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MARKETING

Promotions: Playing the 'Telecard' Hand
 

A quick look at how two organizations used telecards to build sales.
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Everyone from Burger King to the Salvation Army is giving away prepaid long-distance phone cards as a business incentive. So does that mean you should, too -- or is the "telecard" just the latest promotional fad?

"It's a fad," says Don Peppers, author of Life's a Pitch, Then You Buy, "but it's also the wave of the future as an information-based premium."

Unlike letter openers, crystal bowls, and other generic premiums, telecards require customization and planning to be effective. Below, two very different organizations explain how they have used calling cards to build sales.

Uncle Dave's Kitchen, a $3-million pasta-sauce and condiment manufacturer in South Londonderry, Vt., has used prepaid phone cards as a retail promotion. Though his products were already in supermarkets and retail stores, CEO David Lyons wanted to enter the gift market. He figured an innovative premium would be just the ticket.

"There were thousands of people approaching retailers with gift baskets," says Lyons, "but at the time, nobody was doing this." Working with SmarTel, a telecard provider, Lyons spent $1,625 up front to design and produce the first batch of cards. He sent out sales representatives armed with the customized cards to give away to retail buyers.

By Father's Day, Uncle Dave's was selling gift boxes in a dozen stores. Every dad whose kid bought him an Uncle Dave's gift box of pasta sauce, ketchup, and mustard for Father's Day last year has by now heard a message from Lyons's company, because bundled in with the sauces was a telecard. Fathers in Chicago, for instance, learned that their present was purchased at Marshall Fields, where they could buy more Uncle Dave's products. When Dad dialed in for his 10 minutes of free long-distance calling time, he heard this message: "Happy Father's Day from Uncle Dave's and Marshall Fields, and thank you for shopping."

The telecard also allows marketers to electronically update their messages. Lyons did so in time for a July 4th promotion. All in all, he spent $17,625 for the cards packaged in the gift boxes.

When New York City- based Dodger Productions put on the Broadway show How to Succeed in Business . . . last March, it wanted to be sure to play to a packed house throughout the season. The production company spent $24,000 to design, produce, and mail its own telecard, whose prerecorded message features the star of the show, Matthew Broderick. The actor's voice prompts callers to choose from a menu of marketing messages -- including recordings from the sound track, critics' reviews, and a direct connection to the group-tickets box office -- before the recipient can use the five minutes of free calling time.

Last August a card was mailed to each of the 7,500 group-sales leaders, who sell group theater tickets, to encourage them to book tourist groups for the show. Dodger Productions packaged the card inside a brochure explaining the sales incentive: the group leaders could add 250 to 500 extra free long-distance minutes to their telecards for booking a certain number of tickets. As of late October, the promotion had brought in $284,000 in ticket revenues, says Dodger Productions' Laura Matalon. The card gives the Broadway production company the added bonus of being able to track an individual salesperson's performance by the personal-identification number used to activate the telecard.

Still, like most novelty items, sales premiums lose their luster when they start to become as common as business cards. Lyons says gift-basket sales now account for 20% of his company's revenues, and he credits the telecard incentive with opening stores' doors. But, he says, "we won't continue to use the cards, because everyone else is using them now."

Last updated: Jan 1, 1996




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