
  • Mortgage – ROMI of 500%+
  • Wealth management – ROMI of 200%

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