P-O-P & Telecommunications

Information superhighway fantasies run rampant in the media these days. The experts say that computers, telephones and cable TV will fiberoptically link our credit cards, bank accounts and social security numbers. The dollar bill may become obsolete. Put the Home Shopping Channel on the Internet, and we may never have to leave the couch.But isn't it ironic: As they build this brave, new interactive world, a lot of telecommunications companies are turning to fundamental P-O-P techniques to market their services.For years, specialty stores have used displays to sell the basic hardware of this new wireless age -- cellular phones, pagers and caller ID units. But now a number of telecommunications carriers are beginning to use P-O-P to push something more intangible: support service. From counter cards that tout call-forwarding services to kiosks that dispense prepaid calling cards, the communications industry suddenly seems to have discovered the value of displays in its marketing efforts.A Baby Bell Rings Up P-O-PPart of this trend is a result of phone industry deregulation. As the "Baby Bells" face countless new competitors, all are hustling for customers like never before. In what is considered a first by a major carrier, the consumer services unit of Ameritech, the largest provider of phone service in the Midwest, began using P-O-P displays in 1994. The company ran several campaigns that employed in-store signage to promote phone usage as well as the purchase of special phone services."Our approach has been to use integrated marketing vehicles -- print, television, radio -- so we can hit customers in different ways and at different times with the same message," says Linda Alperin, senior marketing communications manager. "The success of this program really expanded our definition of integration."The first use of P-O-P surfaced last Christmas. Ameritech, based in Hoffman Estates, Ill., ran a monthlong "Greeting Call" campaign in the card departments of 2,300 supermarkets, 910 drug stores and 100 gift/card stores. The stores were located throughout Ameritech's five-state region: Illinois, Indiana, Michigan, Ohio and Wisconsin. The company worked with Flair Communications Agency Inc., Chicago, which designed and printed counter cards, standees measuring 18 inches wide by 42 inches high and take-one coupon pads. The displays told shoppers to personalize their holiday card messages by placing a phone call.Free "Give Me a Call!" stickers, which customers could apply to the cards, were distributed through the card/gift stores. Shelf talker signs from Actmedia Inc., Norwalk, Conn., were added to the mix in the five largest urban markets.Ameritech followed up with a similar campaign for Valentine's Day. New standees were designed, each carrying a tear-off pad promoting a special 976-GREET service that sends musical phone messages to loved ones."These first programs made sense because we were referencing a consumer packaged good -- the greeting card," says Alperin. "What better place to promote our message than in the greeting card aisle? But the feedback was so positive that we realized that there are other products that we offer, such as second lines, that complement electronics products."In March, Ameritech ran a joint promotion with 400 Radio Shack stores to promote the installation of additional phone lines. Counter cards and mobiles touted Ameritech discounts on installation, while Radio Shack offered special prices on two-line phones, modems and fax machines -- devices that work more efficiently with an extra phone line. Ameritech also sent 7 million notices about the promotion to customers through monthly bill inserts.The most recent campaign, called "Designed Around You," ran in the electronics departments of 400 chain stores including Sears Brand Central, Kmart, Silo and Fretter. The campaign touted a variety of services including repeat dialing, call forwarding, caller ID, voice mail and inside-wiring repair insurance. The company placed standees that measure 24 inches wide by 48 inches high. Each include tear-off, fold-out brochures that have six pages of services and features that customers can add. In-store radio messages were also used in some Venture stores, directing customers to the displays.Alperin says that with Ameritech's integrated approach to marketing, it is difficult to pinpoint exactly how much a promotional device adds to a campaign's success. "But we know that this program was far more successful than past programs that didn't have a P-O-P vehicle," she says. "Going forward, we plan to make it part of our promotions."It doesn't work for everything, but it definitely works for the products and services we offer that complement merchandise sold through retail outlets. We'll always look for that opportunity when we do our campaigns."Techno-collectiblesThe biggest growth potential, according to some experts, is in the prepaid phone card or telecard market. In Europe, South America and Asia, callers commonly use these cards in lieu of coins at public phones. Overseas, these cards typically have magnetic strips that interface with a card reader on the pay phone itself, automatically tracking how much calling time remains.The cards also became the first "techno-collectible" of the 1990s. Originally just imprinted with the various carriers' corporate logos, the cards are now adorned with everything from pictures of movie stars to advertisements. According to TeleCard World magazine, global sales of phone cards reached $4.3 billion in 1993.The United States has been slow to catch on. Here, a pay phone with a magnetic card reader is still a rarity, so domestic phone-card users usually must place their calls through services. In 1993, domestic prepaid phone-card sales were a mere $50 million. However, many industry experts predict that this figure could increase by as much as tenfold this year.One reason is more aggressive marketing. An industry leader is Detroit-based TLC (also known as The Long-distance Co.), which sells its PhoneCash cards through stores in the Midwest. Competitors typically offer cards packaged in plain-paper wrapping for sale from under retail counters. But TLC emphasized merchandising when it rolled out its prepaid cards in late 1993, according to Doug Dely, marketing/advertising manager.The company's P-O-P arsenal includes a four-color counter display that measures 12 inches wide and 16 inches high. It has two plastic peg hooks that hold 12 products, usually cards in $5 and $10 amounts. The biggest display is a nine-hook, chipboard floorstand, measuring 24 inches wide by 48 inches tall, that is designed for center and end aisles. The company also offers strip merchandising holders, a 24-card shipper packed with two header cards and a door/window decal, and a series of store posters in both English and Spanish."Some retailers just put the displays out and have reported no theft problems," Dely says. "Others have placed dummy or sample [no cash value] packages on the displays. The customer can then exchange it for the real item at checkouts. Other retailers use the clip-strip merchandisers behind the counters. These are particularly popular near