Card Design, Customer Experience Key to Reducing GPR Churn (March 6, 2013)
March 6, 2013
As GPR card providers seek to develop long-term cardholder relationships, a panel of industry experts at the Prepaid Expo USA in Orlando, Fla., discussed strategies of dealing with one of the prepaid industry’s biggest hurdles—reducing customer churn.
The lifespan of a typical GPR card is a short one; cards distributed online average only six months of usage, while retail-distributed cards have an average lifespan of just two months, according to research from MasterCard. Keith Brand, division vice president, financial services and innovation for Sears Holdings, espoused the importance of what he called “aspirational design,” meaning a product a cardholder is proud to take out of their wallet. Sears-owned retailer Kmart offers a MasterCard-branded GPR card known as Halogen, which is essentially indistinguishable at a glance from a regular credit or debit card, Brand said—a departure from the retailer’s previous prepaid card, which featured a prominent Kmart logo. “Since we’ve launched the card, not only have sales [on the card] gone way up versus the old Kmart card, but people are staying on longer.” A limited fee structure and generous rewards programs are also vital to staying in the customer’s good graces, Brand added.
While direct deposit remains the holy grail of encouraging retention, there are other strategies to enhance retention. Sarika Abbi, director of ideation with the nonprofit financial services provider D2D Fund, noted that her company developed a GPR product for underbanked consumers that features an optional linked savings account. Since the card’s November 2011 launch through the end of 2012, Abbi said, 5,600 cardholders had opted into the savings option, depositing more than $7.4 million.
Overall, it all comes down to a customer’s experience with a card, said panelist Justin Lemrow, director of continuous improvement practice with customer service provider Contact Solutions. “Good customer experience establishes trust,” Lemrow said, “and trust builds loyalty. If every time someone reaches out to your brand they have a good experience, they are more likely to stay with you.”