I was asked to write an article recently on the reason retailers should consider phonecards given our experience serving more than 1,000 retailers with our eziPass phonecard vending platform. Here is the article which was published last month in Convenience World:

Phonecards present excellent basket-building opportunities for convenience businesses. Too often, however, the opportunities are overlooked in favour of mobile phone top-up revenue.

Just about every customer presenting at the counter could benefit from a phonecard to cut the cost of their calls interstate or overseas. Too often, convenience stores and newsagencies miss these opportunities because there is no call to action.

Thanks to Point of Sale integration, selling phonecards is easier now, removing one barrier to achieving greater sales. From every register, within the point of sale software, you are able to sell many different phonecards quickly and without the need to carry physical store or the need to use a separate terminal.

Here are some reasons to consider engaging with the phonecard opportunity

  • Easy to pitch. Most people call others interstate and overseas. Most people like saving money.
  • Good margin. The margin on phonecards can be as high as 30%.
  • Excellent for cash flow. You only pay for what you sell once you have sold it.
  • Value add. Through simple training your staff can identify good sales prospects and make the pitch – easily lifting a drink or snack sale to something more valuable.
  • Destination opportunity. By promoting range and speed of selling, you can become known as the go-to phonecard retailer in your area.
  • Easy passive pitch. Posters in the window, a counter mat or a wobbler on the register – each of these passive pitches can work to drive sales.

The word phonecard can be offputting to some retailers as there are not necessarily cards involved – most can be sold as vouchers produced by the point of sale software. This means that no stock is required – reduced theft opportunity and more cash-flow friendly.

Retailers using this point of sale software integrated method of selling phonecards are finding it easier to pitch the products to customers as an impulse purchase – for personal use or for a gift.

There are several target customer groups for phonecards, each can be as valuable as the other. Understanding these customer opportunities is key to driving sales.

The tourist / backpacker. This is a big market yet remains often untapped by retailers. Backpacker hostels and many tourist locations sell phonecards to this market. Retailers can make the pitch by identifying the customer and by promoting phonecards near items they are likely to purchase – such as maps. The pitch itself is about saving money.

The migrant. This is also a big market – and easily tapped. Promote phonecards to popular overseas countries near foreign language newspapers if you sell them or next to Western Union if you offer the money transfer service. Train your staff to conversationally pitch phonecards – calls using phone cards will save your customers money when calling relatives and friends overseas.

The gift giver. If someone buys a greeting card and is unsure what to give as a gift, suggest a phonecards. Everyone has friends overseas or in the country – a phone card will give then a gift of conversation. This is a harder pitch to get right as phonecards are often not thought of as gifts.

The keys to making good money from phonecards is to make the selling fast and easy, offer phonecards from reliable providers, train your staff in fast selling techniques and being proactive in promoting the category in-store.

By engaging with phonecards retailers can turn them from a poor-cousin into a hero product which generates good sales with a healthy margin and for little of the risk of usual products in convenience stores and newsagencies.

The Australian phonecard marketplace is worth more than $200 million a year in retail sales. This alone is reason for retailers to engage.

Key to success with phonecards is understanding the various products in the marketplace.  This task is made more difficult by a vendor who spends too much time and money telling you that they have the best products.  What they claim is the best choice may not always the best choice, especially if they fail to back their offer in the long term.