lottery displays."The company had revenues of $70,000 from PhoneCash in 1993. This year, according to Grain's Detroit Business, the company is projected to generate $1.8 million from card sales alone.Dely says employees designed and built the first runs of P-O-P materials themselves. Working from the company's Detroit plant, TLC produced displays in quantities that were in the low hundreds. However, Dely says that due to the high acceptance of the concept, the company recently began negotiations with P-O-P suppliers. They will take over the account, he says, and mass produce corrugated displays.At retail, the cards appeal to teenagers, college students, immigrants and migrant workers who possess neither checking accounts nor credit cards. Many of these individuals operate on a cash-only basis and need a convenient way to use phone services.One industry giant, Sprint Communications, has been active in the retail market as well. To sell its Instant Foncards, the company has installed metal dispensing boxes behind the counters in more than 2,500 retail locations, mostly convenience stores. Arshad Carim, manager of prepaid card marketing for Sprint TeleMedia division, Overland Park, Kan., says the dispensers have four slots for all four of its denominations -- $5, $10, $20 and $50 cards. The clerk simply takes the card out and hands it to the customer.Sprint is now taking the business one step further. It is testing a prototype self-service kiosk in 30 high-volume stores ranging from supermarkets to mass merchants. The test, which is being conducted in markets across the country, uses prototype units built by Dinaco Inc., Irvington, N.Y. The kiosk is 18 inches wide by 66 inches tall.At the same time, prepaid phone cards are becoming popular giveaway items for brand marketers. Sprint not only sells the cards at retail, but administers private label programs for other marketers, most notably the NBC television network. This fall, NBC gave away pre-paid phone cards printed with pictures of its stars, such as Bill Cosby, in a sweepstakes promotion.Other marketers are following suit. Smith Corona Corp., New Canaan, Conn., is placing "Call On Smith Corona" displays in mass merchants, office supply stores and other retailers for this year's holiday shopping season. The displays instruct shoppers that they can receive a 30- or 15-minute calling card with the purchase of a word processor, fax machine or typewriter. The displays, which were designed by Williams & Co., Chester, Conn., and printed by Canfield & Tack, Rochester, N.Y., have take-one coupons that buyers send in for the cards.Madison, N.J.-based Whitehall Laboratories, makers of the ClearBlue Easy Home Pregnancy Test, placed five-minute phone cards in 150,000 packages last summer so customers could share their good news. Other companies using variations on this idea include Hallmark Cards, Kansas City, Mo.; Ryder Truck Rental, Miami; and Fuji Photo Film USA, Elmsford, N.Y. "You're going to see big increases in both promotional uses and retail sales of these cards in the future," says Carim.Rewarding RetailersGrowing interest among mass merchants in electronic product categories traditionally left to the specialty stores is shaking up the market. "The idea right now is to get into the big chains," says Rusty Bennett, vice president of sales at Positive Communications Inc., a wholesale provider of paging products. "And we have to look at the display as the primary focus of the selling effort. To take a salesperson away from selling a $500 television to sell an $80 pager ... well, it isn't going to happen."While pagers are popular with businesses as a way to reach field personnel, they also have acquired a somewhat sinister image as a tool of teen-age drug dealers and gangs. Positive Communications's Bennett says the reputation is undeserved: "Pagers are probably the only affordable private telecommunications device a young person can get. To establish phone service, they must go through their parents, and cellular phone service requires a credit check. Paging can be established in their names, and it will cost $10-$12 per month, compared to at least $30 per month for a cellular phone."In recent years, Bennett's Pleasanton, Calif.-based company has been a leader in pushing the pager business into major chains such as Fretter, Best Products, Payless Drugs and Staples. Positive Communications offers these chains a variety of plexiglass P-O-P merchandisers including locked cases, counter displays and brochure holders. "We're more committed to elaborate P-O-P displays than anyone," Bennett explains. "In defense of most of the other [pager service] carriers, they tried to use the business-to-business displays that worked well when they were selling to IBM. But from the beginning, our displays were designed with the idea that we were going to sell to consumers who need to inspect the product before they buy."However, sometimes you have to give up a piece of the service action to get placement in big chains. Positive Communications devised an unusual P-O-P merchandising scheme to handle the ongoing service side of the business. "Younger people are 30 percent to 40 percent of the pager market," says Bob Pitzer, home electronics buyer for Fred Meyer Inc., a 125-unit department store chain based in Portland, Ore. "These kids have money -- look at their footwear -- but they don't have credit cards or checkbooks, all the things you need to pay a bill every month. To renew, they have to get money orders, and that's a hassle."The solution is a clamshell-packaged payment kit that a retailer can sell much like a prepaid phone card. Positive Communications is introducing two types of vouchers: One covers activation fees and the first-month's service charge, and the other handles monthly service payments. Customers purchase these vouchers with cash from the retailer, then dial a toll-free number and enter a secret code found in the kit. Their account is then credited.After carrying pagers for about a year, Pitzer says he pushed the voucher program forward: "What got me going was an interest in sharing a little of their wealth on the monthly service charges. I was asking for a residual from them for a chunk of the value that customers were paying them every month. They were hesitant on that -- I didn't really think I'd get it -- but then they came back with this idea."Security is an issue with both the vouchers and telecards. "These cards are cash on a peg," Pitzer says, "and I won't put them out in the open." Bennett says that as the program rolls out, Positive Communications is working closely with retailers on these concerns. "Right now, the voucher is designed to go on a normal hang-tag display behind the counter," he says. "We've also developed a basic counter card that explains the program. Once everything's in place, we'll probably go to more of a credit-card format that could go into a lockable case display."Bennett says linking service to the retail setting is a challenge "because it isn't a tangible. But when you consider the growth in wireless that's coming in the next 10 years," Bennett says, "this is the future."

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