How to run a successful Gift Card Programme in Emerging Markets 

By Julie Leblan - Chief Executive Officer - Merit Incentives

“Every new concept first comes to the mind with a judgement” Charles Sanders Peirce

 Introducing a new concept into a mature market is always challenging as it is a combination of timing, communication, implementation… and luck. People will say “no” before looking at the solution and this is where passion and 100% true belief in your product is key to success. You can’t sell something if you don’t believe in it.

Launching in emerging markets presents unique and separate barriers to entry but it’s these markets that we have been focusing more on as a business. We have taken all we have learnt elsewhere and applied an almost layer of simplicity to assure customers that perceived barriers can be overcome with our expertise.

The approach we have been taking at Merit with emerging markets has been defined by 5 key rules. It’s easy to assume that technology barriers will automatically be a major challenge but our experience is that this isn’t necessarily the case: we cannot pigeonhole all emerging markets into the same perceived low-tech infrastructure group.

Firstly, ANALYSE KEY GIFT CARD SUCCESS METRICS to determine the best solution proposal. These metrics will decide what will work and what will cause you and customers pain in the years to come. What’s the internet penetration rate? What proportion of the country have smartphones? For redemption, what percentage of stores have adequate wifi to enable fuss-free use of digital gift cards?

A recent project in Egypt with a population of nearly 100 million showed us that less than 30% have access to a smartphone. This shifted our approach massively towards recommending an SMS-based redemption solution for digital gift cards. Whilst this has cost disadvantages tied to the overall solution, it overcame a significant barrier in wider adoption and uptake.

EXPECT TO HAVE TO EDUCATE! Gift card penetration rates average just over 50% in mature markets. In emerging markets we have discovered broadly 2 groups: Those who are aware of them, either through limited exposure in major cities or having seen them when travelling abroad and those who have never used them, never seen them even and consider there are cultural incompatibilities to the local tradition of gifting.

This is made far more complex because within each of these 2 groups you will have both merchants AND customers. We have carried out merchant training sessions, customer and merchant surveys and have even extended our remit to take our knowledge of the gift card market and translate it in to customer and merchant marketing campaigns utilising available marketing channels to grow awareness. It’s even been possible to incentivise early advocates in to helping spread positive messages about gift cards in some countries

EXPECT TO HAVE TO PROVIDE SIGNIFICANT SUPPORT. This isn’t about dropping in a solution and then letting it run itself. We have to stay with it, nurture it through it’s inception and adoption stages and provide country and culture specific support. In Arabic territories we work in, storytelling is part of Arab culture. As well as providing merchant training materials – converted from actual reading material to online videos – we have set up dedicated bilingual helplines allowing merchants to talk to our agents at any time to support the learning curve.

BE AGILE TO BE SCALABLE AT SPEED. Growth in emerging markets can be painfully slow but can quickly take off at speed due to a lack of competition and rapid uptake as brands realize the commercial benefits of the gift card market, merchants become experts in selling and accepting cards and customers see that they’re a great alternative to traditional ways of gifting.

My last recommendation is BE CREATIVE IN ANTICIPATING THE LOCAL TECHNOLOGY LEGACY & FRAMEWORK. Overcoming IT legacy and the likely absence of major cloud players with local data centers may be challenging to scale your solution rapidly while adopting a cost optimization strategy such as a SaaS model. Don’t assume and always have a simple, low-tech solution available to deploy.

The conclusion? Understand local cultures, understand the legacy technology infrastructure, expect resistance and be agile.

 

 

Photo by cottonbro from Pexels

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